The dramatic effect of the parimutuel takeout...

[thaskalos]

How much of an effect does the win takeout have on the existing odds in a given race?

It usually takes something drastic to fully bring that out...and a fine example is shown in today's 5th race at Parx -- which has been reduced to a field of 3 after 4 scratches.

With 5 minutes to post, the respective odds are...1/1...1/1...and 5/2.

Tough game... :)

[ArlJim78]

did you bet the longshot?

[MightBeSosa]

better yet, whip out your excel and calc what happens to a $100 after applying 9 takeouts.

a miracle we're not all destitute.

[Dan Montilion]

Assume. Ten horse Field. All have equal chance. No Take-out. $20 pool.

1..$2
2..$2
3..$2
4..$2
5..$2
6..$2
7..$2
8..$2
9..$2
10.$2
--------
$20 Total Wagered all horses 9 to 1. Winner pays off @ $20

Assume same as above but with a 20% take. $20 pool Minus $4. Total to return is $16. So the above natural 9/1 shot pays at 7/1.

Thank the stars not all have same chance and they are not all bet accordingly.

[cj]

...and this doesn't even touch another part of takeout, breakage.

[porchy44]

Anyone ever calculate the percentage breakage adds to the takeout?

[vegasone]

Yes :p

[cj]

Anyone ever calculate the percentage breakage adds to the takeout?

In the win pool, at most tracks (not those with nickel breakage), breakage should cost on average about 9.5 cents per $2 bet cashed. How much it costs each person would vary by success rate.

[Stillriledup]

A Superfecta that is supposed to pay 69.99 pays 69.80 and the person who has it for a dime, gets 6.98.

Breakage was instituted long ago so that people wouldnt hold up betting lines cashing for bets that paid off in 1 cent increments.

Since many people have ADWs and bet from home, this doesnt apply to them...yet, they are still taxed that breakage.

And we all wonder why people are writing letters to beg fans to tell other fans about this "Great" sport.

[therussmeister]

...and this doesn't even touch another part of takeout, breakage.
And this still doesn't touch the third part of takeout, the impact of winning players.

Someone with a database can calculate the combination of all the takeout by determining the ROI of randomly selected flat bets, or alternatively, flat bets on every horse (or exotic combination) in every race.

[lamboguy]

in Canada and NYRA, they pay the dime, so you pay about half as much breakage. the breakage money goes to the ADW or track where you make the bet. the breakage is the silent killer in this game. that is why some ADW's will give you a higher rebate just to earn the breakage.

[cj]

And this still doesn't touch the third part of takeout, the impact of winning players.

Someone with a database can calculate the combination of all the takeout by determining the ROI of randomly selected flat bets, or alternatively, flat bets on every horse (or exotic combination) in every race.

I don't consider a winning player part of the takeout. That is just the nature of the sport in my opinion. Some people will win more than others as long as there is skill involved.

[cj]

in Canada and NYRA, they pay the dime, so you pay about half as much breakage. the breakage money goes to the ADW or track where you make the bet. the breakage is the silent killer in this game. that is why some ADW's will give you a higher rebate just to earn the breakage.

Takeout is a much bigger factor than breakage. Reduce the takeout by 5% or eliminate breakage, which is better? Is isn't even remotely close to which would be better.

[therussmeister]

I don't consider a winning player part of the takeout. That is just the nature of the sport in my opinion. Some people will win more than others as long as there is skill involved.

While it is technically not part of the takeout, it affects the bettor like the takeout, which is why, though I've never said anything on these forums, I think it is short sighted for bettors to steer clear of certain tracks solely due to their listed takeout rates (except as a protest). The effect of winning players on ROI can render differences in the listed takeout rates moot, particularly if winning bettors strongly favor the tracks with a lower takeout.

[lamboguy]

Takeout is a much bigger factor than breakage. Reduce the takeout by 5% or eliminate breakage, which is better? Is isn't even remotely close to which would be better.i agree, but for rebate players higher takeout is the same as lower takeout and often times better depending what the signal fee's are.

