The dust has settled from the 140th Kentucky Derby. California Chrome celebrated in the winner’s circle on Saturday. Bettors that picked California Chrome to win took home $2.50 for every $1 bet. Many other wagers were placed on the annual betting tradition.
Churchill Downs held a large portion of the action. Win, place and show bets saw a 17.5 percent hold. Exotics had 22% taken from the prize pool. This was up from 16 percent and 19 percent in 2013, respectively.
Churchill Downs booked $186.6 million in bets on Saturday across the entire race card. Winning bettors took home $147.8 million. That is a hold of 20.8 percent.
Some reports draw publicity to the fact that the Kentucky Derby handle is larger than the amount Nevada sports books draw for the Super Bowl. Nevada sports books wrote $119 million in tickets for this year’s Super Bowl. The number is probably only about one percent of the total amount actually wagered on the game. The rest was wagered at online sports books or local bookies. The Kentucky Derby has a much wider reach through legal off-track betting facilities and regulated online sites. In other words, that comparison is apples and oranges.
One comparison that is valid is the hold on sports betting in Nevada. Straight bets have a juice of 4.5 percent. Exotics have a juice in the 15 percent range, depending on the wager. This is much lower than that of horse racing.
Churchill Downs does not get to keep all of the hold. It has a massive overhead. The venue has a large staff to pay for, as well as the grounds to keep. Kentucky takes 1.5-3.5 percent of the total handle for taxes. The horsemen’s purse also comes out of the hold.
Regardless, it was a big day for Churchill Downs and Kentucky and congratulations to them, but it brings up another point. Why is horse racing so acceptable, but sports betting so wrong?
The Professional and Amateur Sports Protection Act was enacted in 1992. It is being challenged by New Jersey. The state has already spent $2.8 million defending its right to offer sports betting. The U.S. Supreme Court is its last chance, otherwise, it will take an act from Congress to repeal the federal sports betting ban that only allows straight sports betting in Nevada and limited betting in Delaware, Montana and Oregon.
A New Jersey Supreme Court victory would also be a win for its struggling horse racing industry. Racetracks would be allowed to accept sports bets. Presumably, this would happen in other states that would legalize it in the future. Race books are already equipped with wagering equipment, handicappers and spectator seating. These establishments are also known and frequented by local bettors. This makes race books a perfect fit for legalized sports betting.
It is ignorant to think that sports betting is not a major contributor to ratings and the popularity of sports. For some reason, the sports leagues like to ignore this fact.
Las Vegas was the number three market for Monday Night Football and number five market for Sunday Night Football in 2013. There is only one explanation for that.
Another example of sports betting helping ratings is the Week 14 Thursday Night Football game on NFL Network. The Houston Texans (2-10) played at the Jacksonville Jaguars (3-9). This game should have been of no interest to anyone, even local fans. The game was officially a sellout, but there were 7,000 empty seats. That does not include the more than 9,000 seats the Jaguars do not even bother to sell and instead cover with tarp.
This game, arguably the worst primetime matchup in years, drew 4,633,000 viewers on a cable network that is only available in about two-thirds of all households.
The argument can be made that a day at the racetrack is a tradition. The Kentucky Derby has its glamor and it can cost hundreds or even thousands of dollars to see the event in person. That argument cannot be made for online horse racing. This is legal through sites like TVG and Twinspires in more than half of states.
There is no tradition of betting on horse racing over the Internet. It is strictly a gambling activity from the comfort of one’s home. Online gambling opponents have given this activity an exemption in all forms of regulation, mostly due to the Horseracing Act of 1978, which protects the industry.
Online poker players would like this same exemption. Poker is just as much of a tradition and like horse racing, where parimutuel pools are created, the outcome of a hand is of no interest to the house. Unfortunately, online poker runs into opposition from conservatives that seem to see horse racing differently.
It is hypocritical to say online horse racing, or even land-based horse racing, is acceptable, while sports betting and online poker are not. This is not to say that horse racing should be restricted in any way, it is a call for equality to make all betting fully regulated and legal. This is the only way to put an end to the black market and allow for the safety of industries that will exist regardless of the legal environment.