When Tom Hessert attended the 2011 Preakness he left realizing the horse racing industry had failed to take advantage of a tremendous opportunity. In a country where people love to gamble and love to while away their time on the computer, racing represents the only legal means of betting on the Internet in the U.S. Yet, all racing has been able to come up with are traditional betting sites. They appeal primarily to existing horseplayers and not to the large slice of the public that wants quick, dumb-downed games of chance like slot machines.
"I went to Preakness a year-and-a-half ago and I really liked it, especially after I bet $5 on a horse and won $25," Hessert said. "When I left the Preakness, I realized there were over 50,000 races a year and it's legal to play these races on line. To me, this was amazing. We wanted to build an on-line game to introduce other players like us to racing?"
Hessert is 28, likes to gamble, enjoys social media, doesn't know the first thing about how to read the Daily Racing Form and, when it comes to betting, doesn't necessarily want to think too hard. At the Preakness, he struggled to understand the nuances of wagering and had trouble mastering the SAM machines.
But they are given no information about the horses other than their names and odds, which are presented as part of a colorful, eye-catching graphics package.
Hessert got together with two of his five brothers, 30-year-old Bill and 29-year-old Walter, found an investor and created DerbyJackpot.com, which is expected to go live early in January 2013. Like a Churchill Downs-owned game called Luckity.com, Derby Jackpot is hoping to strike it rich by making betting on horses on the Internet fun, convenient and extremely simple.
Derby Jackpot players wager on the outcomes of actual horse races. But they are given no information about the horses other than their names and odds, which are presented as part of a colorful, eye-catching graphics package. The bets aren't called win, place or show, but "The Monkey" and "The Granny." A Monkey is a win bet and a Granny is a show bet. The race is run, shown on the website and the winners collect the exact same amounts as if they had made traditional bets through an ADW website like Twinspires.com.
There are no past performances, no jockeys or trainers are listed. The player could be wagering on the Preakness or a $2,000 claimer from Podunk Downs. On Derby Jackpot, it's all the same.
"We didn't want anything about this to be intimidating, hardcore or intense," Walter Hessert. "It's really for social gamers and casual gamblers. We understand this won't have any appeal to people who are already into racing and like to study the form. This is for players who want to just have some fun and test their luck."
With so much live racing available around the world, there is plenty of product to bet on. On the busiest days, Derby Jackpot aims to offer a new race every six minutes.
The Hesserts don't seem overly concerned that powerful Churchill Downs has created a similar product with Luckity.com. They're not saying so, but perhaps they understand that Luckity.com is a lot less appealing because, for whatever reason, it does not allow its customers to watch the actual races.
The bigger problem for Derby Jackpot may be racing's exorbitant takeout structure. People like slot machines and other casino games because they are easy to play and simple to understand but also because the takeouts are low. Because about 8 or 9 cents out of every dollar played is lost on a slot machine, players have a reasonable expectation that they can sit in front of the machine for hours, entertain themselves and that their bankroll will last for a while.
When customers bet on Derby Jackpot or on any other ADW, they're wagering into the teeth of takeout rates in the neighborhood of 20 percent. That means that, except for the very, very lucky, players are going to blow their bankrolls quickly. There's nothing fun about losing money.
Players may also grow bored with having to wait six minutes between races. In that same amount of time you could play a slot machine 30 or 40 times.
But Derby Jackpot is on to something. The Internet has huge untapped potential when it comes to the U.S. gambling market and someone is going to figure out how to make a lot of money by offering people a game they can bet on. Maybe it will be they Hessert Brothers.
Bill Finley is an award-winning racing writer whose work has appeared in The New York Times, USA Today and Sports Illustrated. Contact him at email@example.com.