CAW handle drops nearly 50% at NYRA amid new rules
Since the New York Racing Association implemented restrictions on when computer-assisted wagering teams can bet into NYRA pools, handle from those entities has dropped nearly 50%.
"This is all about the customer," NYRA CEO David O'Rourke said in a news conference with trade reporters via Zoom. "We've heard the frustrations; what we're trying to do is excise out the handle that is causing the public's view of this being a poor wagering product. This type of handle has been destructive of the customer experience."
NYRA started down this path in July 2021 when it restricted CAW from the win pool inside two minutes to post. Then, 4 1/2 years later, NYRA announced that it would take an even more aggressive step by prohibiting all CAW activity inside one minute to post and completely removing such play from Pick 5 and Pick 6 pools. Those restrictions went into place on Feb. 11 alongside the previously existing win pool limits.
"The measure has successfully eliminated dramatic late odds fluctuations while providing NYRA with a foundation of relevant data and information," NYRA vice president of communications Patrick McKenna said.
CAW handle was about 20-22% of total NYRA handle before February; it is 12-13% in the time since. Overall NYRA handle Feb. 11-May 28 is down 3.4%, but 89.5% of the reduction is because of the 48.4% drop in CAW. Non-CAW handle is down 2.6%, which is slightly better than the overall market being down 3.4%.
O'Rourke said 20 entities are in the CAW cohort but that only two of those 20 are responsible for the reduction in handle, which has led to a short-term drop in revenue from wagering.
"This is definitely a headwind in terms of revenue loss," O'Rourke said. "It's not existential by any means, but there are definitely some initial costs.
"We see this as an investment in the player. We're willing to wait it out to see how the market reacts. We think this is best for the player, and there is an initial cost to doing this, no doubt. We think we're on the right track here, though."
To help contextualize the improvement to the non-CAW player, NYRA Content Management Solutions worked with the Thoroughbred Racing Protective Bureau to develop a volatility index that measures how pools move until the race begins.
"This index measures the average deviation of odds changes across the entire field," NCMS president Jack Jeziorski said. "The greater the number, the greater the volatility, so if it's 'zero' then that's no change. In January the volatility was 5.95, which I understand is pretty typical across the industry. Since Feb. 11, the volatility is 2.59. That's about a 50% reduction in late odds changes, which leads to a better experience for the customer."
NYRA said it is currently measuring volatility in the win and exacta pools with plans to continue working with the TRPB to expand to the double pool. O'Rourke noted that the initial pools being studied are those the public has the most access to.
In terms of that access, NYRA has partnered with Joe Appelbaum's Waiger Inc. to develop customer-facing dashboards that allow the consumer to study tote data. Currently only historical data is available, but a real-time rollout is planned.
"The ability to deliver tote data to gamblers in a real way would allow players to focus on value and understanding that this is a market and not just about picking a horse," Appelbaum said.
O'Rourke said NYRA will increase its investment in marketing pari-mutuel wagering on its races, noting a new app is planned for fall, and that it will continue to use the Fox Sports content it produces to promote wagering while using Waiger to appeal to data-driven gamblers.