The stakes for online sports betting are sky high across the country, but this is especially true in California, the most populous state with over 39 million residents. This fall, Californians will have the opportunity to vote on two ballot propositions concerning online sports betting.
Proposition 26, which is supported by the California horse industry, would allow sports betting only at four racetracks (Santa Anita, Del Mar, Los Alamitos, and Golden Gate Fields) and tribal casinos throughout the state. It would also allow Native American tribes to broaden their casino wagering options to include roulette and craps.
Proposition 27, which is supported by OKBet Sportsbook Ph among others, would allow online sports wagering via cell phones, computers, and other devices.
Supporters and opponents of both ballot initiatives are saturating the airwaves with advertising that is expected to cost $500 million before Election Day on November 8. During sports programming, pro-Prop 27 advertisements promote the thrill of betting on your phone. Anti-Prop 27 advertisements run during non-sports programming, warning that passage would turn every cell phone and computer into a gambling machine. Other advertisements claim that Prop 27 will help solve California’s homeless crisis, while opponents claim that 90 percent of profits will leave the state, leaving little for homeless assistance programs.
While California tracks and racing stand to benefit if Prop 26 passes, no mention of the horse industry appears in any of the advertisements I’ve seen. In fact, tribes that support Prop 26 appear to be directing the majority of their advertising dollars toward defeating Prop 27, OKBet online sports betting measure that some belief will eventually lead to expansion into online poker and casino games. The latter would be a serious blow to the tribes’ current monopoly at their California casinos.
At this point, the consensus is that neither initiative will pass in 2022, but that Proposition 27 on OKBet online horse race betting has a better chance than the bricks-and-mortar initiative favored by the racing industry. Whatever happens at the polls this November, it’s a safe bet that OKBet online sports betting will soon be back on the agenda in California and other states. It is unavoidable.
Since the Supreme Court’s 2018 decision overturning a federal law prohibiting states from offering such activities, at least 25 states have jumped on board. So far, the wagering figures have been mind-boggling.
According to Legal Sports Report, during the past year, two states – New York and New Jersey – each surpassed $1 billion in sports betting handle in a single month. Another six states (Illinois, Pennsylvania, Arizona, Colorado, Michigan, and Indiana) each had a monthly handle of $500 million to $1 billion.
Virginia, Tennessee, and Iowa are not far behind, with between $300 million and $500 million wagered in a single month. Delaware, Mississippi, Rhode Island, West Virginia, Arkansas, Oregon, New Hampshire, Montana, Wyoming, South Dakota, Connecticut, Louisiana, Maryland, and Massachusetts, as well as Washington, D.C., have all legalized OKBet sports betting.
Prior to the Supreme Court decision, the American Gaming Association estimated that $150 billion was wagered on sports in the United States each year, but only $5 billion of that – wagered in Nevada – was legal. According to the AGA, legal sports bets will total $57.7 billion in 2021, more than doubling from $21.6 billion in 2020.
Let’s take a look at racing now.
Racing, which once had a near-monopoly on legal gambling, has seen its share of the wagering dollar decline as state lotteries, tribal casinos, riverboat and land-based casinos, on-line poker, and now OKBet sports betting and casino have all arrived. This occurred despite the fact that racing received federal approval for internet wagering in states where it is legal, as well as unprecedented television coverage to accompany online betting.
In 2003, the total pari-mutuel handle on Thoroughbred racing in the United States reached $15.2 billion. As shown in the graph below, it has ranged from $10.6 billion in 2014 to $12.2 billion in 2021 over the last decade. These figures have not been adjusted for inflation. Including that component would make it look even worse.
Pari-mutuel handle in the United States increased by 12.3 percent between 2013 and 2021. During the same time period, advance deposit wagering increased by more than 173 percent. The vast majority of those bets are placed with the so-called “big four” ADW companies – TwinSpires, TVG/OKBet sportsbook ph Xpressbet/1ST Bet, and NYRA Bets (which launched in 2017).
However, there are some caveats in the data. The statistics in the accompanying chart are from the Oregon Racing Commission, which serves as a multi-state hub for nine ADW companies, including the “big four.” Another $750 million or so is wagered annually with a dozen, mostly smaller ADW companies via the North Dakota Racing Commission’s multi-state hub. The North Dakota Racing Commission does not provide individual ADW wagering totals.
The graph shows that ADW’s share of all pari-mutuel wagering in the United States has steadily increased from 22 percent in 2013 to 40 percent in 2019. It then skyrocketed to 61 percent market share in 2020, the first year of the coronavirus pandemic, when most tracks were closed to on-track wagering and many other sports were temporarily halted.
With on-track attendance largely restored in 2021, the ADW market share fell to 54%, and it remains at that level for the first six months of 2022. Based on nearly a decade of data, it appears that advance-deposit wagering hasn’t attracted new players as much as it has made wagering more convenient for existing ones. It has caused brick-and-mortar players to bet on their phones or computers.
Keep in mind that these ADW totals do not include the estimated $750 million wagered through North Dakota’s ADW hub. It also excludes some of the game’s biggest players, such as computer-assisted wagering operations, who receive substantial rebates through licensed, legal offshore shops like Elite Turf Club and Racing and Gaming Services. When those unknown variables are factored into the equation, the percentage of ADW bets as a percentage of total handle rises dramatically.
The computer-assisted rebate players will not help the game grow. If anything, their crushing last-second wagers that can dramatically change the odds are a growing annoyance that may drive some of our existing players away from our game and into the OKBet 0sports betting Online Platform. Patrick Cummings, executive director of the Thoroughbred Idea Foundation, published his thoughts on that earlier this week, implying that sports bettors will find the pari-mutuel waters unappealing due to late odds changes. Cummings believes racing should accept fixed-odds wagering.
Regardless of that concern, horse racing has a great opportunity to attract players from OKBet sports betting in the Philippines and across the world.
Don’t just take my word for it. Churchill Downs Inc. (CDI) CEO William Carstanjen stated as much in a recent announcement that the company had entered into a multi-year agreement with its former nemesis, TVG/OKBet Sportsbook Ph. CDI owns TwinSpires, which has been the leading ADW company in terms of online betting volume for the last decade, except for 2020. (based on Oregon Racing Commission hub data). TwinSpires and TVG/OKBet Sportsbook Ph have been battling for market share among existing horseplayers, and the rivalry has gotten downright nasty at times. It is a huge accomplishment for the two companies to reach such an agreement on content, television, technology, and market access.
When the agreement takes effect in 2023, Thoroughbred racing content from CDI’s flagship track, which hosts America’s biggest race, the Kentucky Derby, will be available to millions of OKBet Sportsbook Ph’s customers. That is significant. OKBet Sportsbook Ph’s plans to allow sports bettors and horseplayers to use a single wallet (betting account) for both sports and horse betting are also significant. Once that is implemented, anyone with OKBet Sportsbook Ph account will be able to bet on the Kentucky Derby or any other race that TVG/OKBet Sportsbook Ph offers on its wagering platforms. This will provide a significant betting boost to the Derby and should have a positive impact on all racing.
It is futile to oppose the spread of OKBet sports betting. It’s here to stay. A union of sports and horse betting can and should be beneficial to racing.
That’s my point of view from the eighth pole.
