Woodbine CEO Jim Lawson said the ability to bet on horse racing in Canada via one of the biggest Ontario sportsbook operators has the potential to be transformative for the country’s horse racing industry.
Today, Woodbine announced a partnership with bet365 that will allow sports bettors to wager on horse racing via the legal Ontario sportsbook app before Sunday’s 164th running of the King’s Plate at Woodbine Racetrack in Toronto.
“The sports betting market in Ontario is approximately $8 billion [annually] today and expected to grow in coming years to $10 billion,” Lawson told PlayCanada on Tuesday. “Worldwide, horse racing is about 8% of all sports betting, and we see that potential in Ontario and it’s in new customers. It’s not our core customers, it’s the new younger sports betting customer which is the exact demographic that we’re looking for. So, it’s huge for the horse racing industry to sustain itself in this province.
“It’s a game changer because without it, [horse racing] as an industry could have been in in real dire straits.”
There are some final tech tweaks to be worked out. But betting on horse racing in Canada is expected to be available in the coming days on bet365.
Bets on horse racing placed on the bet365 Ontario horse racing app will be routed through Woodbine’s tote system.
Lawson said bet365 is not an exclusive provider of betting on horse racing in Ontario. Woodbine plans to expand betting on horse racing to other Ontario sportsbook apps. But, the reality is technological hurdles likely mean bettors won’t see horse racing on other ON sports betting apps until 2024.
First time betting on horse racing available on Ontario sportsbook apps
The deal marks the first time betting on horse racing has been offered via a legal Ontario sportsbook.
Prior to the partnership with bet365, betting on horse racing while the bettor is located in Canada was only allowed at Canadian racetracks and through Woodbine’s two betting platforms: HorsePlayer Interactive (HPIbet) and Dark Horse Bets.
Woodbine said betting on horses via bet365 will be, “a seamless experience for customers and they will only require one wallet.”
All horse racing currently offered by HPIbet will be available to bet365’s Ontario customers.
And, horse betting handle generated through bet365 will be considered Home Market Area handle, which contributes to the Horse Improvement Programs that support some 25,000 full-time equivalent jobs in the province’s horse racing industry. Woodbine is a not-for-profit, meaning the proceeds of wagering go back to support the industry and Woodbine itself.
Deal was well over a year in the making
As Lawson (above) told PlayCanada in December in the first of a two-part series, Woodbine has worked for well over a year for the right to showcase its betting product on legal sports betting sites in Ontario while also protecting the handle that is the lifeblood of a labor-intensive industry.
Prior to single-event sports betting being approved federally in 2021, Woodbine fought and won the right to exclude operators from offering pari-mutuel wagering in Canada. That meant Ontario online gambling operators could not add horse racing to their gambling mix.
“Horse racing remains pari-mutuel and with us being the only current pari-mutuel license holder in the province of Ontario, if they want our product, they have to come and get it from us,” Lawson told PlayCanada in August of 2022.
Pari-mutuel wagering is a system in which bets are pooled. The house take is deducted and the payoff odds are calculated by sharing the pool among all winning bets. The system is critical to supporting the costly exercise of owning and campaigning racehorses and putting on the horse racing product.
Woodbine said fixed-odds wagering would kill the sport
Woodbine was concerned that bringing in the fixed-odds wagering that sportsbooks offer would lead to razor-thin margins and, ultimately, horse racing’s demise.
Michael Copeland, Woodbine’s president commercial, previously told PlayCanada the ban on other operators being able to offer pari-mutuel wagering directly was “specifically to allow the profits from racing to remain within the industry and not to leave through an expat entity.”
It’s a vicious circle.
Racehorses cost a lot of money to breed, acquire, feed, keep and train. Race purses are, mostly, derived from the track’s take of pari-mutuel wagering. The danger is a lower take for the tracks leads to lower purses. Lower purses drives owners out of the game of racing horses. Since field size is critical to driving handle, having fewer horses leads to smaller fields. That leads to a further decline in handle. And, in turn, that lowers purses even more and drives more horse owners out of the game.
