Updated on 05/09/2016 12:35PM

Wagering on Kentucky Derby dips as some bettors get shut out


Handle on the Kentucky Derby this year dipped to its lowest level since 2011, and the overnight television rating slipped to its lowest point since 2012, a surprising show of weakness rooted somewhat in the crash of a popular account-wagering site and, perhaps, the cathartic effect of last year’s successful Triple Crown bid.

The two declines were the biggest standouts in the broad mix of numbers used each year to measure the popularity of the Derby, the most prominent race on the U.S. calendar. In nearly all cases, those measures dipped compared to the records set in 2015, when American Pharoah took the Derby en route to winning the first Triple Crown in 37 years.

Attendance, for example, declined to 167,227, as reported by Churchill, still the second-best in history but down from the record 170,513 reported by Churchill in 2015. All-sources wagering on the Kentucky Derby card this year, $188.9 million, was also the second-highest in history, just behind last year’s record of $191.4 million, but this year’s number was set on a 14-race card, whereas the 2015 card had 13 races.

Betting on the Derby itself was severely compromised by the system crash of the website operated by Television Games Network, which went down at 5:30 p.m. Eastern, 81 minutes before the Derby field left the gate (the race went off 17 minutes after its scheduled post time of 6:34 p.m.). The crash, which TVG officials blamed on “human error” as the company performed a “final readiness check,” shut out thousands of the site’s customers when the system could not be restored by post time.

Total betting on the Derby this year was $123.3 million, down 9.7 percent from record betting of $136.5 million last year, according to charts of the races (the totals do not include the pools for the parimutuel future bets hosted by Churchill in the weeks prior to the Derby). According to figures maintained by the Oregon Racing Commission, where TVG operates its national betting hub, TVG’s account-wagering operation accounted for 8.6 percent of the total betting in the U.S. last year, so it is safe to assume that the crash of the site had a significant impact on Derby betting.

“We know how important it is to provide a great experience to our wagering account holders, not only on the first Saturday in May but every day,” TVG chief executive Kip Levin said in a statement Saturday. “Today, plain and simple, we let many of you down, and we’re sorry.”

In addition, many horseplayers reported that smaller account-wagering sites shut off Derby betting well before the horses entered the gate, perhaps because of the long delay between the scheduled post time and the time the race actually went off. That may have prevented players from making last-minute bets, especially since most serious bettors tend to wait until the waning minutes of the post parade before making their wagers.

Wagering through TVG’s main account-wagering competitor, twinspires.com, was up substantially compared with last year, according to the company’s parent, Churchill Downs Inc. Wagering by twinspires.com customers on the entire 14-race card was up 29 percent, Churchill said, while wagering on the Derby itself was up 22 percent, totaling $16.6 million, CDI said. Twinspires may have benefited from players migrating to the site after TVG went down.

Earlier on the card, handle on the horizontal bets paying off on the Derby, such as the pick six, pick five, and pick four, were all up, so betting on the Derby was expected to be strong since those pools generally predict the overall handle on the final leg in the bets. However, win, place, and show bets on the Derby were down 11.2 percent, exacta betting was down 8.6 percent, trifecta betting was down 10.4 percent, and superfecta betting was down 17.8 percent, according to the charts, suggesting that the TVG system crash and, perhaps, the early shutdown of other ADW sites had a tremendous impact on handle.

But there were other contradictory indications suggesting that this year’s Derby field was not as attractive to bettors as last year’s field. Ontrack handle on the Derby, for example, was down 6 percent, according to Churchill Downs. In addition, this year’s Derby had a 20-horse field, compared with an 18-horse field last year, and while the general rule is that larger fields lead to larger handle, research by Caroline Betts, a University of Southern California associate professor of economics, and Steve Koch, a former Woodbine management official, has suggested that an 18-horse field typically generates higher handle than a 20-horse field.

In addition, no favorite finished in the money in the five races preceding the Derby, which may have strained bettors’ bankrolls late in the card. Still, going into the Derby, betting on the 11 prior races was $57.9 million, up 21.9 percent over wagering on the 10 races preceding the Derby last year. First post on Derby day in both years was 10:30 a.m. Eastern, but Churchill squeezed an extra race onto the card prior to the Derby this year by reducing the time between the other races on the card.

The overnight rating for the race portion of the three-plus-hour broadcast on NBC was a 9.3, down 14 percent from the overnight rating of 10.8 last year. The share, a measure of the percentage of televisions in use that were tuned to the broadcast, was a 21, down 12.5 percent from last year. The rating was the lowest posted for the Derby since a 9.0 in 2012.

The positive media coverage surrounding the successful Triple Crown bid last year has led some to suggest that the sport is enjoying a surge in popularity known as the “American Pharoah effect,” but that theory would seem to be significantly weakened by the decline in Derby television ratings.

While television ratings are becoming less trustworthy due to the growth in alternative ways of viewing an event, it is possible that the nearly four-decade wait for a Triple Crown winner – following nine near misses over the past 20 years – had a cathartic effect on the general public, weakening enthusiasm for the Triple Crown series. The Derby favorite, Nyquist, also seemed to generate far less positive publicity last year than American Pharoah, even though Nyquist was the more accomplished horse going into the Derby.

Despite the various declines, Churchill Downs Inc. said it expects to post record earnings before interest, taxes, depreciation, and amortization from Derby week this year, with EBITDA up $4.5 million to $6 million for the second year in a row.

“A special thanks to all of the fans of the Kentucky Derby around the world who once again made this an amazing spectacle,” said Bill Carstanjen, the company’s chief executive, in a statement released late Saturday.