Is pari-mutuel wagering about to become obsolete?

When. I started writing about harness racing 50 years ago, my trusty typewriter I thought, would be my lifelong partner.

Fast forward 20 years and my trusty Xerox telecopier would transmit my stories to Hoof Beats Magazine at the incredible rate of four minutes per page.

And what about my rotary dial landline phone?…and pay phones? (Which were “cut off during the races!)

VCRs…dictionaries…encyclopedias…alarm clocks…1,000 more…10,000 more…maybe 100,000 more relatively new inventions ALL OBSOLETE.

Rarely has any invention since 1900—or, for that matter, 1990—able to last until now.

Even the newest compact discs—CDs—are obsolete…and my records, including cylinder, 78’s, 33 1/3s and rare acetate’s…well, as my New Yawk friends say, “fuhgeddabout it.”

In looking at the racing results of the past few days, now I am beginning to wonder if one of the oldest inventions—and one of racing’s most important—is on the verge of becoming obsolete, as well.

Pari-mutuel wagering goes back to 1867 when Frenchman Joseph Oller invented the pari-mutuel form of wagering.

Of course, there was an enormous amount of calculation involved on this system and it took   almost a half century before a special machine calculating odds would come intro play with the invention of the “totalisator”—yes, there was an “s” in the name, not a “z—by Australian gent George Alfred Julius.

The first one was placed in Auckland, New Zealand at the Ellerslie Racecourse in 1913 before it began to become a staple in the wagering industry all over the world.

It did take another 14 years or so before pari-mutuel wagering was introduced in the United States with the first system installed at Arlington Park near Chicago in 1927, followed by Sportsman’s Park, also near Chicago, in 1932.

At many venues, “bookies” were at their stands taking bets at the tracks, when pari-mutuel betting was introduced, many of the “bookies” were put out of business with only the “underground ones” remaining and taking bets.

The bookmakers, by the way, could offer better payoffs because their “take” was smaller.

Of course, pari-mutuel betting—the “pari-mutuel” meaning betting among us—has been a staple at tracks throughout North America since and has had no interference—even with the lottery, casinos, sports betting, prop betting and whatever other type of betting exists as competition.

So, just as the illegal “numbers racket” was thriving in earlier times throughout the land, it, all of a sudden, became legal and turned into the lottery for the States to make a killing!

That’s how “poly-ticks.”

That probably was the first sign of trouble for our industry with pari-mutuel dollars being siphoned away from the pari-mutuels and in the direction of the lottery, which offered much bigger prizes.

Then came the casinos and, after that, sports betting and then, prop betting…

What’s next?

So, here we have one of the longest living inventions that is still around, much longer than the average life span for us human beings…and much, much longer than just about every other invention that has crept into our world over the past century-and-a-half.

And the question is…Is the pari-mutuel form of wagering in danger of becoming obsolete?

I am beginning to wonder.

After all, virtually all of the powerhouse pari-mutuel harness tracks are history—you know, the ones that had regular nightly handles of $1,000,000, or close to it.

The Meadowlands is, of course, the KING here in the U.S.A. with Woodbine enjoying that lofty crown north of our border.

Yes, you may find a track or two that will have a special event where that magic million-dollar number is achieved…but those nights are few and far between—sadly.

In looking at some recent results from some of our great racing establishments, it’s scary to see purses offered much higher than normal pari-mutuel handle could allow.

There is evidence that some track’s purses are five to 10 times what wagering handle would dictate…thanks to the casinos pouring their contracted funds to help out and legislatures allocating the necessary funding to keep the industry alive.

There may even be a track or two that pays daily purses as much—or close to—the day’s total pari-mutuel handle.

Talk about an industry walking on rickety stilts…

Yet another “new invention” in today’s world, are the many internet gam(bl)ing shops and offshore operations that offer “rebates” (some very lucrative) as they have a minimal amount of overhead.

So, here’s the deal.

Many seasoned, long-time members of the BDHC (Broken Down Horseplayers Club) are complaining that betting “value” has diminished over the years…not at the aforementioned Meadowlands or Woodbine, but at most of the smaller venues

When a single $50 bet or, even, a $20 bet can drop a horse from 9:2 to 5:2, that $20 bet takes $40 of profit off the table for the bettor.

Part of the problem is the exotic wagers offered in today’s world.

Years ago, in harness racing’s robust days, WIN pools were strong and only began to be affected as more difficult exotic wagers, offering higher payoffs, came into play.

Instead of the betting pie with three slices offering win, place and show wagering—maybe one can say four pieces with the daily double—in today’s world, that pie now has, let’s see, w, p, s, dd, ex, try, super, pick-3, pick-4, pick 5, pick 6 and some others—and is sliced into as many as a DOZEN much smaller pieces with win pools suffering major defections as bettors chase the bigger prize at the end of the pari-mutuel rainbow.

It’s no different than the slot floor of the casino where there are so many options with huge jackpots awaiting if one can hit the button and the “RNG” (random number generator) lands on the one of millions and millions of numbers.

The U.S. and Canada aren’t in this mess alone.

Australia and New Zealand have a slew of exotic wagers—some on a single race and some on multiple races.

From the “each-way” and “duet” offerings to the “treble” and “quadrella,” we aren’t alone.

The United Kingdom, Ireland, Sweden, Hong Kong, Japan, France—all have exotic wagering dominating their pari-mutuel racing.

And let’s not forget that, in any race employing an “exotic” wager, more “churn money” is taken off the table as the number of winners on these races can be very few, which takes a vast majority of BDHC members out of the ballgame.

Remember, if there’s, say, a $25,000 (20 cent) superfecta pool with a net pool of $18,750, if the per-capita per ticket is even as low as $10, there, theoretically, would be 125,000 ticket combinations out.

If, say, four lucky punters win and each gets $4,687.50, the churn money lost is $24,999.20…less whatever those winners are willing to bet during the remaining races!

Yes, maybe the time has come for the implementation of FIXED ODDS BETTING, which works like the sports betting that has infiltrated our world in recent months.

In this case, a sports book or track would post the odds and the winners would get paid if they win.

The beautiful thing about fixed-odds wagering is that a $20 bet…or a $50 bet…their fixed odds are locked in and immune to the pari-mutuel form of betting which can result in a horse going from 9 to 2 all the way down to, say, 2 to 1 in the next 45 second change of the tote-board.

Of course, oddsmakers can shift fixed odds but the bettors know what they will get if they win—even if another wager late of $5,000 or more is made.

In simple terms, pari-mutuel betting against the other bettors while fixed-odd betting is against the “house.”

There are a couple of States in the U.S. that offer legal fixed odds betting—either through an online sports book app or website.

Anyone want to put a legitimate “shot” into racing?

Maybe fixed-odds racing would do just that!

May The Horse Be With You!

by John Berry, for Harnesslink