J.N. Campbell Comment: NYRA Bets Against Computer-Assisted Wagering

What is the most positive and impactful move made by a Thoroughbred Racing Association in the 21st century? It is a fairly simple question, but the answer is much more difficult to discern. Is it banning Lasix in Graded Stakes competition? What about limits on riding crop usage during a race? Or how about the expansion of legal Advanced Deposit Wagering or ADWs, as they are called? That last one is quite controversial, but still the list could go on … My answer is unequivocal, and I think it is an impressive step in the right direction.

A bit of background first …

This is an era of horse racing complexities … the world of wagering that we live in is fiber-laden and server-driven. Out beyond, where “there be dragons,” sports betting is both an ally and an adversary, as its growth seems meteoric. Is horse racing alongside as partner, riding the coattails, or being left back at the station? What we know is that behind all the microchips and the blinking lights, the “Sport of Kings” (poor phrase) is being manipulated constantly by giant, highly-developed consortiums. They have the backing of monies that are controlled by what is called computer-assisted wagering—use the acronym CAW. These syndicates with their ENIACs can be located anywhere … all they really need is a hardline or Wi-Fi connections, a legal ADW that takes bets like 1stBet or Twin Spires, and a good bit of cash.

Other turfwriters and pundits have written extensively about the impact that they can have on any given North American horse race. Horseplayers have been crying afoul about the power of the syndicates for years. I even recall writing a piece about them a few years back defending their rights to make a wager … some kind of democratic argument. I have come to the realization what they do is extremely harmful to the game. Handles might be up above all-time highs as tracks toot their horns through a bevy of press releases. The fact of the matter is, the damage being done by these syndicates on Thoroughbred-land is not good.

Here is what is going on … If you have put money into, say a “win pool,” in an attempt to back your favorite runner, you have probably witnessed firsthand their ability to manipulate the odds on the tote board. Maybe you knew it was happening, but didn’t know why. To earn a living, what they do is run algorithms shortly before a race goes off, determining which price has the highest return of probability. That tells them where the money is going, and what bet is the one to back. They then use their online account to place huge amounts of money (easily into the thousands) on a horse. The end game is not necessarily to cash a huge score, rather it is the rebates that are offered by the ADWs for putting down such a sizable amount.

Next, that is where the disappointment sets in for the horseplayer. As the bell sounds and the entries leave the gate, the odds will flip. As you sit nervously watching the field set out on its journey, your 5/1 pick you so wisely handicapped is not that price any longer. You believed you were getting that excellent price, but the runner suddenly goes from an overlay to underlay in less that 5 seconds. Now, she is 9/5, and if she wins … well, your payoff is considerably less. The question that remains open ... would you have made that bet, if you had known what would happen to the odds on your selection? Maybe not ...

Thus, the choice of the top positive impactful move by a Thoroughbred Racing Association over the past 20+ years has arrived. Drum roll ... please ... Late last month, the New York Racing Association continued its aggressive approach to doing something about the odds changing after a race went off. They started earlier this year by taking direct aim at the CAW influence on the Empire 6, then moved on to other horizontal wagers like the Pick 6 and the Cross Country. Banning their ability to swoop in and change the odds was at an end. When it comes to money and payouts though, that is specifically the realm of “win bets.” So, in what was their most remarkable move to date, as of July 28, if a CAW is to place one of these “win” wagers they must do so before 3 minutes-to-post.

This might not seem like a major earth-moving event, but make no mistake, it has massive ramifications. First, it means that NYRA is taking a firm stand against the influx of cash that is flooding the pools, and overwhelming the tote. Second, taking a position like this could affect the revenue stream that fills the coffers … it is inevitable, if the CAWs cannot use their formulas, then their risk goes way up. They will take their business elsewhere … maybe returning with smaller wagers to try to circumvent the rules (this occurs in Hong Kong). However, at least within the bounds of what is legal practice, they cannot tempt fate. I would like to think that their exit gives the average horseplayer a much more level playing field. I believe that the ban certainly speaks to NYRA’s commitment to creating an equitable game for everyone. A bold move …

Pat McKenna, NYRA’s senior director of communications took to the airwaves this past week to announce the impact on their recent handle, and he used words like “prioritizing” and “transparency” to describe his organization’s understanding of the situation. Clearly, perception in a sport like this one is king. If Thoroughbred racing continues to bow to greed, and thinks only of the bottom line, then the Horseplayers, who form the backbone of our clientele, will continue to be marginalized. Many will look to sports betting, if they haven’t already. Here also, I applaud the efforts of what NYRA has rolled out. It is not like setting handle records is over for them. By the look of it, the influx of money has continued, as DRF’s Matt Hegarty reported, as pools remain robust. The brimming influx of money might have something to do with that this is NYRA’s signature Saratoga Meet (Whitney Day was a huge success …), but I would like to think that it could have something to do with horseplayers feeling more secure that the odds will not drop precipitously. Only time will tell if this is true …

In a horse racing world that is both complex and ever-changing, it is impressive to see an organization like NYRA doing what is right for its loyal wagering base. After all, that is a pretty important part of the future of this sport. Other racing associations would do well to take a hard look at what is going on in New York. It could mean the difference between existence and extinction in the long run. As for those CAWs, it is 3-minutes-to-post … time for you to take your algorithms and move on.