[LottaKash]

I don't consider a winning player part of the takeout. That is just the nature of the sport in my opinion. Some people will win more than others as long as there is skill involved.

I agree, if a "winning player" is getting his price/value, the takeout is irrelevant...No ?...

[JustRalph]

Great thread :ThmbUp:

[MJC922]

Unfortunately, whether or not we can obtain an acceptable price on our horses as well as how often that occurs is directly impacted by how large the take is. If for example they raise the take to 50%, yeah once in a very great while I'll still find an overlay but it'll become an extremely rare happening and the game would suddenly become a waste of time with respect to putting forth the necessary effort it takes to set probabilities.

As it stands right now, with a take of 18%, for a horse the crowd sets a true probability of 31% the 18% take cuts that all the way down to an 8/5 shot on the board. Now if I make this horse even money on my line, that's quite a stark contrast with the 31% collective opinion of the crowd, and that for me (8/5) would be the bare minimum odds I would be willing to accept on such a horse.

Furthermore if I want to estimate long term ROI on such high-percentage overlay plays, assuming both my probability and the crowd's probability as being close to equally accurate in the long term, the 'true' probability for such horses will be expected to settle right around 40%. This is a +4% ROI. Every pool, every type of wager is impacted like this with the exception of low percentage plays e.g. like a pick-six with large carryover etc. So there really is no hiding from this huge take. And I would suggest not buying into the 'spread over a series of races nonsense' either, this horizontal exotic kool aid isn't going to save anyone anymore than the lottery is.

[Track Collector]

I agree, if a "winning player" is getting his price/value, the takeout is irrelevant...No ?...

Takeout is relevant to everyone. Every time anyone has a winning ticket, it would return more money if the takeout were lower.

(This does not mean that all players "favor" lower takeout, but that has already been discussed in other threads.). :)

[Track Collector]

Anyone ever calculate the percentage breakage adds to the takeout?

Breakage of course varies by the size of the payout, and whether a track breaks to the nearest dime (most do) or to the nearest nickel.

Using the worst case (dime breakage), some average breakage percents would be:

Ticket pays $2.40 --> Average breakage is $0.10/$2.40 = 4.2%
Ticket pays $4.00 --> Average breakage is $0.10/$4.00 = 2.5%
Ticket pays $10.00 --> Average breakage is $0.10/$10.00 = 1.0%
Ticket pays $30.00 --> Average breakage is $0.10/$30.00 = 0.3%

From my database looking at 2012, I have 48876 races.
The average win payout is $11.76. Therefore the average breakage would be $0.10/$11.76 = 0.85% (or less than 1%).
The average place payout is $5.91, which gives an average breakage of $0.10/$5.91 = 1.7%
The average show payout is $4.03, which gives an average breakage of $0.10/$4.03 = 2.5% Tracks LOVE show wagers as long as they do not result in "minus" pools.

[iceknight]

A Superfecta that is supposed to pay 69.99 pays 69.80 and the person who has it for a dime, gets 6.98.

Breakage was instituted long ago so that people wouldnt hold up betting lines cashing for bets that paid off in 1 cent increments.

Since many people have ADWs and bet from home, this doesnt apply to them...yet, they are still taxed that breakage.

And we all wonder why people are writing letters to beg fans to tell other fans about this "Great" sport. And even at most tracks now people bet on vouchers or track cards (like prepaid cards?) and then encash winnings (if any) at a later time in the day. So breakage is something that totally needs to go.

[Stillriledup]

And even at most tracks now people bet on vouchers or track cards (like prepaid cards?) and then encash winnings (if any) at a later time in the day. So breakage is something that totally needs to go.

Or, what they can do is have 'exact change' windows where people arent allowed to cash tickets that don't end in a zero.

I think in the old days when tracks said that the reason there is breakage is because they don't want to hold up betting lines was just BS, what they really MEANT was "its just more money for us and we're keeping it and there's nothing you can do about it"

Its amazing to me how these tracks can get away legally without paying the price the horse is really supposed to pay.

