Betting on a wind­fall from unique merger

The Denver Post - - BUSINESS - By Ja­son Blevins

The op­er­a­tor of the Ara­pa­hoe Park race­track has a plan to boost busi­ness: al­low peo­ple to bet on pro­fes­sional ath­letes much like they bet on horses.

Mile High Rac­ing & En­ter­tain­ment has won ap­proval from the Colorado Rac­ing Com­mis­sion to of­fer fan­tasy sports betting at its Aurora track and at its nine off­track betting par­lors across the state. But it’s not like the fan­tasy sports betting that has swept the coun­try in re­cent years, ex­plod­ing into a bil­lion-dol­lar in­dus­try. This new fan­tasy sports plan — the first of its kind out­side Ne­vada, where it was ap­proved this year — merges tra­di­tional horse rac­ing parimutuel betting, odds and ter­mi­nol­ogy with pro­fes­sional football and bas­ket­ball.

In­stead of as­sem­bling a fan­tasy team, gam­blers pick ath­letes to win, place or show. They can pick groups of ath­letes for a daily dou­ble or tri­fecta — say, the top-five quar­ter­backs or re­ceivers on any given Sun­day, or the top scor­ing guards dur­ing a stretch of NBA games.

Rather than betting on a horse to win, a gam­bler can bet that Tom Brady throws for more yards than any other NFL quar­ter­back on game day.

Even­tu­ally, back­ers hope to ex­pand fan­tasy betting be­yond football and bas­ket­ball into hockey, baseball, golf and NASCAR. It’s a new ap­proach to gam­bling that horse track op­er­a­tors across the coun­try hope can re­vive the wan­ing sport of kings.

“This can help what we do at the race­track and can bring more peo­ple in the doors and help us grow a year-round au­di­ence,” said Jonathan Horowitz, the an­nouncer at Ara­pa­hoe Park, which is op­er­ated by Mile High Rac­ing & En­ter­tain­ment. “It’s ex­cit­ing and new, and it’s never been done be­fore. Maybe it can be­come a model for other race­tracks around the coun­try.”

Colorado’s once-bustling horse and dog rac­ing scene has floated a va­ri­ety of strate­gies over the past 15 years to keep afloat. Colorado vot­ers and leg­is­la­tors have re­jected sev­eral of those pro­pos­als, re­fus­ing to ex­pand Colorado gam­bling with slot­like video lot­tery ter­mi­nals at Front Range race­tracks and busi­nesses.

This time the state’s sole re­main­ing horse track is hop­ing to ride the surg­ing fan­tasy sports wave. While not nearly as vi­brant as it was decades ago, Ara­pa­hoe Park and the nine off-track betting lo­ca­tions saw $85.5 mil­lion in parimutuel bets on 363 days of simul­cast horse and dog races and 39 days of live horse rac­ing at the Aurora horse track in 2015, down from a statewide to­tal of $219.2 mil­lion in 2002.

In June, the Ne­vada Gam­ing Com­mis­sion ap­proved the new form of fan­tasy sports betting, which was de­vel­oped by Vic Salerno, a gam­ing pi­o­neer and mem­ber of the Gam­ing Hall of Fame. Salerno’s Las Ve­gas-based USFan­tasy Sports is part­ner­ing with Mile High Rac­ing to bring his fan­tasy sports betting to nine lo­ca­tions in Colorado, in­clud­ing Ha­vana Park in Aurora, Red & Jerry’s in Sheri­dan and off-track betting par­lors in Fort Collins, Gree­ley, Colorado Springs, Grand Junc­tion and Pue­blo, and two in Den­ver.

“This is a sig­nif­i­cant step for­ward for USFan­tasy Sports and we are ex­cited about the Colorado mar­ket and our po­ten­tial for growth within the state,” Salerno said in a news re­lease. “We look for­ward to con­tin­u­ing our ex­pan­sion across the United States.”

This year, Colorado leg­is­la­tors crafted a bill that reg­u­lates the boom­ing pay-to-play bil­lion-dol­lar fan­tasy sports leagues that are banned in some states, where they are seen as a form of gam­bling. The law re­quires li­censed league op­er­a­tors to al­low reg­u­lar au­dits and back­ground checks and keep records of daily op­er­a­tions. League op­er­a­tors must reg­is­ter with the new Of­fice of Fan­tasy Con­tests, a branch of the Colorado Depart­ment of Reg­u­la­tory Agen­cies.

Leg­is­la­tion govern­ing fan­tasy sports betting in Colorado goes into ef­fect July 1. Mile High Rac­ing al­ready has a state reg­u­la­tory frame­work that al­lows parimutuel betting. The com­pany is ex­pand­ing parimutuel betting to in­clude pro­fes­sional ath­letes. The Colorado Rac­ing Com­mis­sion in Septem­ber ap­proved the USFan­tasy Sports part­ner­ship with Mile High Rac­ing.

“Colorado reg­u­lates what we do at Ara­pa­hoe Park, so we al­ready have a frame­work in place to make sure ev­ery­thing is above board and fair,” Horowitz said.

The leg­is­la­tion signed by Gov. John Hick­en­looper in June specif­i­cally says fan­tasy sports con­tests are al­lowed at li­censed fa­cil­i­ties such as casi­nos, as well as horse tracks and par­lors li­censed for parimutuel betting.

That spe­cific word­ing was what prompted Mile High Rac­ing to pur­sue the deal with USFan­tasy Sports, Horowitz said.

Mile High Rac­ing must se­cure a li­cense from the Depart­ment of Reg­u­la­tory Af­fairs be­fore the new fan­tasy sports leg­is­la­tion takes ef­fect July 1, said Colorado Depart­ment of Rev­enue spokes­woman Lynn Granger.

Colorado’s casi­nos are not em­brac­ing the new betting strat­egy, ar­gu­ing this is not re­ally fan­tasy sports betting as de­fined by the state’s fan­tasy sports bill.

“The bill doesn’t al­low parimutuel wa­ger­ing in fan­tasy sports,” said Lois Rice, ex­ec­u­tive di­rec­tor of the Colorado Gam­ing As­so­ci­a­tion, which rep­re­sents 21 casi­nos in Colorado’s three gam­ing towns. The state’s casino in­dus­try — along­side the na­tional gam­ing in­dus­try — sup­ported a reg­u­la­tory frame­work that could al­low casi­nos to de­velop fan­tasy sports betting.

Be­cause parimutuel prizes are de­ter­mined by the size of all the bets made and the new law re­quires that prizes be out­lined be­fore bets are placed, the as­so­ci­a­tion thinks this new form of fan­tasy sports betting is il­le­gal.

“The games pro­posed here can­not meet this straight­for­ward and im­por­tant re­quire­ment,” Rice said. “No form of gam­bling is le­gal un­til it’s ap­proved by ei­ther the leg­is­la­ture or the vot­ers, and that hasn’t hap­pened here. The track doesn’t get to in­vent its own ex­cep­tion to the law just be­cause they wish the law was dif­fer­ent.”

John Leyba, Den­ver Post file

Gam­blers can bet on whether Tom Brady will have the most yards of any quar­ter­back on a given day. Bron­cos fans hope that won’t be the case Sun­day.

Quar­ter horses race at Aurora’s Ara­pa­hoe Park, which is op­er­ated by Mile High Rac­ing & En­ter­tain­ment. Horse rac­ing in Colorado is de­ter­mined to stay afloat. Kathryn Scott, Den­ver Post file

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