Posted on: October 6, 2022, 01:07h.
Last updated on: October 6, 2022, 01:07h.
The latest partnership between a sportsbook and a horse racing operator came to fruition late Wednesday when PointsBet announced a deal with The Stronach Group’s 1/ST Technology.
According to the release, the Australian-based sports betting operator’s Premier Turf Club subsidiary will develop in partnership with 1/ST a “white-label Advance-Deposit Wagering” (ADW) platform that will connect PointsBet users to racing content.
That ADW is expected to be integrated with PointsBet’s sports betting app in states where its available, allowing sports bettors to place pari-mutuel racing bets on its fixed-odds sportsbook site. A standalone PointsBet ADW will also be launched in other states. That’s expected to happen early next year.
With PointsBet’s mature market Australian racing expertise, and now a strategic partner in 1/ST Technology that provides us with a market leading portfolio of racing products and services, we can introduce new and existing customers to a dynamic and interactive PointsBet branded horse betting experience,” PointsBet Group CEO Sam Swanell said in a statement. “This will be supported through cost effective offers and marketing, along with the utilization of our extensive US sports betting database.”
The two sides signed a five-year deal that will also give PointsBet access to Stronach’s Monarch Content Management, which carries signals for a dozen tracks. That network includes Stronach-owned Santa Anita Park in California, Gulfstream Park in Florida, and Pimlico Race Course in Maryland, along with Monmouth Park in New Jersey, Del Mar in California, and Tampa Bay Downs in Florida.
Under the agreement, PointsBet will give 1/ST a portion of the ADW revenue it generates without any guarantees or upfront payments.
Major Player in US Racing
Stronach is one of the major operators in US horse racing. Santa Anita and Gulfstream offer top-flight racing throughout the year, and historic Pimlico is home to the Preakness Stakes, the second jewel in the Triple Crown. Other Stronach tracks include Laurel Park in Maryland and Golden Gate Fields in California.
“1/ST Technology is excited to be partnering with the truly innovative team at PointsBet to bring the great sport of horse racing to a growing customer base across US markets,” 1/ST Technology CEO Paul Williams said in a statement. “We are uniquely aligned on a superior product vision as well as the value that this relationship brings to our collective organizations and horse racing industry stakeholders at large.”
Will Sports Bettors Flock to Horse Racing?
The PointsBet-1/ST partnership comes just less than a month after Churchill Downs and FanDuel announced an agreement that will make FanDuel a Kentucky Derby sponsor and allow FanDuel users to make pari-mutuel wagers on races at Churchill Downs Incorporated tracks through the Flutter Entertainment brand’s sports betting app.
While there has been increased interest in bringing fixed odds to horse racing, Wednesday’s deal adds another major player that wants to see the pari-mutuel product, which features odds that shift as more money is wagered into the pool, still be the focus. The takeout in horse racing pari-mutuel wagers can exceed 20%, while the typical hold for a fixed-odds sports bet is significantly lower.
Besides its deal with FanDuel, Churchill Downs also agreed in August to sell a 49% stake in its United Tote division to the New York Racing Association (NYRA). Churchill Downs said its partnership with NYRA, which operates Aqueduct Racetrack, Belmont Park, and Saratoga Race Course, will lead to a pari-mutuel product that can be integrated into sports betting platforms.
The hope is that by attaching the pari-mutuel racing product on a platform used by a larger pool of bettors, operators like Stronach, Churchill, and NYRA can introduce a new audience to horse racing. Racing can provide a large amount of betting content for sports betting apps as races occur every few minutes across the country.
The PointsBet release from Wednesday indicated that the total gross revenue market for horse racing is expected to reach $3 billion by the end of 2025.
What remains to be seen, though, is if those new bettors will not get turned off on the sport when they see their payouts fluctuate.
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