Could you imagine Macy's saying to a customer "i understand that this item costs 6 dollars and 95 cents, but i'm going to charge you 7 dollars even, just so you don't hold up the lines digging for loose change"?

[AndyC]

Let's take, for illustration purposes, a track with a 20% stated take-out rate on win bets. If a horse has 40% of the win pool bet on it it would be going off at odds of 1 to 1. If the 1 to 1 horse wins the effective take-out rate is nowhere near 20%! It is actually 33%! That is because the total take-out is computed on the entire pool whereas the actual take-out is only taken from the total of losing bets. In the case of the 1 to 1 horse 20% of the entire pool is equal to 1/3 of the losing bets. Consider that had there been no take-out a winning ticket would have won you $3 for every $2 bet whereas with take-out you would only make $2. To go from winning $3 to winning $2 is a 33% haircut and not just a 20% trim.

You don't even want to see the calculations for place and show.

To answer the people who claim that the takeout is of little concern when you have an overlay that is partly true but overlays become increasingly harder to find as the takeout rises.

[MightBeSosa]

did anyone else's head explode after reading that last one twice?

[davew]

in Canada and NYRA, they pay the dime, so you pay about half as much breakage. the breakage money goes to the ADW or track where you make the bet. the breakage is the silent killer in this game. that is why some ADW's will give you a higher rebate just to earn the breakage.

I am not sure that is completely correct for NYRA. I remember reading a book about (by?) Steven Crist, that he was on some sort of commission or committee and pushed for lower breakage for NYRA. To get lower breakage in straight pools, they had to raise it in exotics ( or higher pay-offs) so that the total track income from breakage stayed the same.

[therussmeister]

I am not sure that is completely correct for NYRA. I remember reading a book about (by?) Steven Crist, that he was on some sort of commission or committee and pushed for lower breakage for NYRA. To get lower breakage in straight pools, they had to raise it in exotics ( or higher pay-offs) so that the total track income from breakage stayed the same.
From NYRA website:

BREAKAGE

$2.10 to 9.99 payoff, break to 10 cents; $10 to 49.99 payoff, break to 20 cents; $50 to 499.99 payoff, break to 50 cents; $500 and up, break to $1.00.

[OCF]

Which is a better deal for the WPS bettor: NYRA with 16% takeout and nickel breakage or CA with 15.43% takeout and dime breakage?

[acorn54]

I agree, if a "winning player" is getting his price/value, the takeout is irrelevant...No ?...


you might be right but the higher the take out the fewer opportunities for a "winning player" to get his price/value
money in today's parimutuel pools is far more intelligent than even three years ago and getting smarter as we speak.
years ago alot of people bet significant amounts of money on silly systems, with no validation, and the tracks brought large crowds of people together into a party atomosphere of having fun with money. times have changed.

[Quesmark]

Lets get up to speed,a winning solution ="decimal pricing".
Breakage is a vestige of the analogue past,in the digital age there's no place for it,show us the real money...

[mountainman]

That is because the total take-out is computed on the entire pool whereas the actual take-out is only taken from the total of losing bets.

True, but somewhat misleading. Just because losing wagers are forfeit doesn't mean those who placed them didn't suffer the brunt of usurious take out rates.

Look at it like this: With a win rake of 17%, a person placing a minimum wager has knowingly paid 2 bucks for something worth just $1.66. Now take it a step further and imagine how much more a devoted win player would have in his pocket at the end of , for instance, 5 years, had he paid just true value-$1.66-for each of his tickets. Examined from that perspective, it's apparent that while winners more accutely feel takeout, that is only because such a high percentage of losing expenditures go toward paying the skim-rather than paying the winners. So it's STILL the losers who really pay the freight.

[mountainman]

True, but somewhat misleading. Just because losing wagers are forfeit doesn't mean those who placed them didn't suffer the brunt of usurious take out rates.

