(By Richard Eng, America’s Best Racing). My column from New Year’s Day drew so much reaction I thought I would follow up on it. If you did not read it, I compared the mentality of a sports bettor with that of a horseplayer. A sports bettor is happy to bet into 11 to 10 odds. Meanwhile most self-respecting horseplayers will almost never make a straight bet on the favorite.
Many commented that I was comparing apples to oranges. That sports bettors are playing a side or a team, so it’s an “either or” bet. In horse racing, a favorite, depending on field size, may have to defeat as many as five to 11 other horses. That makes it a more daunting task.
My response is, that is why horseplayers need to back overlaid horses. Overlays in the straight bet pools are going off at higher pari-mutuel odds than their perceived win odds should be. To bet blindly on short-priced horses will lead one to the poor farm.
A simple example would be a favorite who should be 1-1 (known as even money) that is going off at 8-5 odds. That doesn’t sound like much of an edge. But if you played this kind of horse over and over again, you would show a profit in the long run.
I thought that some sports bettors could be converted into playing horses, but only if the racing takeout were lowered. Here is my reasoning.
When a sports bet is made at 11 to 10 the hold is not 10 percent, it is 5 percent. The reason is because the vigorish – or “vig” – is only paid by the losing side. I have read industry columns predicting that if sports betting is legalized nationwide, the odds would need to go up to at least to 12 to 10.
The hold would not be 20 percent, but 10 percent because only the losing side pays the vig. That is still much lower than the pari-mutuel hold on straight bets in horse racing, which ranges anywhere from 16 to 20 percent.
What that tells me is that once sports betting is legalized in the U.S., horse racing will lose even more customers to sports betting and not the other way around.
I believe what horse racing will need to do is fight fire with fire. If legal sports betting is offered with a 10 percent hold of 12 to 10, then the horse racing industry should reduce takeout on win, place and show betting also to 10 percent.
I suggest this change should come ahead of the legalization of sports betting. The horse racing industry is almost never proactive. But if the industry will fight to protect its turf, then this needs to be considered.
I’ll close by stating that the sports and horse bettors I meet in Las Vegas are price-sensitive. They understand the math of takeout and hold. It’s why a lot of horseplayers bet on sports but not the other way around.
When horse racing had a betting monopoly back in the 1950s it could keep its pricing low. But as competition has come in waves – first from state lotteries, second from casino gaming, and third many predict will be from legal sports betting – horse racing has raised its pricing instead of lowering it.
Win, place, and show pools have shrunk to where they are no longer the dominant pools compared to the multi-horse and multi-race pools. Thus, lowering the takeout on straight bets would be a good strategy, in my humble opinion, and maybe a starting point for new bettors to the sport.
Straight pools are also the pari-mutuel pools that generate the most churn (where horseplayers take their winnings and bet them right back in the next races). More churn is a good thing for a sport always looking to increase overall handle.
Richard Eng is the author of “Betting on Horse Racing for Dummies,” an introductory book for newcomers to the sport of horse racing. For two decades, he was the turf editor and handicapper for the Las Vegas Review-Journal. He still handicaps the Southern California tracks and his picks are for sale at www.racedaylasvegas.com. You can email him at email@example.com and follow him on Twitter at @richeng4propick and on Facebook.com.