King:DRF

Posted May 3, 2015

Oaklawn Takes Aim At Robotic Wagering In Horse Racing

LITTLE ROCK — Sold on a horse that is 3-1 loading into the starting gate, a bettor wagers $2 to win, knowing the minimum payout is $8.

The handicapping is right on, but the winning mutuel is $5.20, the profit dramatically reduced by a far-away computer. A wad of money is required to drop the odds from 3-1 to 8-5 in the final click of the tote board, but it happens because high-volume players, including syndicates, establish computer-robotic wagering (CRW) that use algorithms to set up wagering programs. The idea is to take advantage of last-second odds anomalies by placing large wagers in a fraction of a second.

At Oaklawn Park, CRWs are on a hit list.

“We simply refuse to allow them into our pools,” Bobby Geiger, Oaklawn’s director of wagering and simulcast, said in an Email. He said Oaklawn realized more than 10 years ago that “these parasites would kill the grandstand player and ultimately the wagering component of the sport, so we eliminated them from our distribution

portfolio. “They’ve tried to sneak into our pools on multiple occasions … but we constantly monitor our pools for the activity,” he said. “WE ALWAYS CATCH THEM. The practice is so egregious and unfair to the other patrons in the pools that is impossible to disguise.”

Oaklawn’s approach to the CRWs is one of the issues that Mark Lamberth will mention as he visits racing jurisdictions throughout the country in his new role as chairman of the Association of Racing Commissioners International. A highway contractor from Batesville and a member of the Arkansas Racing Commission, Lamberth also will present the case that non-racing Advance Deposit Wagering sites are short-changing horsemen and racetracks.

Oaklawn’s handle for its recent 52 days of racing underlines the significance of off-track wagering. This year, Oaklawn averaged $3.35 million per day, including more than $2.6 million per day off track.

When a track sends its signal to another track, purse money gets a bump at both tracks. When that same signal goes to a non-racing ADW, that site pays for the signal but does not contribute to purses. As a result, horsemen suffer. In addition, the ADW is able to offer a rebate to customers — in effect, a discount to the bettor.

“This discourages wagering and attendance at the track,” Lamberth said. He will try to convince racing jurisdictions to mandate that ADWs contribute more money to purses.

“If the online ADW did not fund purses somewhere, they would not receive the signal,” Lamberth said. “Vegas is trickier since their patrons are on site and not on line and I’m not sure the track would choose to lose such a large handle. But with that being said, I think purses should be supported by everyone that uses the product, including those that wield a big stick.”

Unlike many other sports, there is no central authority in thoroughbred racing, and each racing jurisdiction acts independently so Lamberth must sell his recommendations from state to state.

Unquestionably on point are Lamberth’s conclusions that less racing is more and that America cannot support year-round racing.

The number of foals each year has finally stabilized at about 22,000, down from a high of 50,000 less than 30 years ago, but fewer foals means smaller fields and less wagering. A small-time exacta player, a six-horse field is of little interest. Oaklawn, Keeneland, Del Mar, and Saratoga are successful with limited days because they put a quality product on the racetrack.

“Most tracks are suffering from a shortage of horses (not Oaklawn),” Lamberth said. “Fewer racing days would mean less overlapping and conflicts. Fewer race days would mean bigger fields and opportunities for more exotic wagers for the big score.

“Racing once again could be a profitable endeavor as opposed to a broken and unsustainable business model in which gaming is subsidizing unprofitable racing,” he said. Lamberth makes good sense. Hopefully, racing jurisdictions are open-minded.