LOUISVILLE – This weekend, the spotlight is on horse racing as Kentucky Derby 152 is set to unfold at Churchill Downs on Saturday evening. This prestigious event in thoroughbred racing is expected to attract over $250 million in wagers from a field of 20 horses.
All bets will be placed through parimutuel markets provided by Churchill at the track and other venues across North America, including online advance-deposit wagering platforms.
In recent years, parimutuel betting has faced criticism due to the rise of computer-assisted wagering (CAW) services, which place substantial sums on races nationwide. These CAW accounts often make large bets shortly before a race starts, leading to a significant drop in the expected payouts for traditional bettors, as the final odds adjust mid-race based on the influx of late money.
For instance, the odds for the winner of the first race dropped by 40% right after the gates opened, while exacta payouts fell by over 20% due to CAW involvement. Kentucky lawmakers have recently taken action to address these issues during the General Assembly session that wrapped up two weeks ago. House Bill 904 includes provisions aimed at improving the parimutuel totalizer technology for faster odds updates and mandates that all types of wagers close simultaneously, whether they are small bets or large CAW wagers.
Additionally, the bill introduces the possibility of fixed-odds betting, a feature that many horse racing enthusiasts desire. However, it may take some time before any Kentucky track implements this option, and even longer for bettors to place fixed-odds bets on their favorite Derby horses.
State Rep. Michael Meredith (R-Oakland), who co-sponsored the comprehensive Kentucky gambling bill with Rep. Matthew Koch (R-Paris), explained that the inclusion of fixed-odds betting stemmed from discussions with stakeholders who have experienced international racing. Fixed-odds betting is more common outside the U.S., and there is a growing belief that it could reinvigorate interest among bettors who are frustrated with parimutuel betting due to CAWs.
Meredith, who also sponsored the Kentucky sports betting bill in 2023, noted that fixed-odds betting could help attract younger bettors who prefer fixed-odds sportsbooks. He suggested that tracks might collaborate with service providers to offer sports betting alongside horse racing, potentially creating exciting betting combinations like horse and football or basketball parlays. This approach could engage the younger generation and spark renewed enthusiasm for horse racing.
It's important to note that HB 904 does not mandate Kentucky tracks to offer fixed-odds betting; it merely permits them to do so. The legislation, which was enacted on April 14 after overriding Governor Andy Beshear’s veto, allows tracks to partner with service providers for implementation.
In Kentucky, laws without an emergency clause take effect 90 days after the General Assembly session concludes, meaning HB 904 will officially become law in mid-July. After that, the Kentucky Horse Racing and Gaming Commission will determine the next steps for implementation.