Fixed-odds betting on horse races is on the way in New Jersey, as a bill to legalize the odds structure has passed the Senate and is on the way to Governor Phil Murphy’s desk. It looks like an absolute lock to be destined for Murphy’s signature, as the Senate voted for the bill 40-0 and the Assembly green-lit it 71-0.
Lawmakers passed AB 4909 with an emergency clause, meaning it would take effect immediately upon signing. There are still the regulations to work out, but the New Jersey Division of Gaming Enforcement and New Jersey Racing Commission have just 90 days from the law’s effective date to take care of that.
To many of you, the term “fixed-odds” probably means nothing when it comes to horse racing. After all, isn’t betting all about just putting your money down on a horse and getting paid based on the posted odds? Well, yes, but the way those odds are derived is the key.
Most horse racing – in North America, at least – uses the parimutuel system for betting. In a parimutuel system, the bettors are actually betting against each other. Everyone’s wagers go into a pool, the track takes a cut, and then the winners are paid from said pool. In the meantime, odds are determined based on the money that goes into each bet, so odds can fluctuate until the race begins, even for those bets already placed.
In fixed-odds betting, you are betting against the house, like in traditional sports betting. For casual bettors, the biggest different one will see is that once you place your bet, your odds are locked in, hence the term “fixed-odds.” Odds can still change – lines move all the time – but your own line that you have will stay in place as soon as you put down your money. The odds movement afterward is only for bets from that point forward.
Race tracks are generally in favor of fixed-odds betting for the simple reason that it is a betting system that is more accessible to fans, easier to understand. That is likely to bring in more bettors and thus more money to the tracks. The one fear for race track operators is the possibility of fixed-odds betting cannibalizing parimutuel activity. Experts agree that there is room for both – exotic bets tend to work best in a parimutuel system – but it remains to be seen how it will work in widespread practice.
Seasoned, professional bettors (as well as serious amateurs) may still gravitate toward parimutuel wagers. Because bettors compete against each other in a parimutuel system, those who know what they are doing have an edge. But with fixed-odds being added to the mix, those experienced bettors will also have more opportunity to shop around and find the best deals.
