Success of CAW Guardrails at Saratoga Garners Attention

A passionate discussion by a panel considering if the casual bettor, consistent bettor, and computer-assisted wagering bettor can coexist in pari-mutuel pools points to the difficult spot in which the industry finds itself after helping to facilitate the growth of CAW handle on its races. The spirited debate Aug. 12 at the Racing and Gaming Conference at Saratoga saw prominent pari-mutuel bettor and contest player Christian Hellmers suggest significant guardrails are needed to prevent CAW from overrunning retail players, while Don Johnson, part of a CAW betting team, said each track should determine the betting mix with which it's comfortable. The discussion took place just a mile or two away from Saratoga Race Course, where the New York Racing Association has put in significant guardrails for CAW players, requiring they place bets early (by two minutes to post) and completely restricting them from some pools (such as the late Pick 5). NYRA defines CAW play as bets being sent in at a rate exceeding six bets a second. Hellmers said it's realistic to require CAW players to be the first in the pools. Tracks can do this through rules that call for CAW players to have their wagers in the pool by two minutes to post (as NYRA is doing). Hellmers said this approach sets the market that all other players can then use to make their betting decisions. He said this approach also curtails the late odds changes that have been prevalent in recent years at tracks that allow CAW betting until the gates open. READ: Dollars & Sense: Two Sets of Numbers, Different Stories "I would force them to bet early," Hellmers said. "They can get their rebates; just lock (the bet) in, lock in the liquidity. Do not do this last-minute stuff because that (early betting) will set the market, and that will allow the (data) guys to come in and build their models, and they'll know what they're getting." Hellmers believes requiring CAW handle to enter the pools a couple of minutes early will inform other bettors of the likely odds, which will increase confidence in the pools, and bring in more handle. He called the standard currently in place at many tracks, allowing CAW handle all the way until the gate opens, a big inhibitor for other players. Johnson suggested the requirement for CAW to bet early might not work because other sharp players looking for value still might not find it because they'll likely land on many of the same horses the CAW players do. He said each track should have its own policies on CAW handle. "It's not a one-size-fits-all," Johnson said. "Every geography is going to be different. Every track ecosystem inside these pools is going to be different." Daily Racing Form reported that through the first 23 days of this year's meeting, handle was down less than 0.5% compared with the first 23 days of last year's meet. While the handle is similar to last year, retail play has increased 6.8% and CAW handle has declined 29% at this year's meet. Knowing that, it's highly likely this year's handle has generated more money for purses. This is based on CAW handle typically being tied to large rebates. Steve Kornacki, who analyzes elections for NBC News and is featured on NBC Sports coverage of horse racing, said that while racing welcomes the handle from CAW players, it likely is paying the price of missing out on potential new horseplayers. He pointed to the outcry after a late odds shift as the final bets came in lowered the odds of Churchill Downs Stakes (G1) winner T O Elvis from 12-1 to 5-1 before a Kentucky Derby Day audience. "There have been a lot of anecdotes about this (late odds changes) the last couple of years. I think (late odds changes) are a thing that, to me, have been playing out on social media where those examples in big races, and in small races, get screenshotted," Kornacki said. "So there's a universe out there of not just current horse bettors, but also potential horse bettors, bettors who are betting on the NBA, betting on the NFL, betting on other sports that are seeing this. "They're not sure what to make of horse racing as a potential outlet for betting and I think the accumulation of screenshots like this, and anecdotes like that, have a discouraging effect." The chief data analyst for NBC News appreciates seeing NYRA try a different approach on CAW. Kornacki, who opened Wednesday's conference with a presentation on where racing is headed, said as a bettor he has not seen the wild, late odds changes at this year's Saratoga meet that occur at major tracks and draw those screenshots on social media. "NYRA just put out its midway-through-the-meet numbers and handle is down only a pittance but that's because there's been a dramatic reduction in CAW handle. The retail handle is up... almost enough to compensate for the loss of CAWs. "To me, I think it's an encouraging sign that the public is responding to (these guardrails). I'm very curious to see how that plays out over the rest of the meet."