Look at it like this: With a win rake of 17%, a person placing a minimum wager has knowingly paid 2 bucks for something worth just $1.66. Now take it a step further and imagine how much more a devoted win player would have in his pocket at the end of , for instance, 5 years, had he paid just true value-$1.66-for each of his tickets. Examined from that perspective, it's apparent that while winners more accutely feel takeout, that is only because such a high percentage of losing expenditures go toward paying the skim-rather than paying the winners. So it's STILL the losers who really pay the freight.

*acutely

[AndyC]

True, but somewhat misleading. Just because losing wagers are forfeit doesn't mean those who placed them didn't suffer the brunt of usurious take out rates.

Look at it like this: With a win rake of 17%, a person placing a minimum wager has knowingly paid 2 bucks for something worth just $1.66. Now take it a step further and imagine how much more a devoted win player would have in his pocket at the end of , for instance, 5 years, had he paid just true value-$1.66-for each of his tickets. Examined from that perspective, it's apparent that while winners more accutely feel takeout, that is only because such a high percentage of losing expenditures go toward paying the skim-rather than paying the winners. So it's STILL the losers who really pay the freight.

Takeout only affects the winners share. If a bettor bets $100 and loses, it doesn't matter what the rate is he/she still loses $100. It's the winners share that always takes the hit.

[thaskalos]

Takeout only affects the winners share. If a bettor bets $100 and loses, it doesn't matter what the rate is he/she still loses $100. It's the winners share that always takes the hit.
I disagree with you, and I agree with Mountainman.

The takeout is collected BEFORE the winners and the losers are determined...which means that we are ALL contesting a mutuel pool that is a lot smaller than it would otherwise be.

So, the takeout affects us all.

[TexasDolly]

Sports betting is the same way,the winners pay all the vig. The higher the win% ,the higher the vig. A 50w-50L season costs about 4.55 in vig . A
100W-0L cost a little over 9 %.
TD

[thaskalos]

Sports betting is the same way,the winners pay all the vig. The higher the win% ,the higher the vig. A 50w-50L season costs about 4.55 in vig . A
100W-0L cost a little over 9 %.
TD
Don't the losers bet $110 to win $100 in football wagering?

Do they get the $10 vig returned to them because they lost?

[MightBeSosa]

It's really a matter of semantics, but in effect, the winners pay the takeout, the losers don't matter.

The only 'payment' the losers have made, is the money they MIGHT have won is lower.

Take an extreme (or maybe not, there may be some of you in the crowd) case of someone that never cashes.

Their result is exactly the same no matter what the takeout. ZERO.

Since most of us get lucky from time to time, we all take at least some turns paying the actual vig.

[OCF]

Say my WPS ROI is -13%. I would wish the takeout were zero to 12%, not 14, 15, 16, 17%, etc.

[riskman]

The takeout is deducted before the payoff odds are calculated. The pool is shared among all winning bets. In the case of the losers their bet is lost, but still contributed to the track take.

[cj]

Since most of us get lucky from time to time, we all take at least some turns paying the actual vig.

This is exactly right, we all pay. On any one race, yes ,the winners pay, but unless you only play one race, or always cash, or never cash, everyone pays a share.

[OCF]

As a practical matter the first ... aw hell, I'm even boring myself

[AndyC]

The takeout is deducted before the payoff odds are calculated. The pool is shared among all winning bets. In the case of the losers their bet is lost, but still contributed to the track take.

Of course everybody contributes to it but it only affects the winner. To say that the track take affects the loser is absurd. The loss is 100% and won't change regardless of the track take. The winner's share will ALWAYS be affected by the track take.

[AndyC]

I disagree with you, and I agree with Mountainman.

The takeout is collected BEFORE the winners and the losers are determined...which means that we are ALL contesting a mutuel pool that is a lot smaller than it would otherwise be.

So, the takeout affects us all.

OK, surely if you disagree you could take ten $100 losing bets and show me how a different take percentage affects the outcome of each bet?

I can surely show you how different take percentages can affect ten $100 winning bets.

I define "affect" as being a change in outcome.

