04/08/2011 2:49PM

New parimutel wagers must balance difficulty, affordability

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As American racetrack operators continue to experiment with ever-more-exotic additions to their betting menus, they are struggling to locate the sweet spot between risk and reward – a balance of difficulty and affordability that has made customers flock to some of the new wagers while rejecting others.

They are finding that bigger is not necessarily better. A pick nine does not attract more action than a pick six, and fans still prefer betting on the first three finishers in a race to trying to come up with the first four or five. At Santa Anita on Thursday, for example, the pick-four pool was $275,089, while the pick-six (with no carryover) attracted $137,672 and the eight-race place pick-all handled just $22,853. In the last race on that card, bettors invested $130,293 in the trifecta, $96,932 in the superfecta, and only $41,945 in the super high five.

If there had been a carryover in the pick six, it would have topped all those pools, but not even a carryover guarantees a windfall. Last Sunday at Gulfstream Park, where a new Rainbow pick six (in which the carryover is paid out only if there is a single winner) has replaced the conventional one, a $902,000 carryover attracted just $236,297 in fresh money, well below the $458,290 on the non-carryover pick five and $417,915 on the pick four.

The pick five, an instant success when instituted at Monmouth Park last summer, has been a similar hit at Gulfstream. Keeneland added it to the menu when its spring meeting opened Friday, and California officials are looking at it as well. A relatively low 15 percent takeout rate and a 50-cent minimum have made it appealing, especially to players with moderate bankrolls who feel they are at a competitive disadvantage against bigger players in a conventional pick six.

It’s clear that players respond to some combination of lower pricing and what they consider reasonable difficulty, yet some in the industry continue to believe that mimicking lotteries is the way to go. Frank Stronach, chairman of MI Developments, proposed a “Quadruple Quadrafetca” earlier this year, and more recently toyed with a “Slider” bet in Maryland involving consecutive exactas, trifectas, and superfectas.

His advisers convinced him to table these propositions, but then Churchill Downs announced last week that it is adding a pick 10 with a carryover to the four scheduled night-racing cards at its upcoming meeting. It’s hard to imagine this will attract any serious handle until there is a mandatory payout of the carryover pool, though that carryover could be so slight that even that won’t help much.

All this experimentation, especially with lower minimums and reasonably structured bets, is refreshing for an industry whose parimutuel product line had been stagnant for decades. The lottery bets will eventually be abandoned, while those bets that thrive will become ubiquitous. In the meantime, track operators need to do a better job of making sure that their rules and regulations are up to date, so that the flood of new wagers are fully and fairly available to a national audience.

Bettors in some states have not been able to play the new lower-priced wagers because of outdated local statutes that mandate higher minimums. Forcing some customers to bet at higher minimums than others is grossly unfair and only adds to the frustration already felt by customers trying to navigate a nationally fragmented system of competing wagering outlets with incomplete signals and menus.

Then there’s the Easter problem that could affect the disposition of the current ongoing Gulfstream Rainbow pick-six carryover.

The likeliest scenario is that there won’t be the required single winner in the next two weeks, meaning that there will be a mandatory payout on closing day, when the bet will work like a conventional pick six with only a 10-cent minimum bet. With a carryover that could be more than $2 million, exotic bettors from coast to coast will want to get involved. Closing day at Gulfstream, however, is Sunday, April 24: Easter, when all New York betting outlets, and several prominent tracks, including Keeneland, are closed.

Gulfstream officials did not anticipate this scenario, but fortunately have the option of petitioning the state to move the mandatory payout day to Saturday. They are considering it, but it hasn’t happened yet. Here’s hoping it will: It would be unconscionable that bettors in two major racing centers would be shut out of the payoff day.

Perhaps one benefit of these big national pools will be finally to stir some legislative action repealing the Easter racing prohibitions. It is especially ridiculous in New York, where casinos can operate freely while racing and offtrack wagering are forbidden on both Palm and Easter Sundays. That situation will become even preposterous next year, when the Aqueduct racino will be up and running: Unless the law is changed, It will be legal to go to Aqueduct and play the slot machines on Easter, but illegal for there to be live racing or out-of-state simulcasting.