Outside the Triple Crown and championship weekends, US racing struggles to stay relevant with a new generation of sportsbook-first punters who find pari-mutuel tote pools clunky and unappealing.
Stephen Bailey, Senior Racing Trader at Amelco, explores how US racing can modernise, where the roll-out of fixed-odds has stagnated and what the future of the sport could look like if it fails to modernize.
Outside of the Triple Crown and the Breeders’ Cup, US horse racing handle falls off a cliff. Why has the pari-mutuel tote model completely failed to connect with sportsbook punters?
It comes down to two fundamentals: simplicity and price certainty. Punters are conditioned to know their exact risk and return the second they place a bet. With pari-mutuel pool betting, dividends constantly fluctuate right up to – and often after – the off.
A casual bettor who backs a horse at 4/1 on the board, only to watch late pool adjustments crush their payout to 2/1 after the race, feels cheated. That price volatility is completely foreign and off-putting to a younger demographic raised on fixed-odds sports betting. If you want sportsbook-first customers to engage with racing, you have to give them the same contractual certainty they get on an NFL moneyline.
Fixed odds has been hailed as the saviour of US racing for five years, yet state-by-state rollout has crawled. What is actually holding US operators back from pulling the trigger?
It mirrors the legacy resistance we’ve seen in UK racing, where traditional mindsets and resistance to change holds things back.
Pari-mutuel operators in the US have historically operated behind legislative monopolies. There is a deep-seated fear that introducing fixed odds will cannibalise traditional tote pools and erode track revenue.
That mindset, however, fails to recognise that the modern sportsbook customer has already moved on. The betting landscape has evolved, and racing has to evolve with it.
Rollout has crawled because stakeholder alignment takes time, but state regulators and tracks will eventually have to confront reality. Holding onto a declining 20% takeout pool risks ruin compared to taking a piece of the high-volume, fixed-odds sportsbook action.
The primary excuse US sportsbooks give for avoiding fixed odds is the fear of being taken to the cleaners by Computer-Assisted Wagering (CAW) syndicates and sharp offshore money. Is that a real risk, or just an admission of lazy risk management?
The risk is real, but manageable with the right trading controls. CAW syndicates dominate tote pools precisely because they exploit pool mathematics in the final fractions of a second before the gates open. In a fixed-odds environment, the trading desk is in control.
With modern automated risk controls, operators can dynamically manage stakes, restrict smaller mid-week tracks to singles, apply targeted liability limits and profile accounts in real time.
If you have automated liabilities and pricing backed by experienced race traders, sharp money can help you shape a more accurate book. I believe with this, operators can offer fixed odds without exposing themselves unnecessarily to significant losses.
In your expert view, how can a sportsbook successfully price fixed odds alongside traditional pari-mutuel pools without cannibalising track revenue?
It’s certainly challenging, but I think the two pricing models need to complement each other. Any material difference between a fixed price and the tote pool creates an immediate arbitrage window for syndicates looking to exploit off-market value. The real opportunity for sportsbooks is developing their own independent pricing tissues—especially across the smaller, high-frequency evening cards.
To do that effectively, operators need better access to live streaming, sectional times and automated form analysis. When executed correctly, fixed odds won’t cannibalise the tote, it will be able to offer an entirely new recreational handle that pays commercial rights fees straight back to the tracks. It’s a win-win for all.
US racecards run fast and relentless across multiple time zones. How does Amelco’s automated racing engine price and trade US cards without needing a dozen manual traders on screens?
Automation is essential when dealing with the volume and frequency of US racing. However, trader input remains hugely important, whether monitoring live money, reacting to market movements or watching races for potential issues.
Our automation does the hard work – it’s only with that technical ability that you can keep up with dozens of meetings running simultaneously from the East Coast to California.
However, you can’t run racing on autopilot. Experienced traders are critical for monitoring liability spikes, reacting to changing track conditions and managing exposure on big-race runners. The tech does the mathematics you need; but it’s the trader that manages the macro risk.
Most US operators either banish racing to the back pages or ignore it completely. What happens to turnover when you put a fixed-odds racing product directly next to an NFL or NBA bet slip?
Like any product, racing will struggle if customers aren’t seeing it promoted. I think the opportunity is to make betting on racing quicker and simpler, with promotions such as boosted favourites and quick-fire doubles.
If you integrate fixed odds into the main sportsbook app – placing a boosted favourite, a quick-fire double, or a trending race directly on the main bet slip – recreational engagement changes overnight. Good product placement and straightforward betting opportunities could make a real difference to engagement and turnover.
If the US racing industry fails to modernise and embrace fixed-odds trading over the next three years, where does the sport end up commercially?
Something needs to change quickly, or racing risks becoming increasingly irrelevant to younger audiences. Countries such as Australia, Japan and Hong Kong show that pool betting can thrive, but there are lessons to learn from their approach to customer engagement.
We also need to recapture the wider public interest that events like the Grand National once generated. The industry needs to invest in the sport, modernise its offering and attract new audiences.
Fixed odds can be a big part of that, but it requires a much wider commitment to change. We can provide an operator with everything they need for fixed-odds racing in the US to become incredibly profitable, with double-digit GGR, but they’re going to need to handle the marketing.
