While unseasonably warm temperatures throughout the Jersey Shore dominated the headlines at this year’s Haskell Invitational, Johnny Avello had the comfort of air conditioning inside his office to rollout an intriguing horse racing product at DraftKings.
Avello, a veteran sportsbook manager with more than four decades of experience in thoroughbred racing, intended to use New Jersey’s signature event as a springboard for DraftKings’ fixed odds platform. With the safety of the thoroughbreds in mind, Monmouth Park officials delayed the race card for more than four hours pushing the start of the Grade 1 $1 million TVG.com Haskell Invitational into prime time.
Icymi, here are the heat-related – and public pressure-related -changes to the Haskell Day card at Monmouth Park. Last listed race is the $1M Haskell Invitational: pic.twitter.com/vYkHOeh5T0
— John Brennan (@BergenBrennan) July 20, 2019
At DraftKings, Avello still accepted fixed odds wagering on five races during the July 20 slate. Despite the lengthy delay, Avello was still encouraged by a solid handle for DraftKings’ initial foray into horse racing. For the Haskell, DraftKings offered fixed odds for win bets, as well as head-to-head wagers between individual horses.
“I was pleased with the overall handle and the handle on both the matchups and the fixed odds side,” said Avello, DraftKings’ director of sportsbook operations. “We wanted to offer our customers racing which we hadn’t before, so I would call it a success for the first time doing it.”
The results may augur well for the future of fixed odds wagering across legal U.S. markets.
What is fixed odds wagering?
A staple of European racing for decades, fixed odds wagering gives bettors the opportunity to lock into a price long before post time. Unlike pari-mutuel wagering, where the odds on a number of horses can fluctuate wildly, a fixed odds system allows a bettor to ascertain his expected payout as soon as the wager is made. Entering last Saturday’s King George VI & Queen Elizabeth Stakes at Ascot, defending Breeders Cup Turf champion Enable headlined the field at odds of 8/13. Crystal Ocean, Enable’s chief rival, opened as the 4/1 second choice.
Had the race taken place on American soil under a pari-mutuel format, the odds on both horses could have fallen considerably from the morning line price. For classic races in the U.S., a last-second, six-figure wager can cause a horse’s odds to fall sharply. One of the more famous cases took place at the 2014 Kentucky Derby when a large bet on Candy Boy sent his odds plummeting from 16/1 to 9/1 as the horses loaded into the gate.
“That’s a substantial drop with so much money in the pool,” Avello said. “There are Europeans that do it only that way, where the money doesn’t go into a pool. It’s an advantage to a really sharp bettor, a guy who thinks he is getting 3/1 when the horse should really be more like 8/5.”
Interestingly, enough, the fixed odds set by Avello before the Haskell wound up being nearly identical to the post-time prices for several entrants. Maximum Security, who outdueled Mucho Gusto for a 1 1/4 length victory, paid $3.60 at the track on a $2 win bet. The 4/5 odds on the Haskell winner were similar to DraftKings’ fixed odds on Maximum Security (even) prior to the race. Mucho Gusto and King For A Day, the race’s second-choice, also went off at prices close to their initial odds.
The disparity was more stark in the Grade 3 Molly Pitcher, a $150,000 stakes race for fillies-and-mares three years old and up. Midnight Bisou, a potential favorite for the Breeders Cup Distaff, cruised to an easy one-length win over Coach Rocks. Avello opened Midnight Bisou at 2/5, considerably above her eventual payout of $2.10 to win.
“There was some value there for the customers,” Avello said.
Moving forward, DraftKings could accept fixed odd bets next on Aug. 3 for The Hambletonian Stakes, a major harness race at The Meadowlands. Although it is not DraftKings’ ultimate goal to offer fixed odds for daily racing, Avello indicated that it is a preferable option for now until the company receives regulatory approval for a pari-mutuel license.
Favorable takeout for bettors
For ardent horseplayers, another advantage in fixed odds betting lies in its favorable takeout in comparison with common win bets. On Haskell Day DraftKings had a takeout of around 12 to 13% for win bets, Avello said, far below the takeout of around 17% at Monmouth.
DraftKings also offered matchup wagers, where bettors could predict whether Maximum Security would cross the wire ahead of rivals such as Mucho Gusto and King For A Day. Avello set a 27 cent spread for most matchups, which translates to a 5.5 to 6% hold for the sportsbook. In such a case, DraftKings installed Maximum Security as a -137 favorite over the underdog, Mucho Gusto, at odds of +110.
More than almost any oddsmaker in the nation, Avello knows of the excitement that a head-to-head wager can bring. While employed at Bally’s Race and Sports Book in the late 1980s, Avello designed a prop bet for the 1989 Preakness Stakes between rivals Sunday Silence and Easy Goer. A thrilling stretch duel ensued, as Sunday Silence prevailed in a photo finish. Avello believes the bet is the first of its kind from a legal U.S. sportsbook for horse racing.
The Betfair Exchange
Currently offered in New Jersey, The Betfair Exchange is the only legal exchange for horse racing in North America. In effect, the exchange matches buyers and sellers of Win, Place and Show tickets just as Ebay does for bobbleheads and DVDs. Minutes before the Grade 2 Bowling Green on July 27 at Saratoga, the exchange posted odds of 3.35-to-1 on favorite Channel Maker. Alternatively, bettors had the option of wagering against Channel Maker on the exchange. At the track, meanwhile, Channel Maker went off at post-time odds of 5/2.
The exchange also allows bettors to place in-play wagers on select horses during a race. When Arrogate stumbled out of the gate at the 2017 Dubai World Cup, his odds immediately rose from 2/5 to 4/5. By the time Arrogate fell to the back of the 14-horse field, the exchange listed him at 2/1 on the in-play market. As Arrogate rallied from the back of the pack, though, the in-play odds reflected his closing move. By the time Arrogate overtook Gun Runner in the deep stretch, the odds moved from 1/5 to 1/25.
“I don’t think bettors know how fun of an experience it is to bet in the middle of a race,” said Bill Knauf, vice president of business operations at Monmouth Park.
Monmouth Park felt the exchange would be a strong fit in New Jersey due to its popularity in Europe, Knauf added. New Jersey residents can also bet on limited races in several other states through the exchange.
“We feel it can work in conjunction with pari-mutuel wagering,” Knauf said.
Many bettors flocked to the Monmouth Park Sports Book by William Hill during the delay on Haskell Day. There, patrons had the option of placing cross-sport bets that featured action on both horse racing and baseball contests on the daily calendar.
In July 2018, Paddy Power Betfair formed a new entity named FanDuel Group following the completion of its previously announced merger with FanDuel. Paddy Power Betfair is also the parent company of The TVG Network.
Earlier this month, the Breeders Cup announced a multi-year partnership designating FanDuel and TVG as official wagering partners of the Breeders’ Cup World Championships. FanDuel, which is in the process of developing DFS applications for horse racing, plans to promote the Breeders Cup to its database of DFS players across the U.S.. according to a joint press release.
“This is a great opportunity to bring horse racing and the Breeders’ Cup front and center to our sports betting and daily fantasy customers and to introduce horse racing’s championship event to the next generation of racing fans,” said Kip Levin, CEO of TVG and COO of FanDuel.
BREAKING NEWS: We're proud to announce that @TVG & @FanDuel have been named official wagering partners of Breeders' Cup World Championships! Multi-year agreement includes title sponsorship of the Breeders' Cup Juvenile and Mile! More Details here: https://t.co/pLGCnGYY28 #BC19
— Breeders' Cup (@BreedersCup) July 17, 2019