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At the intersection of bookmaking and insurance

The owner of Oaklawn Park was on the hook for half of the $5m bonus offered to any horse who could sweep the Rebel Stakes, the Arkansas Derby, and the Kentucky Derby. Having seen Smarty Jones win the first two with aplomb, Charles Cella was not about to risk $2.5m should the colt win the big one. So he called his bookie, ahem, insurance broker, and increased his coverage:

In October, half of the Oaklawn bonus was insured by Levin Insurance Services of Goshen, Ky. When Smarty Jones captured the Arkansas Derby by running the final one-eighth of a mile in 12.5 seconds, the Cella family started work on insuring the remaining $2.5 million.

..."We huddled up that Monday and called our broker and said, 'We've got to cover this horse because he's going to win this race,' " Lou Cella (Charles' son) said. "We closed the deal on Thursday before the Derby. It was last minute."

Why Thursday? That was after the post position draw, and the morning line of 9-2 had been set and evaluated by the betting market. Why not just bet in the parimutuel market at Churchill Downs, where private rooms are available for people of Mr. Cella's stature? Two reasons; first, to avoid reducing the odds by pouring half a million or so on Smarty in the parimutuel pool. Second, using the "broker" avoids the 15% takeout. Tracks and horsemen are currently agitating over rebate shops. The rebate shops kick back a significant percentage to high rollers who route their betting through them, avoiding the higher takeout in effect at the racetrack. I presume Mr. Cella will not be taking a lead role in the industry's efforts to derail the rebate shops.