[mountainman]

OK, surely if you disagree you could take ten $100 losing bets and show me how a different take percentage affects the outcome of each bet?




The answer is simple: Assuming a 17% take-out, each of those c-notes was spent on an item worth exactly $83. And The winners are thus underpaid BECAUSE the losers were taxed. If losing tickets were sold at correct value, your imaginary $100 wagers would have cost just 83 bucks apiece- with the SAME potential winnings.. Get it? Still think losers don't feel the sting??????

[thaskalos]

OK, surely if you disagree you could take ten $100 losing bets and show me how a different take percentage affects the outcome of each bet?

I can surely show you how different take percentages can affect ten $100 winning bets.

I define "affect" as being a change in outcome.
In order to prove your point, you are looking at things from the bet-to-bet perspective.

Look at it from a long-term perspective, and you will see that we are all "winners" on occassion...so we all pay.

This "winners only pay" point of view is the one promoted by the racing industry...and the main reason why the takeouts on the exotic wagers have reached the levels that we see today.

As more compicated exotic wagers were introduced, and as their respective payoffs got higher and higher due to the increased complexity of the bet...the industry figured that the "winners" who would be cashing these tickets would not notice that a few more dollars were continually taken off the top.

The industry would like it if we looked at things from the individual bet perspective, instead of looking at the long-term effect of this type of takeout.

It's a lot less discouraging when you look at it from the narrow point of view.

[imofe]

Don't the losers bet $110 to win $100 in football wagering?

Do they get the $10 vig returned to them because they lost?

Ok

Two guys bet 100 games in the NFL all for $110 to win $100. The first guy goes 60 and 40 and the second guy goes 40-60.

At the end of the year the first guy should have $600 more in his pocket. The sixty times he got back $210 instead of $220. The second guy should have $400 more in his pocket. The forty times he got back $210 instead of $220.

They both will pay because they won at one time or another, but the person who wins more, pays more.

[thaskalos]

Ok

Two guys bet 100 games in the NFL all for $110 to win $100. The first guy goes 60 and 40 and the second guy goes 40-60.

At the end of the year the first guy should have $600 more in his pocket. The sixty times he got back $210 instead of $220. The second guy should have $400 more in his pocket. The forty times he got back $210 instead of $220.

They both will pay because they won at one time or another, but the person who wins more, pays more.
You are wrong.

In your example, the guy who LOSES more pays more because of vig.

The guy who went 60-40 would have won $2,000 without a vig ($6,000 - $4,000). With the vig, he wins $1,600 ($6,000 - $4,400)...so the vig costs him $400 additional.

The guy who went 40-60 would have lost $2,000 without the vig ($4,000 - $6,000). But with the vig, he loses $2,600 ($4,000 - $6,600)...so the vig costs him $600 additional.

The winner loses $400 to the vig...whereas the loser loses $600.

[Stillriledup]

If a person goes into a Rare coin store and purchases a rare coin for 100 dollars that has a book value of 83 dollars and then they walk out of the store, at the moment they walk out of the store, the store owner made a 17 dollar profit from the customer. Store owner plus 17, customer -17. Now, if the customer, while admiring the shiny new coin, accidentally drops it into a storm drain and it gets washed out to sea, he turns the 17 dollar loss into a 100 dollar loss. Now, his 17 dollar loss was just temporary, it was kind of just a temporary state of action as the end result was that he lost 100 dollars.

I'm not sure if this analogy makes the case for the Mark/Thas team, or the Andy C team, but i think that in the end, it doesnt really matter all that much to the person who lost the 83 dollar coin that he paid 100 dollars for, he's not going to write "minus 17" and then "minus 83 more" in his ledger, he's going to write -100.

And, that's why the takeout rates are too high.

The end. ;)

[AndyC]

In order to prove your point, you are looking at things from the bet-to-bet perspective.

Look at it from a long-term perspective, and you will see that we are all "winners" on occassion...so we all pay.

This "winners only pay" point of view is the one promoted by the racing industry...and the main reason why the takeouts on the exotic wagers have reached the levels that we see today.

