Japan might offer Kentucky Derby betting

The Japan Racing Association will offer separate-pool wagering on the Kentucky Derby this year, provided that Master Fencer, a Japanese-bred colt, is entered in the race, officials of Churchill Downs said on Wednesday.

Master Fencer, who received an automatic berth in the Derby by earning the most points in a series of races in Japan designated to identify a potential starter in the race, would become the first Japanese-bred horse to start in the Derby if he makes it into the starting gate. Under JRA rules, wagering can only be offered on selected foreign races, and only if a Japanese-based horse runs in the race.

Post time in Tokyo for the Kentucky Derby will be approximately 7:50 a.m. on Sunday, May 4.

:: DERBY WATCH: Top 20 Kentucky Derby contenders with comments from Jay Privman and Mike Watchmaker

Due to Japan’s enormous betting volume, racetracks around the world have scrambled to lure Japanese-based horses to their races since the JRA relaxed its rules on imported simulcasts late in 2015. In 2016, Japanese bettors wagered $40 million on the Prix de l’Arc de Triomphe, and later that year, they bet $7.5 million on the Breeders’ Cup Filly and Mare Turf.

Also in 2017, the JRA opened separate-pool betting 24 hours before the Belmont Stakes when the Japanese-bred horse Epicharis was entered into the race. The horse, however, was officially scratched the morning of the race, leading to the refund of hundreds of thousands of dollars in bets already made on him.

To the consternation of U.S. racing officials and North American bettors, all of those bets were made in separate pools maintained by the JRA for Japanese citizens. Although U.S. racetracks and other tracks around the world would vastly prefer to have the Japanese bets commingled into U.S. pools, where bettors would benefit from the additional liquidity, the JRA insists that the country be allowed to maintain its own pools for races, according to U.S. simulcast officials.

It also goes both ways. North America maintains its own separate wagering pools for races held in Japan and Hong Kong, though, to be fair, the amount of wagers made by North American bettors on races originating in Asia is largely insignificant when compared to the pools in the host countries.

If Master Fencer does start, Churchill could expect anywhere from $10 million to $30 million in handle in the Japanese separate pools, simulcast officials estimate. Churchill will collect a fraction of those bets as a host fee, and although the company typically charges domestic simulcast sites roughly half of the total takeout as a fee – around 10 percent of all bets – simulcast officials with experience working with Japan say that the fee is far lower for the JRA, given that the country has enormous leverage in its simulcast relationships.

“They’re unfailingly polite people,” said one simulcast official. “But it’s really take it or leave it.”