Guest Post: Thoughts On A Motor-Sportsbook

(Contributor Michael Briskie is back, offering an idea to preserve the future of motorsports — JB)

“And here comes number 8, roaring off the exit of turn four! He looks to the inside, but the door is slammed shut… a quick move to the outside and he finds a lane for the pass. Every inch counts now, they are on the final straight, it’s going to be close… and Hoof Hearted sprints over the line for the win by a nose, followed closely by Deweycheatumnhowe!”

A dozen sweaty, snorting horses slow to a trot, and the victorious pony and rider are showered in garlands and champagne. You can almost smell the money in the air. The tension begins to evaporate, and the faces in the crowd, red from yelling, cheering, and willing their prize animals to victory, are either triumphant or dejected. Bets have been won and bets have been lost. At the horse race the adrenaline rush for the spectators appears to match that of the riders. By comparison, an auto race is an almost identical concept, but by the time a car rolls into Victory Lane, the luckiest fans haven’t won a dime. Maybe they leave with a tan instead of sunburn.

Henry Ford said, “The first auto race was born 5 minutes after the second car was built.” While it is undisputed that the automobile replaced the horse as the means of modern transportation, the car, despite its superiority in so many ways, has not vanquished its ancestor in popularity at the race track. Gambling, in no small part, contributes to the reason why.


Today no one doubts that the $12.3 Billion dollars spent playing the ponies in the U.S. dwarfs all the money wagered on motorsports by a staggering margin. If motorsport venues were allowed a pari-mutuel gambling license by each state the way horse tracks are, the boom in attendance and revenues could turn organizations like IMSA and SCCA into household names like NFL and MLB.

Horse racing is remarkable in its similarities to auto racing. Like horse races, auto races compete at a variety of tracks built of different lengths, surface textures, and complexity. A Steeplechase is like a Rally, for instance. Horses and their stables are owned by individuals of substantial wealth, much like the owner of a private auto racing team. Jockeys are intense athletes who balance on the line of strength and anorexia, just like pro drivers in Formula 1. The byzantine series and club regulations that improve dictate the type of racing and breed of horses eligible for each competition mark the old and deep traditions rooted in each sport.

Horse racing is surrounded by a prestigious display of glamour befitting of these beautiful animals, and big races like the Kentucky Derby can bring in over $100 million in wagers. Like other high profile American past-times, money riding on the outcome is one of the biggest reasons why people watch. Fantasy football became big business practically overnight for good reason. So how could you up the stakes in motorsport? Let’s start with the obvious.

To go to a NASCAR race, you have to pay for a ticket at the door. It can cost anywhere between $20 all the way up to a few thousand for box seats at a big race. At a horse track, admission is free or at most a few dollars. Horse tracks don’t use ticket sales to pay for their big fancy hat parties. They count on the intensity of the fans to return year in and year out to share in the tradition, experience, glamour, excitement… and most of all, the thrill of profits. Horse racing uses a special type of betting, different from the wagers you can place on traditional sporting events at casinos in the three states that allow it. Unlike bookies calculating odds based on stats, horse betting is based on the number of people willing to gamble.

Enter the world of “Parimutuel Betting”. In motorsports it would look like this: A GRC race has 10 driver entries. If 10,000 people each place a $5 bet, there is a $50,000 pool. They can bet whatever amount they want, but this example uses the same dollar value for each bet for simplicity. The house (racetrack) takes 20% of the pool, or $10,000. The track splits this “take” with the winning team or driver, as a bonus for their performance, and also pays a percentage in taxes to the state.

Assume this particular bet is for the driver to win 1st place. These odds are constantly changing based on how many people bet, right up until the race starts.

Since the author likes Tanner Foust, he will be the winner.

The odds for Foust at the race start were calculated based on the total amount in the pool ($50,000), minus the 10% take ($10,000), which leaves $40,000 to be divvied up amongst the 1,600 bets on Foust.

So a $5 bet on Foust to win returned a $25 payout.