As more compicated exotic wagers were introduced, and as their respective payoffs got higher and higher due to the increased complexity of the bet...the industry figured that the "winners" who would be cashing these tickets would not notice that a few more dollars were continually taken off the top.

The industry would like it if we looked at things from the individual bet perspective, instead of looking at the long-term effect of this type of takeout.

It's a lot less discouraging when you look at it from the narrow point of view.

Of course I am looking at it from a bet-to-bet perspective. Yes the winner of the bet pays.

From a long-term perspective a player will pay ONLY when he/she has a winning ticket.

I have never seen the "winners only pay" point of view promoted by the racing industry. Exotic take-outs are higher because people generally don't complain about the take-out rate when they cash $800 trifecta tickets. The euphoria of the score numbs their senses.

[AndyC]

The answer is simple: Assuming a 17% take-out, each of those c-notes was spent on an item worth exactly $83. And The winners are thus underpaid BECAUSE the losers were taxed. If losing tickets were sold at correct value, your imaginary $100 wagers would have cost just 83 bucks apiece- with the SAME potential winnings.. Get it? Still think losers don't feel the sting??????


You didn't answer my question. Show me how the outcome for 10 losing $100 bets is affected by the take-out rate. It makes no difference what the bet was "worth", that is irrelevant. And yes losers feel the sting, they are losing $100 for each bet and they would still lose $100 even if the take-out was 0% or 50%.

[imofe]

You are wrong.

In your example, the guy who LOSES more pays more because of vig.

The guy who went 60-40 would have won $2,000 without a vig ($6,000 - $4,000). With the vig, he wins $1,600 ($6,000 - $4,400)...so the vig costs him $400 additional.

The guy who went 40-60 would have lost $2,000 without the vig ($4,000 - $6,000). But with the vig, he loses $2,600 ($4,000 - $6,600)...so the vig costs him $600 additional.

The winner loses $400 to the vig...whereas the loser loses $600.

Remember that the bet is for $110, not $100.

The first guy should have won $2200 ($6600-$4400). He is short $600 after the vig.

The second guy should have lost $2200 ($4400-$6600). After paying $2600 he is only short $400.

The same can be applied to horse racing. We each bet $2 on each race of a ten race card. You only hit a 7-1 that should have been 9-1. At the end of the day you get back $16 instead of $20. I only hit a 3-1 that should have been 4-1. I get back $8 instead of $10. The player that did better lost more money to the vig.

[bob60566]

Here is something on the same lines, In the U.K when you place bet with a bookmaker you have to pay tax on the bet.Now you have option pay no tax on your original bet and then pay tax on your total winnings. So pay tax on your original wager then no tax on your winnings.

Which way to bet?? :)

[Phantombridgejumpe]

Three reasons why takeouts are high:

1) Some bettors have no idea what the take % is (Just try asking 100 people who just made a win bet what the takeout % was, I'd be shocked if more than 8-10 know).

2) Some bettors don't care. This group is out to have a good time or to gamble for one day, and the difference between a 15% and 20% takeout is the last worry on their brain.

3) The people that do know and do care, for the most part, don't stop playing. I probably fit into this group. I have an idea what the takeout is on each bet I make, and I'd like it to be lower, but I'm too lazy to protest or stop playing. Sure if a win bet takeout went to 30% I wouldn't play, but at 20%? I can't claim I would stop trying to beat it.

What people care about and what they should care about are often two different things. I care more about parking and good televisions at the OTB, probably silly.

[Cholly]

4) Those who are betting big money, after you consider their rebate, don't have all that high of a takeout.

[Stillriledup]

4) Those who are betting big money, after you consider their rebate, don't have all that high of a takeout.

Its still higher than what NFL bettors pay.

[acorn54]

for me personally, i bet larger amounts of money when the pinnacle betting site was legal in this country and i got a 7% rebate, simply because i was showing a profit, so the more i bet the more i profited.
without that 7% rebate i lose money, so i cut my losses by betting less, being more picky about the races i will bet.
basically what the variance in take-out rates represents, is what the economists call elasticity, that it encourages-discourages consumption.

