In the US, pari-mutuel betting has been the standard for horse racing. But could fixed odds revive the flailing industry?
Anyone in the US horse racing sector will undoubtedly tell you how vibrant and alive it is. Yet the statistics paint a different picture. The US sportsbook industry is bringing in $147.9 billion a year. Yet only a small amount of that comes from horse racing, with the rest going to football, basketball, and other interests. But can fixed odds wagering save the industry and turn interest around?
The Decline of the US Horse Racing Sector
Figures from the first quarter of 2025 show how the industry is in decline. Wagering on horse racing fell by 3.28%. More worryingly, part of this may have been caused by the sector itself: The number of racedays reduced by 3.73% year upon year. In 2024, 754 racecards had taken part, yet this was 715 in 2025. This meant races plummeted from 6,410 to 6,171.
All of this was against a backdrop of increasing use of sportsbooks, both on and offline. Customers now have the option to benefit from bonuses such as matched deposits and free bets. While the states in which they can be claimed are limited due to laws, more are opening up to online sportsbooks, swelling the industry. You can click here to see which they apply to. As an example, Michigan made $460.5 million in sports bets in 2024, all of which was taxable income.
Other statistics only add to the worry. More racetracks have closed, such as Golden Gate Fields in Northern California. Bad weather also contributed to this.
The Change to Fixed Odds
One possible solution is the change to fixed odds wagering, and it has already been legalized across many US states. West Virginia was the third to introduce it in April, following New Jersey and Colorado. It will now be allowed not only in betting places and sportsbooks, but through online outlets.
Fixed odds wagering allows a person to place a bet on odds that are set. Thus, when you make the bet and are given a price, it does not change. It is popular in other sports, and most horse racing outside of the US uses this method.
The alternative is parimutuel betting. This is where all the wagers placed on a bet are pooled. The bookmaker takes their cut, then any winnings are given out as a share of the amount. In other countries, this is known as a Tote, short for totaliser. The downside is that bets can change depending on how much is in the pool. The gambler is essentially betting against the other gamblers and their outcomes, as opposed to the bookmakers.
How Can Fixed Odds Help Us in Horse Racing?
Fixed odds wagering does not have to be exclusive. In fact, in tracks across the world, the two work side by side. In the United States, it has been the favoured method for horse racing bookmakers because of the safety it affords.
Michele Fischer is the vice president of the Sports Information Services. During a talk at The Racing and Gaming Conference, she stated that “We have to, as an industry, look at this as an opportunity to get a new audience, to expose ourselves to those people who are betting $149 billion last year and put it into the same format.”
Australia is a great case for how to introduce fixed odds without reducing the money spent on parimutuel betting. They once followed the same system as the US, but fixed odds have now risen to 85% of the betting market. This has not diminished the purse spent on pari-mutuel betting.
Watching the industry decline is not good for anyone. If fixed odds are one way to pump money back into the sport, then it is worth a try. The US horse racing sector may be able to compete on a world scale once more and draw bets from North America and even further afield.
