When the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in May 2018, it marked a seismic shift in American gambling. Suddenly, sports betting — previously illegal in most states—was up for grabs. In the years that followed, dozens of states legalized online sportsbooks, both online and in-person.
While the spotlight largely focused on the NFL, NBA, and college football, the ripple effects on horse racing were immediate—and complex. Some in the industry feared sports betting would siphon off fans and dollars. Others, including platforms like AmWager and other US horse betting operators, saw opportunity. Now, with more than five years of post-legalization data available, the picture is becoming clearer.
A changing competitive landscape
Before PASPA was overturned, horse racing was one of the few legal ways Americans could place a bet outside of Las Vegas. Races could be wagered on at tracks, off-track betting facilities, or through regulated online pari-mutuel platforms in certain states.
But after legalization, sports betting exploded. In 2023 alone, Americans wagered over $121 billion on sports, according to Investors.com. Digital sportsbooks brought a new level of convenience, variety, and marketing muscle—something the horse racing industry had rarely seen at scale.
Industry observers worried. In a 2019 white paper, the Thoroughbred Idea Foundation warned that horse racing was under threat. Fixed-odds sports betting offered a simpler format than pari-mutuel betting. Takeout rates were dramatically lower. And racinos—hybrid venues combining horse tracks and casinos—might choose to abandon racing altogether in favor of more profitable ventures.
But then, something unexpected happened
Rather than displacing horse racing entirely, legalized sports betting appeared to accelerate digital transformation in the space. For many bettors—particularly older fans—legalized sports betting acted as a gateway to online wagering in general.
In a comment shared with Horse.bet, a spokesperson from AmWager said legalization had a surprising upside.
“The legalization of online sports betting helped popularize digital platforms. People who previously placed bets at kiosks or racetracks—especially the elder generation—are now placing bets online from home. They’re no longer afraid to use cards online or trust the process. It’s a positive impact.”
The shift reflects a broader consumer trend: older bettors are increasingly comfortable with smartphones, online payments, and mobile apps. What was once a paper ticket and a cash window is now a digital bet slip and an instant deposit.
Looking at the numbers
The clearest way to measure the impact is through total handle—the amount of money wagered on horse racing in the U.S. annually. Here’s how it’s changed in the years before and after legalization:
- 2017 (pre-legalization): $10.91 billion
- 2018: $11.26 billion
- 2020 (pandemic disruption): $10.93 billion
- 2022 (post-legalization peak): $12.13 billion
- 2023: $11.66 billion
- 2024: $11.27 billion
(Source: Equibase, BloodHorse)
While the figures fluctuate year-to-year, they do not show the freefall many feared. In fact, racing handle increased post-2018, peaking in 2022 before a modest decline in 2023 and 2024—likely influenced by race day reductions and broader economic headwinds.
Big events are booming
Nowhere is the impact more obvious than at marquee events. The 2024 Kentucky Derby saw $210.7 million bet on the race alone—a record high. The full Derby Day card brought in $320.5 million, according to The New York Post.
This marked a double-digit percentage increase from 2023 and is a sign that, at least for premium races, the appetite remains strong—especially with bettors now comfortable placing large wagers online in real-time.
A tale of two bettors
Today’s average horseplayer is different than a decade ago. In addition to the traditional racetrack regulars, a new group has emerged: digital-first bettors who might place a horse bet in between college basketball parlays or NFL same-game multis.
Platforms like TwinSpires, TVG, and even BetRivers have invested in better more user friendly app interfaces, loyalty programs, and live streaming to meet these expectations.
This dual-audience strategy is proving effective. The established, older generation is now increasingly betting from home. Meanwhile, younger bettors—more accustomed to apps like FanDuel and DraftKings—are experimenting with racing for the first time, especially during Triple Crown season.
Not without challenges
Despite the positives, there are hurdles ahead. Race day totals have steadily declined over the past decade. Many small to mid-size tracks face closures or financial strain. And the rise of fixed-odds betting in other sports creates added pressure on horse racing’s more complex pari-mutuel system.
Still, with states like New Jersey piloting fixed-odds horse racing and cross-promotions between sportsbooks and racing apps becoming more common, there’s reason to believe the industries can coexist—and even thrive together.
Bottom line
The legalization of sports betting didn’t destroy horse racing. Instead, it pushed it into the digital age. Online sports betting taught millions of Americans how to bet on their phones, how to fund digital wallets, and how to engage with odds and markets in real time.
For horse racing, that shift has brought both challenges and a fresh sense of relevance—especially for platforms like AmWager that have embraced the new normal.
As legal betting continues to evolve, the most successful racing operators will be those who innovate like sportsbooks, attract new users without alienating loyal fans, and continue delivering odds and good moments like the Kentucky Derby.
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