This equals $5 won for every $1 wagered; or 4-to-1 odds including the $1 bet

Tracks offer some pretty complicated and risky bets (trifecta, anyone?). But simple, common bets like Win (as shown), Place, and Show are easy enough to understand, even for a novice gambler. If you bet on a driver to “place”, he would need to come in 1st OR 2nd. “Show” would require any podium step, 1st, 2nd, or 3rd. Combination bets are possible, covering multiple races, multiple drivers, et cetera and the odds adjust accordingly. While there may be only a few races in a day to wager on, there are many different pools to play in.

Winners and Losers

The beautiful thing about all this is that if motorsports venues were able to condone wagering on their events, a cascading effect could end up benefitting tracks, teams, drivers, media, and motorsport junkies. Everybody wins! Unless, of course, you lose your bet. But let’s look at the up side:

1) Cheaper admission – Fans can still opt in or opt out of betting. Gate prices can stay the same for regular fans, but spectators who put their money on the line get a discounted or free admission.

2) Increased attendance – Cheaper admission and a chance to win money would attract more fans. More fans means more food and beverage sales at the concessions, more golf carts rented, more merchandise sold at the trackside store, and more money spent at midway vendors.

3) Bigger purses – Winning a race is a huge team accomplishment, and their revelry is ever so brief up on the podium. Make it worth something more. Tracks that draw bigger crowds due to exciting racing will pay out more money to teams and drivers who split the take with the track.

4) More on track excitement – Who can deny the euphoric high of hitting Blackjack on a strong bet? Or waiting to drop your full boat in poker? Beating the odds, taking a chance, win or lose. It would be easy for anyone to pick a favorite driver or car, place a bet, and be engaged for an entire race. Fans may even come to appreciate the behind the scenes team strategies.

5) Driver rating system – Bettors use the term “Handicapping” to describe narrowing the odds of a winning horse and rider. Knowing the track and the history of a horse and rider’s performance at that track speaks volumes, especially if the competitors have been inconsistent. Most of this information is available online, some for free and a lot for purchase. Skilled handicappers can make huge amounts of money on their wagers, over time. In motorsports, does a particular driver love the rain, or race well in Porsches but not Corvettes? Seeing a driver’s profile and current ranking in the country would add to the thrill.

6) Centralized Info Base – The importance of driver ratings would result in a centralized database of racing information. Statistics like number of races entered, highest classes raced, types of cars driven, and win percentage can be fairly well equalized to determine a driver’s long term and recent success. For drivers, it could be an incredible tool for seeking sponsorship. For fans, keeping track of various race schedules, odds calculators, video replays, and lap records (potentially integrating stats from a company like RaceMonitor) would be easy. Equibase does this for horse racing. Imagine if motorsports had this much info centralized, circulating and available to the public before each race. Do you ever remember SPEED.com having that much info?

7) Tax benefits for the state – It’s just like the lottery, with more fun and a chance of actually winning. It’s really all for the children!

8) Simulcast/broadcast opportunities – This is the best part, albeit the most farfetched. At best, the US gets a couple of TV races each weekend. NASCAR and Indy, that’s about it. But when people have skin in the game, or want to put a few bucks behind an up-and-comer racing in Pirelli World Challenge B-spec next weekend, independent production companies would have an incentive to mobilize video equipment and make sure they capture even moderately popular races and broadcast them streaming, live… perhaps with a subscription model like Aussie V8 Supercars or MotoGP. So what if the pool is small or the odds are slim? Throw a couple bucks behind some new talent and help him along with the purse money if he wins his class. Minimum bets, maximum fun.

Barriers

Pari-mutuel betting is actually legal in most states. There are still, however, books of laws preventing motorsport tracks from operating as safe and legal gambling venues.

First of all, the PASPA laws make betting on amateur or pro athletes illegal in most states. Horse racing, and most pari-mutuel betting including Jai Alai are excluded. If there is any hope for motorsports, it must be added to the list of exclusions.

