Symposium CAW panel affirms commitment to retail bettors

In the tug of war between computer-assisted wagering and retail players, horse racing is finding few retail players willing to pick up the rope let alone pull against the powerful computer teams.

David O'Rourke, CEO of the New York Racing Association, and Eric Halstrom, vice president of racing at Horseshoe Indianapolis, both affirmed their commitment to valuing the retail player over any other type, and Elite Turf Club president Scott Daruty noted the value those players bring to the industry.

The executives spoke at a Race Track Industry Program Symposium on Racing program called "The sustainability algorithm: Balancing CAW growth with racing's long-term health" on Tuesday, It was moderated by National Thoroughbred Alliance executive eirector Pat Cummings.

"Is there a cliff ahead we are all hurdling toward that after a certain point we’ll never come back?" Cummings asked. "Or worse, are we already in the free fall?"

O'Rourke acknowledged racing's issue with optics, such as late odds changes, and a desire to improve that. NYRA was the first organization to limit CAW bettors access to the win pool inside two minutes to post. Santa Anita and Del Mar followed suit. Beginning in 2026, NYRA will limit CAW activity in all pools at one minute to post. CAW bettors will have the same six bets/second restriction as retail players once there is one minute to post.

"We produce a lot of TV, so when the win odds were changing halfway around the track, that's a bad customer experience, so we did something about it," O'Rourke said of the win pool changes. "The optics improved and other tracks have come on board, but that was just phase one. There's more to work on here. The volatility of the last cycle is a poor experience for the retail player."

Horseplayer advocate Andy Asaro was bequeathed the first question by Cummings.

"Pari-mutuel wagering is supposed to be equal footing among participants; that's not the case anymore with CAW," Asaro said. "If you want a level playing field, lower takeout and eliminate rebates.

"Can you convince retail players that they're not being cheated?"

Daruty objected to Asaro's assertion that CAW have an advantage, citing Elite's high host fees to tracks. He also said reducing takeout is unlikely.

"I really disagree that CAW gets preferential treatment," Daruty said. "In a perfect world could we lower takeout and eliminate rebates? Yeah, in a perfect world, but we don't live in a perfect world."

Halstrom said earlier on the panel that a barrier to lowering takeout on more bets is that other tracks will not follow suit. Horseshoe Indianapolis has relatively low takeout on Pick 5, at 12%, and Pick 4 and all-turf pick 3 wagers at 15%), but Halstrom is reticent to adjust pricing on other pools.

"It hurts my stomach that there are retail players who think this game is cooked," Halstrom said. "There are vehicles out there that aren’t being used that can improve the experience for retail players, but from a takeout perspective, (Horseshoe Indianapolis) is not going to be the one waving the flag and the only track with low takeout. I can't have a player cashing a bet on my track and getting a bonus and then just betting that on a high-takeout track before we even run another race."

O'Rourke agreed that lowering takeout is easier said than done. He cited varying source market fees across the country as one of the reasons lower takeout initiatives fail.

"You can get away with some low-takeout bets, but the industry pretty much orbits around a 20% blended takeout," O'Rourke said. "You can introduce some low-takeout bets but keep takeout high on other bets. With source market fees you might be underwater on the low-takeout bets but the 20% blended takeout gives you cover."

Delta Downs recently tried a pair of days with 10% takeout in all pools, and Churchill Downs Inc.'s Twin Spires wagering platform did not accept wagers on that track because of the potential for negative margins.

Cummings asked the panel point blank whether CAW or retail growth is more important to tracks, and both Halstrom and O'Rourke emphatically answered in favor of the retail player.

"We do a terrible job communicating with our customers," Halstrom said. "CAW is not our growth strategy, the retail player is."

To that end, Halstrom said he took pride in growing handle on Horseshoe Indianapolis races this year by 5% on FanDuel and only 1% to 1 1/2% on Elite Turf Club.

"I'm proud that our handle is up with different outlets," Halstrom said. "I’m proud of the connection we’ve made with our retail players. We're inching closer every day to becoming a higher level racetrack, and that’s because of our relationship with the retail player."

O'Rourke said that is encouraged by the growth NYRA has seen from retail players on sports wagering sites with a shared wallet.