MY FIRST EXPERIENCE WITH MOBILE SPORTS BETTING

Legal sports betting is rapidly spreading across the United States.  Currently, 30 states have legalized sports betting and 18 allow online sports betting. 

Sports betting companies were aggressively advertising on the National Football League wildcard-game telecasts this past weekend.  Likewise, social media and email advertisements were prevalent.

I live in Ohio, which has recently legalized sports wagering but it won’t be up and running until sometime later in 2022.  So, until then, to make a legal bet, I must wager in a state where sports betting is operational.  Living close to both Pennsylvania and West Virginia, that is an easy drive.

To give a try to mobile wagering, I decided to open an account with the company I am most familiar with, TwinSpires (Pennsylvania), and place a bet on the Cincinnati Bengals vs. Las Vegas Raiders NFL contest.  An Ohio resident can open an account in Pennsylvania, but must be physically present in Pennsylvania to actually make a bet.

TwinSpires is offering a variety of promotions to entice people to open an account, promotions that are virtually identical to a host of other companies such as BetMGM, DraftKings, and FanDuel.  The sports-bet offer I selected was as follows:  Bet an amount up to $1,000 and if the bet fails, TwinSpires gives the bettor a credit of that exact amount to wager within seven days.

Assume a bettor wagers $1,000.   If the bettor wins, he or she collects $930, with a 7% takeout.  On the other hand, if the bettor loses, he or she has a week to place another bet using the $1,000 credit from TwinSpires.  The bettor can cash out the winnings on the second bet ($930) but not the $1,000 that TwinSpires provided. 

I attempted to make a bet from Ohio, but, as expected, could not because the TwinSpires app tracked my location.  Once I drove about 50 miles and crossed the Pennsylvania line, I stopped at a gas station and made the bet after the app ascertained that I was actually in Pennsylvania.

Driving to Pennsylvania or West Virginia will not be necessary later this year when Ohio joins the sports-betting states.  It will be as convenient as account wagering on horse racing. 

What effect sports betting, particularly via mobile, will have on pari-mutuel handle is to be seen.  A major concern is a relatively low takeout rate on sports betting that puts horse racing at a huge competitive disadvantage.  It may not matter to casual bettors, or to horse-racing aficionados, but it will to regular bettors of large amounts, who heretofore have had only account wagering to bet legally online.

Copyright © 2022 Horse Racing Business

DECISION TIME FOR OWNERS OF BAFFERT-TRAINED TRIPLE CROWN CONTENDERS

The recent Sham Stakes for 3-year-olds at Santa Anita racetrack was won by Newgrange with Rockefeller finishing second.  Both colts are trained by Bob Baffert and neither colt earned points to enter the 2022 Kentucky Derby. Mr. Baffert has been suspended by Churchill Downs from running horses at the track through the spring meet of 2023 and hence the track won’t allocate Kentucky Derby points to any horse trained by him. The track’s ban followed the Baffert-trained Medina Spirit testing positive for a prohibited medication after winning last year’s Derby.

In addition, the New York Racing Association may prevail in its ongoing legal effort to ban Mr. Baffert from its racetracks, thereby precluding his trainees from running in the Belmont and Travers Stakes.  If NYRA does prevail, and the Churchill Downs exclusion remains in place, Baffert-trained colts will be precluded from contesting two-thirds of the Triple Crown races, as well as the prestigious Travers in August 2022.

These possibilities pose a critical and an immediate decision for the owners of Baffert-trained 3-year-old colts with Triple Crown potential.  Do they remain loyal and keep their colts with the winningest Kentucky Derby trainer ever and arguably the most accomplished trainer of all time of horses on dirt surfaces?  Or do they send their colts to another trainer so they have certain unfettered access to the most coveted races for 3-year-olds in America?

Say an owner estimates there is a 10% chance that Baffert-trained horses will be able to run in the 2022 Kentucky Derby, either because Churchill Downs relents or there is some sort of legal intervention.  Further, the owner estimates there is a 20% chance that Baffert-trained horse will be able to compete in NYRA races due to a legal victory. 

With less than four months to the Kentucky Derby and five months until the Belmont Stakes, the owner is looking at overwhelming odds against his or her colt running in the two most esteemed American races.  Specifically, the owner’s estimated odds of being able to run in both the Kentucky Derby and the Belmont Stakes are 2 percent. 

A rational actor (or an algorithm) looking at the situation strictly from a probabilistic viewpoint (i.e., not considering any feelings of loyalty toward Mr. Baffert) would conclude that the correct course of action is to change trainers and do so before his/her colt runs in a race that grants Kentucky Derby qualification points.

Copyright © 2022 Horse Racing Business

PARALLEL UNIVERSES

Over the New Year’s weekend, I watched as television news carried worrisome stories about the COVID-19 Omicron variant spiking to record levels and causing overcrowded conditions at hospitals, exacerbated by absent Omicron-infected healthcare employees. In one report, a distraught medical doctor pleaded for people to get vaccinated, although he lamented for some it was too late. 

Television chronicled a plethora of scaled-back or cancelled New Year’s celebrations, most notably the annual Times Square gathering limited to 15,000, and thousands of airline passengers stranded by cancelled flights. Many college and professional sports leagues postponed games and placed players into quarantine. A couple of jockeys at Aqueduct racetrack were in isolation.

I also watched several televised college football bowl games, primarily the two national championship semifinal matchups on Friday, as well as a few National Football League contests on Sunday.  The stadiums were filled to capacity with ebullient and cheering fans sitting right next to one another, no masks and no social distancing.  A viewer watching only the games, would not know much, if anything, about the toll being wreaked by the surging pandemic.

The contrasting imagery was striking, as though there were parallel universes, one characterized by doom and gloom and the other carefree and full of life. The people in each universe seemed oblivious to what was transpiring in the other.

COVID-19 has altered daily life in a way almost everyone currently living has never experienced…and the near future remains uncertain. Will, for example, the virus abate by May so that horse racing’s Triple Crown events can commence in front of normal large crowds?  An expert from the Baylor University medical school predicts that the Omicron variant will crest and then subside after it has finished traveling across the United States in a month or so.

Let’s trust he is right…and that 2022 will truly be a Happy New Year!

Copyright © 2022 Horse Racing Business