The expenses are also daunting. In Massachusetts, for example, a facility must pay $400,000 in a non-refundable application fee for a gambling license. To emphasize, that means there is no guarantee of approval. Both of the Carolinas, our non-contiguous states, Utah, and a few others are not even open to discussion.

Furthermore, persuading all the independent sanctioning bodies in the US to become friendly to the idea of spectator money riding shotgun around the track could prove difficult. SCCA, NASA, IMSA, NASCAR, Indy, etc could each choose to avoid racing at betting tracks.

If each track ran their own book, using computer software to calculate odds, cashiers, and a security system to control cash transactions, at the end of the day those tracks would still need enough bettors in the pool to cover their overhead. Most of the horse tracks survive because the simulcast infrastructure exists so they can take bets even on days they are not running live events. Would auto tracks be able to do the same, or would their gambling days be limited to the few live races they do every year?

Finally, gambling on horse racing is on the decline to the tune of 4% each year. Would auto racing be any different? Betting the ponies used to be one of the only ways to legally gamble, but with so many casinos today, this just isn’t the case anymore and perhaps people would rather just go to there instead.

To Make a Small Fortune in Racing…

Unlike the casinos, pari-mutuel betting locations don’t care if bettors lose or win. If someone invents a statistically reliable handicapping system to make money betting on races, their wagers are welcome even if they win every single bet. The track makes money regardless. Fans still get the same racing, but with the optional excitement of bankrolling a driver.

It’s been beaten into drivers, “To make a small fortune in racing, start with a big one.” Young racers today need millions to make it to a pro level, and most never get there. Could amateur races that pay real winnings help turn racing into a viable career path for those with talent but a lack of money? Betting on these drivers may not always pay off, but fortunes would change in motorsport. The spirit of high stakes competition could reignite the entire experience for tracks, drivers, and most importantly, fans of the automobile.

11 Replies to “Guest Post: Thoughts On A Motor-Sportsbook”

  1. Harry

    I would be into it. Back when all you needed was a credit card to place Cayman Island based sports bets I paid for a lot of textbooks with formula 1 side bets. In particular, Takuma Sato’s fantastic 2002 finish in Suzuka was lucrative.

    Reply
  2. st1100boy

    Let’s do it! I’m actually for fully legalizing all or virtually all forms of gambling, sports or otherwise. I’d love to see (but may not live long enough) every town having a bookmaker on main street, like one sees in England.

    There is something of a precedent for motorsports actually organized expressly for gambling: Japanese Autorace. https://www.youtube.com/watch?v=ptI_EPnNAxQ

    Weird, but very cool.

    Reply
    • Michael Briskie

      Yup, those velodrome riders are crazy. I didn’t have enough info about the sport to include it in the article, but I would be interested to hear from someone who has seen one live.

      Reply
  3. Gamblor

    “If motorsport venues were allowed a pari-mutuel gambling license by each state the way horse tracks are, the boom in attendance and revenues could turn organizations like IMSA and SCCA into household names like NFL and MLB.”

    As noted in the post, horse racing is a dying sport. Attendance is on a long-term decline. What evidence suggests that allowing at-track wagering on auto racing (which I am not opposed to) would materially increase attendance or interest?

    “There were 82,708 races in 1989 but promoters in the USA were only able to offer 51,688 races in 2006 which fell to 37,614 in 2016. … Here is the most concerning aspect of North American racing. In 2006 US combined pari-mutuel handle/sales turnover including commingling returned US$14.75 billion. At the end of 2016 it had fallen precipitously to US $10.74 billion with the trend more than looking likely to continue in 2017 and well beyond.”

    http://jamaica-gleaner.com/article/sports/20171104/decline-horse-racing-north-america

    And how much of that handle is done OTB or at non-track casinos? While it might pump revenue in to the sport, I don’t see it changing the entire experience for tracks or fans

    “Simulcast/broadcast opportunities”