[Robert Fischer]

5) The takeout is not optimized.


With a business like this, it makes sense to hire some consultants (actuaries) who can determine an "optimum" take out rate that will promote maximum churn.

Although it seems like something a business like this would obviously undertake, these type of things are a little more advanced than the level of executive operations in this business. It goes along the same general issues that come up with lack of capitalizing on the media. On the bright side these untapped areas mean there is a possibility for growth when they do get around to it.

[formula_2002]

"Aqueduct
Race
4

Post
2:23

MTP
1

$1 Exacta Pool
$73,551 "
pgno odds % pool %pool diff
2 2.25 0.31 0.22 0.09
6 6.00 0.14 0.12 0.02
3 6.60 0.13 0.12 0.01
5 4.00 0.20 0.17 0.03
1 8.00 0.11 0.11 0.01
7 2.25 0.31 0.26 0.05
1.20 1.00
0.83
for example: aqu has a 15% win pool takeout
based on the final odds (col 2) the sum of 1/(odds+1), % pool,(col3) =1.20 which equates to a 83 cent return on the dollar. It should be 85 cents, a 2.4% difference.
At 1 minuet to post, the # 2 winner had 22% of the win pool (col4). It closed at 31% of the pool. Thats not a good thing. If you like the #2 you want to see his pool % decrease, giving you more of a return for your bet.

so you are not just "fighting" the takeout and breakage, you also are subject to the closing odds, which you can see on the tote board when the horses are nearing the 1/4 pole :)

[MightBeSosa]

http://imageshack.us/a/img28/129/blackcav.jpg

These are the Betfair odds on the Black Caviar race tonight. She's 1/5

Look at the rest. Does that look like anything you've ever seen here with a 1/5 in the race? The ravages of the takeout.

http://imageshack.us/f/28/blackcav.jpg/

[Twenty Seven]

Important additional notes, MightBeSosa:

Those prices are set when you take them (or when another bettor takes your offer). No need to worry about odds drops a minute later, including after the off.

You can set up your own odds parameters, and bet a horse or horses if and when they go above the minimum odds limits (a not infrequent occurence).

You can lay (bet against) that prohibitive odds-on if you choose, thereby bypassing the need to ferret out the rest of the field.

You can trade out the position, locking in a profit no matter the result (takes skill and experience, and at times luck, of course).

No breakage.

Less than 5% takeout. (Down to 2%, but most often between 4%-5%).

--------------------

15%-20% parimutuel takeout used to be difficult but, at times, workable in the good ole days when the markets were much more inefficient. Now? I only play into them when I'm looking for a big score in certain exotics situations. I honestly don't know how anybody can make even decent coin from betting into today's win pools (without rebates) at host tracks.

[MightBeSosa]

A good player can still make money , even win betting, by being extremely patient and selective (same thing really).

Of course, they would make a lot more, and have 10X the opportunities , with a respectable takeout.

[Valuist]

It's really a matter of semantics, but in effect, the winners pay the takeout, the losers don't matter.

The only 'payment' the losers have made, is the money they MIGHT have won is lower.

Take an extreme (or maybe not, there may be some of you in the crowd) case of someone that never cashes.

Their result is exactly the same no matter what the takeout. ZERO.

Since most of us get lucky from time to time, we all take at least some turns paying the actual vig.

Everyone pays. Every time you wager you are anticipating a possible return, which is effected by the takeout.

[MightBeSosa]

Everyone pays. Every time you wager you are anticipating a possible return, which is effected by the takeout.

That isnt the same as paying. You bet $2 on a loser, you're going to lose the $2, no more , no less, regardless of the takeout. Is that so hard to comprehend?

[Valuist]

That isnt the same as paying. You bet $2 on a loser, you're going to lose the $2, no more , no less, regardless of the takeout. Is that so hard to comprehend?

