A British company that has popularized a cash-out option in multi-race parimutuel pools in the United Kingdom has received an operating license in Oregon and hopes to debut the same option for U.S. horseplayers soon, but the effort to implement the practice may set up a test over whether the often staid racing industry is nimble enough to adopt new technologies at a time of rapid change on the national gambling landscape.The cash-out option being pursued by the company Colossus Bets would allow bettors to sell a percentage of a live multi-race wager to Colossus before the final legs of the bets are run, up to and including the entire ticket. While the technology to scan pool data and perform the calculations to arrive at the ticket prices is relatively new, cashing out a portion of a multi-leg bet before the sequence is completed has its roots. Back when the first daily double being offered at a racetrack in the 1930s, bettors discovered that there were plenty of players in earshot who were willing to take a piece of the bet after the first leg was run.Colossus Bets, which launched in the U.K. in 2013, mostly with a focus on sports, was licensed in late January by the Oregon Racing Commission, capping a years-long process to move into the U.S. market. Colossus officials have said that they plan to initially limit their activity to partnerships with existing account-wagering companies, at first by offering access to the multi-leg pools that Colossus hosts in the U.K. for British and Irish races. After that, they’ll lay the groundwork for the launch of the cash-out options on U.S. pools, the officials said.“We are taking it slow, one step at a time,” said Sean Pinsonneault, a former Woodbine racing executive who worked with Colossus on a trial at the track nearly three years ago and then was hired by the company as its North American representative.The cash-out option, which has been available in a number of other countries for several years, has become incredibly popular among multi-leg bettors, for a simple reason: With one or more legs still to be run in a sequence, bettors can use the cash-out option to offload a percentage of their tickets, with an immediate cash payout that can, for example, cover the initial cost of the ticket while still keeping the player alive for a big payoff. The option has been a frequent topic of discussion over the past several years at racing conferences in the United States, where speakers from foreign jurisdictions, including Colossus officials, have lauded the benefits of the practice to their customers.But those countries, for the most part, provide far different structural advantages to betting operators than in the United States, where wagering is regulated on a state-by-state basis, bookmaking is largely illegal (but perhaps soon becoming less so), and the interests of racetracks and horsemen are protected under a set of federal laws. As a result, betting operators in foreign countries often have wide latitude to offer innovative products to their customers, while the Colossus effort to offer cash-out to players in the United States may run into regulatory obstacles.Account-wagering officials who have talked with Colossus were generally positive about the cash-out option and other products the company hopes to offer, but they were also circumspect about the prospects of getting regulatory approval, cognizant of the number of times that racing commissions or racing constituents have blocked efforts to upset the status quo.“The Stronach Group has looked closely at the cash-out concept, and it’s something we’re very intrigued by,” said Scott Daruty, president of Monarch Content Management, a company within The Stronach Group that manages simulcasts and Xpressbet.com, its account-wagering operation. “We think it would be a great benefit to our customers and would love to offer it, provided we can do so in a legal way and with the approval of regulators.”Technically, this is how the cash-out option works. Colossus, using a proprietary system that it says has been patented in the United States, analyzes the pool data of a multi-leg bet, down to what is called “ticket detail,” meaning specific data on how all existing live tickets are structured. The program then determines the mathematical probabilities of the tickets cashing out at the end of the sequence, and then assigns a theoretical worth to the existing tickets.The price that the system offers a specific bettor reflects that theoretical price, but it also is discounted so that, over the long-term, Colossus makes a profit on the ticket shares it purchases (some of that profit would be shared with the host track, Colossus officials said). All of that relies, of course, on the Colossus system being capable of making accurate predictions.While the calculations are relatively simple when only one leg remains to be run – it’s possible to do a rough estimate using just pen and paper with the will-pay figures – the analysis gets enormously more complicated with each additional race remaining to be run. As a result, there is a limit on Colossus’s ability to offer cash-outs based on the number of races already run in a sequence. For example, it’s unlikely that any player will get a cash-out offer after one race in a pick six is on the books.“We would have to have the ticket detail,” Pinsonneault said. “So there is some work we would have to do with the tote companies and the host tracks to make sure we have that. But when we say that, ‘ticket detail,’ we’re not talking about personal information about the ticket-holder,” even though some account information would need to be shared about the ticket-holder in order to transfer the sold portion of the ticket to Colossus.Anthony Trezza, a horseplayer who focuses on multi-race bets who also is an avid sports gambler, said that he would welcome having the option to cash out a portion of his multi-race bets in horse racing. Trezza also plays sports parlays, and sports betting operations in New Jersey are already offering cash-out payments to players when one game is left to be decided. On several occasions, he has taken the payout, he said, though he resists most of the time.“I think it’s just a great opportunity in horse racing,” Trezza said, acknowledging that he did not previously know that cash-out options were available on multi-race bets in other countries. “You think about all the things that can happen to horseplayers during a day at the racetrack. It might start raining, a rail bias might come up, you just aren’t feeling it going into the last leg of a pick six. That’s where you’d want that option. Everybody knows that anything can happen during two to three hours at the racetrack.”It’s no coincidence that Colossus’s effort is coinciding with a surge of interest in the U.S. gambling market since the Supreme Court issued a ruling last May paving the way for states to authorize sports betting. That ruling has led to hand-wringing from the U.S. racing industry, which sees sports betting as both a new opportunity and a new competitor. For those looking keenly at the competition, they see a number of companies, such as DraftKings and FanDuel, that are pushing for the adoption of novel bet types and wagering options that will spread the appeal of sports betting across wide swaths of new demographics.Pinsonneault cited the burgeoning use of cash-out options in sports betting as evidence that racing needs to move the same way.“This is fast becoming part of the wagering landscape,” Pinsonneault said. “Bettors are going to want this as part of their options for every bet they make.”The Association of Racing Commissioners International, an umbrella group for state racing commissions that develops model rules, has not yet studied the cash-out model that Colossus hopes to offer, according to Ed Martin, executive director of the organization. However, Martin said that he has lately been encouraging racing commission directors to “keep an open mind” about new wagering opportunities in horse racing, due to the competition racing is soon to face in more and more jurisdictions from sports betting.“I’ve been telling them that we are on a new frontier, so horse racing needs to be creative, aggressive, and united, and stop worrying about relatively minor issues when the population is going to have so many new legal options to wager on sports,” Martin said. “We are in a whole new world now.”