    Again, the horse racing experience shows that just cause you can bet on something doesn’t mean people will care enough for networks to think it will be a good broadcast for ratings. Aside from the larger events (similar to auto racing that is already covered by tv), horse racing is not often televised in the US, and (I don’t even know if these are still around) ultra-niche satellite channels that did carry simulcast feeds from the tracks have ratings that make the pathetic auto racing ratings on FS1/2 look good

    Family subscribed to The Racing Network satellite channel (horse racing simulcasts) in the late 90s. It abruptly shut down in 2001. Per this article, it had between 10,000 and 20,000 subscribers when it shut down. Yes it was a subscriber channel, but still, nearly 20 years ago when the sport was a better position, you only had 20,000 people wanting to watch this in home. Allowing wagering doesn’t strike me as a growth avenue
    http://www.drf.com/news/racing-network-goes-out-business

    “the car, despite its superiority in so many ways, has not vanquished its ancestor in popularity at the race track”

    I know the author does focus on the lesser formulae, but, collectively, auto racing beats horse racing in attendance, tv ratings and dollars, ad revenue, sponsorship dollars.

    Reply
    • Michael Briskie

      Points well taken. Maybe this pipedream wouldn’t drive motorsport to new heights, but I don’t think it would hurt. The precedent is there in horse racing, and the formats are the same. Gambling arguably has kept horse racing industry alive all of these years. It would be totally irrelevant already without the betting, but 30,000+ horse races each year is a lot more events than auto races. And today, millions of people drive cars every single day, but how many ride horses? There is a lot more relevance in autos than horses. Motorsport betting will probably never happen, but if it did, I can only see it helping the sport, even if it’s already on a similar decline.

      Reply
    • Disinterested-Observer

      If the point it to make racing profitable it might work, if the point is to expand the audience I doubt it will help. A while back I had some business to do in West Virginia near Summit Point. After thoroughly enjoying an hour or two of some random endurance race that happened to be going on when I stopped by I decided to check out the ponies at Charles Town. Making my way through the small and clean yet still depressing Casino to the track/OTB area it was like stepping back in time. In the bowels of the building there were screens everywhere showing races all over the world for these Ratso Rizzo looking mfers to waste their child support payments on. It reminded me of going to the Aqueduct in the seventies. I went out to the stands because I like to watch the horses in the walking ring before the race, and there might have been 2-3 people outside. Everyone else was in the basement.

      Reply
  4. stingray65

    Interesting, but it wouldn’t work for a lot of reasons.
    1. Horse racing is made up of many short races in one day, so lots of opportunity to bet while at the venue. Car racing typically has 1 or only a few longish races per day (Indy 500, Daytona 500, LeMans 24 hours, etc.), so very few opportunities to bet while at the venue.
    2. Since there are few car races per day, you would almost need to allow betting during the race which is problematic for odds setting and payouts if a crash takes out lots of favorites and/or one driver get an “insurmountable” lead.
    3. Lots more opportunities to cheat – most race horses want to run and a cheating jockey can at best try to “hold it back” a bit, but a race car will only go as fast as the driver wants to go. What prevents the mob or unethical team owner/driver from saying he blew an engine or a tire problem or some other issue that would change the finish results to let a long-odds driver to win the race and create a bit payday for the cheaters?
    4. NASCAR, Indianapolis, and lots of local tracks have a heavy family oriented audience, who may not think too highly of their sport becoming a betting casino. Horse racing needs betting to survive, because otherwise only about 6 people on the planet would ever watch, and hence has never been a family friendly sport – only degenerates (slight exaggeration) go to the horse tracks regularly.

    Reply
    • baconator

      (1) and (2) are totally fixable – do 20-minute heat races like the dirt tracks or PCA. I’d love to see the racing that NASCAR or CART guys could do if they were at qualifying pace for a whole race. Fun format.
      (3) is a real issue. Maybe you could tweak the incentives that they get so that there’s too much money in a podium finish to justify sandbagging?

      Reply

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