Is pari-mutuel betting becoming a bit obsolete?
by John Berry
Betting on the outcome of a horse race has been around for thousands of years with proof going back as many as 5,000 years, with dice found in an Egyptian tomb.
There was betting at the Olympic Games around 2,500-3,000 years ago in Ancient Greece and was conducted in Ancient Rome spreading into China and the Middle East.
The “modern” era of betting was in the 17th and 18th centuries with England’s Newmarket becoming the center of English racing.
This was an era where bookmakers first appeared offering fixed odds, instead of simple matched wagers.
As racing exploded in popularity in the 19th century, the racing scene was dominated with match races pitting one steed against another and tracks — some, eventually becoming iconic — emerging, some examples being Saratoga, Belmont, Pimlico, and Churchill Downs.
During the 1860s, Frenchman Joseph Oller invented pari-mutuel betting, which began to take the place of bookmakers.
Pari-mutuel betting was introduced in the United States in the 1870s — Jerome Park in 1871 and Churchill Downs in 1878 — but it took some 40 years when the totalizator came into play.
Actually, after legalization in Kentucky, the 1908 Kentucky Derby used machines, in essence to save the sport from scandal.
In 1913, George Julius, an engineer from Australia, invented the tote system, which, of course, automated the calculations, which were, initially, used in New Zealand.
In 1927, the tote system came to Arlington Park and, from there, expanded.
That system insured reliable calculated payoffs to winners, as well as tax revenue for the many states that offer pari-mutuel racing.
But times have changed, and many of our BDHC (Broken Down Horseplayers Club) members have noticed it and are complaining about things, compared to when the tracks were packed with fans with only win, place, show, and a daily double to kick things off with the occasional quinella and exacta mixed in the betting menu.
Longtime player Smitty, a longtime retired school principal from the Midwest, offered his assessment saying, “The win pools were healthy back then and a bet of, even, $50 or $100 would hardly budge the [odds] board at Roosevelt, Yonkers, and Hollywood Park; Chicago, too.
“Today, I hear about times when a horse is 15-1 a minute from post time and the last [odds] flash after the bell [the start of the race], it’s 6-1.
“The [win] pools at most other tracks have become so weak that any sizable bet can destroy the odds.”
Smitty has a point, but there’s another side of this coin.
It is true that there are only a handful of tracks left that have enough of a win pool to support any sizable wager — The Meadowlands, Woodbine Mohawk Park, and Indiana’s Hoosier Park among them — but, as Chi-town Phil retorted back, “Whenever a horse goes from [odds of] 15 to 6 on the board, the other horses’ odds tend to go up, so it all depends on which side of the fence you are on; someone always wins.
“I made a bet — just $10, so, not a big one — and when one horse got ‘hit’ in the final flash, mine went up from 9-2 to 5-1, so it actually helped me because my horse won.”
BDHC member Slats said, “Everybody is looking for the big score and the tris [trifectas] and supers [superfectas] provide the chance to do that.
“It’s like a lottery at the track and guaranteed pools feed that chance to chase them.”
But Freddie Haazaa said the exotics have “stretched the other pools way too thin and that’s why the value on the normal win pools have become so weak.
“The tracks want you to chase these because the payoffs can become headlines, while a $4.20 win ticket doesn’t get anything.”
But longtime BDHC member Luke said that anytime an exotic wager comes into play, the “churn money lost is substantial.”
An example of this would be if there is a pentafecta with a guaranteed pool of, say, $20,000 and the takeout is reduced to 12 per cent or 15 per cent and the wagering covers the guarantee, the number of winners will, of course, be low sharing that $17,000 net pool and that is $17,000 of churn coming off the following races.
Yes, the few winner’s may bet a bit more — and maybe take their new found fortunes and run like bandits — but the simple win bets keep the money flowing much further.
But Adolph A. retorts, “You can’t blame it all on the multi-horse races.
“Heck, if a 15-1 shot wins in a race, a lot of that money going to a $32 winner takes churn money away, too.
“It won’t affect as many bettors, but chalk keeps people alive in this game.”
Adolph had valid points, so there has to be a better solution.
Stan The Pinochle Man thinks that solution is in fixed odds.
“I think that’s where we might be headed,” he said, “or should be!”
Fixed odds betting is a situation where the odds are locked in at the time of the wager, which ensures the potential payoff of the winner.
It has become common in sports betting these days and the winning bettor is paid based on the time of the wager — regardless of late fluctuations.
Just as there are lines or odds set when the betting opens, those odds are also adjusted — sometimes in a few seconds — but those that have captured the opening odds are protected from those changes.
Stan brought us back in time remembering, “At Sportsman’s Park, they had betting windows with lines that were long, especially for the $2 bettor and it took the teller several seconds to make a trifecta ticket when they were first available way back in the [19]70s.
“But there were always a few books [bookies] in the stands and they’d give us fixed odds.
“So, we’d get something in at 5-1 — locked in — and we still had the option of making another bet if we wanted, sometimes at higher odds and sometimes at adjusted lower odds but we were locked in on all of them.
“I usually bet $20 so, if I was in [guaranteed] at 6-1 and the winner paid, say, $14.60, he’d give me the $140 and keep the $6 for booking the bet.
“If I lost, he had the $20 in his pocket.”
Billy The Drummer chimed in with his thoughts on the smaller tracks benefiting from fixed odds saying, “Being from the great State of Kentucky, we have some of the best racing in the country and a lot of great horses come here. In fact, there are times that the purses are much more than the betting.
“I am one guy that has seen a bet of, even, $20 knock a horse’s odds down from 5-1 to 8-5 in the last flash.
“Of course, my bet wasn’t the only one, but along with others, it would knock the hell out of the price.
“To lock in a price early off, maybe, a big morning line, would be great for us bettors, especially at the smaller handle places.”
Since I was a morning-line odds maker and author on the subject matter, professional morning-line odds makers would create accurate morning lines for every track with these lines available for betting when the action begins.
They would, then, as time goes, adjust those up or down until the bell, when the betting would end, with everyone locked in as frequently as necessary as betting progresses — the same way that the odds change in sports betting or any type of betting, whether it be politics or economic issues on which the public can wager today, i.e., picking a winner, point spreads, or futures.
So, instead of the pool volume, fixed odds would be accepted and become set-in-stone permanent once the bet is made.
With the technology available today, fixed odds could be available with the bettor’s option to make additional wagers before the bell on their phones or computers, knowing it will not change the odds on earlier bets.
None of this would even have to go through the track reducing their costs and they would get a cut of the pie as the host track, but to those who find change difficult to accept, tracks and simulcast outlets would still be available.
As Marsh The Barber said, “Since most tracks now rely on political help and casinos to fund the sport, they haven’t given a damn about us players.
“I’m not so sure that racing has any real long-term future, especially when the trend seems to be letting casinos get out of their deals with tracks [decoupling] and states that support racing with funding always seem to have more important things to worry about to put racing in a bind.
“But the possibilities are endless, especially in today’s AI world and we see it in just about everything in our world today, so I am hoping racing will hop on board to bring it up to our times.”
So, in conclusion, simplifying a bit, pari-mutuel betting is against other bettors while fixed betting is against the house.
In this day and age, probably less than 10 per cent of wagers are made on track at the host facility while the vast majority is done through simulcasting venues, advance depositing apps on telephones, and a few OTB outlets.
The availability of fixed odds wagering could, very well, give wagering the vaccination it needs to bring itself into the modern age of racing, if there is such a thing.
May The Horse Be With You!