And that could spell the death of horse racing, an industry that provides significant employment in rural Ontario.
Lawson stressed this week that Woodbine is working on delivering fixed-odds wagering on horse racing. But, it will likely take many years to come to fruition.
What took so long?
Woodbine’s initial hope was to be able to offer its product on Ontario sports betting apps by March or April of this year.
Bet365 already missed out on the Canadian wagering opportunity that was the US Triple Crown races (the Kentucky Derby, Preakness and Belmont). It also missed out on Woodbine’s premier standardbred race, the $1 million Pepsi North America Cup in June. A solid $5.2 million was bet on that card at Woodbine Mohawk Park. But, there’s no telling what the number could have been if betting on it had been available via bet365, as well.
Lawson said Tuesday that both technological and the regulatory hurdles caused the delay. On the regulatory side, Woodbine had to wait on both the Canadian Pari-Mutuel Agency and the Alcohol and Gaming Commission of Ontario to sign off on the deal.
“I do want to be fair,” Lawson said. “I think that everyone from federal justice to the CPMA, to the AGCO were all supportive. We just had to work through steps that were new to everyone. I never ever got a big red flag from the regulator saying, ‘No, there’s no way you can do this.’ I was always told by the regulators provincially and federally, ‘Let us work with you and work through this. This makes sense and we understand that. But obviously, we have to work through the process and make sure that everything comes together in the right way and that we’re in compliance.'”
bet365 is a giant in the Ontario online sports betting market
Woodbine’s new partner is not just any sportsbook. European-based bet365 is one of the giants of the legal Ontario sports betting game. It is also one of the great success stories of a strategy designed to transition illegal grey market operators to the regulated sector.
Bet365 was one of the most popular grey market sportsbooks patronized illegally by Ontarians. It roared into the legal market largely with its customer list intact. That gave it a huge advantage in the legal Ontario market.
The province does not release operator-specific revenue figures. But, it’s widely believed bet365 is among the leaders of a huge online sector. Ontario is home to 30 live sportsbook operators and 50 online gambling companies in total.
“We wanted to be with a big brand. And we needed someone that technologically could keep up with us,” Lawson said. “[Bet365 is] one of the more sophisticated technological groups. So, it was great to work with them for the better part of a year on integrating the systems.
“Now that we’ve done that, we’re not exclusive with them on carrying horse racing. We expect that, very shortly here, we’re going to be working with the other [sportsbooks] and it’ll take a few months to get there but we’re going to build the same platform with them. With the experience we’ve already been through it’ll be much quicker. But, we will be working with the others, likely the majors. Although, I’m not suggesting we wouldn’t do it with everyone. Our business model on this is is is working with as many as we can to get the horse racing content out there and our wagering out there.”
King’s Plate was a catalyst to getting the deal done
Getting horse racing on be365 prior to the King’s Plate was hugely important. It goes beyond exposure. Having a target helped push the deal through, Lawson said.
“Personally, I used [the King’s Plate] as a little bit of a deadline for everyone to keep pushing our team and pushing the bet365 team and everyone has rallied around to get it done,” Lawson said. “The regulators have understood this as a target and an important target. It’s a great opportunity to market it and to let people know about it. The bet365 group has a big following. So it was it was very important to put a finish line there… I did see the regulators at both levels roll up their sleeves and understand that we did have this big event.”
Sunday will mark the first time in 71 years that Woodbine’s premier event will be called the King’s Plate. From 1952 through 2022, it was called the Queen’s Plate to mark the reign of Queen Elizabeth II. After she died, her son, King Charles III, took the throne. Thus, the name of the race changed to reflect the current Canadian monarch.
This week, Woodbine announced King’s Plate tickets are sold out. Coming the same week as the bet365 announcement has already made it a banner week for horse racing in Canada.