Unless you are playing only one race in your lifetime, we are all playing for the long term. Even the worst players are going to occasionally cash tickets.

[MightBeSosa]

Of course thats true. It might be fairest to say, everyone pays, and the winners pay more.

[AndyC]

Everyone pays. Every time you wager you are anticipating a possible return, which is effected by the takeout.

The correct answer is the winner pays.

If a person went to the track one time in their life and lost every bet would they be paying?

I am anticipating making $1,000,000 in the stock market this year. If that doesn't happen am I still paying tax on that income?

To make an argument that everybody pays because you eventually win only supports an argument that winners pay.

[senortout]

the impossible scenario:

player A never loses a race

Player B never wins a race

in this situation, Player A has lost 0 dollars, 0 cents

and so, it becomes

Player B....who loses the lot

[pondman]

How much of an effect does the win takeout have on the existing odds in a given race?

It usually takes something drastic to fully bring that out...and a fine example is shown in today's 5th race at Parx -- which has been reduced to a field of 3 after 4 scratches.

With 5 minutes to post, the respective odds are...1/1...1/1...and 5/2.

Tough game... :)

The people hit hardest are the small players-- the .10 exotic people. The industry doesn't understand that to keep it's patronage at least consistent, it's got to offer something to attract the small player. Casinos do it with free soft drinks and coffee, sometimes free booze. When is the last time a small player has visited a track, otb, or online site, and felt they were being accommodated. They've got to gouge every penny out of them, a perfect example of dogs trying to eat dogs.

[OCF]

the impossible scenario:

player A never loses a race

Player B never wins a race

in this situation, Player A has lost 0 dollars, 0 cents

and so, it becomes

Player B....who loses the lot

Winning Player A has less money because of takeout.

Losing Player B has the same amount of money, takeout or no takeout.

Maybe that's your point?

[pondman]

A good player can still make money , even win betting, by being extremely patient and selective (same thing really).

Of course, they would make a lot more, and have 10X the opportunities , with a respectable takeout.

I often wonder why people who routinely play doubles or pick 3s at large tracks, with large pools, don't parlay their money on seperate win tickets and save themselves about 6% on the takeout. Frequently the parlay at 15% will outperform the double and the pick 3 at 21%. Especially at tracks with heavy favorites and the majority of players being exotic people. There must be a negative psychological factor to this, because the actual wager is the same.

This is why I stopped playing horizontally. A hundred bucks on the nose will often outperforms (at least overtime) the exacta or tri when considering the additional 6% takeout on the exacta or tri.

[MightBeSosa]

The correct answer is the winner pays.

If a person went to the track one time in their life and lost every bet would they be paying?

I am anticipating making $1,000,000 in the stock market this year. If that doesn't happen am I still paying tax on that income?

To make an argument that everybody pays because you eventually win only supports an argument that winners pay.

I was being realistic. Even a blind squirrel cashes once in a while, thus, they pay some takeout. So everyone pays something , sometime (apologies to Dean Martin)

[AndyC]

I often wonder why people who routinely play doubles or pick 3s at large tracks, with large pools, don't parlay their money on seperate win tickets and save themselves about 6% on the takeout. Frequently the parlay at 15% will outperform the double and the pick 3 at 21%. Especially at tracks with heavy favorites and the majority of players being exotic people. There must be a negative psychological factor to this, because the actual wager is the same.

This is why I stopped playing horizontally. A hundred bucks on the nose will often outperforms (at least overtime) the exacta or tri when considering the additional 6% takeout on the exacta or tri.


The reason to bet exotics is leverage. If I have a good overlay I want to increase that advantage with leverage.

[Twenty Seven]

I often wonder why people who routinely play doubles or pick 3s at large tracks, with large pools, don't parlay their money on seperate win tickets and save themselves about 6% on the takeout. Frequently the parlay at 15% will outperform the double and the pick 3 at 21%. Especially at tracks with heavy favorites and the majority of players being exotic people. There must be a negative psychological factor to this, because the actual wager is the same.

This is why I stopped playing horizontally. A hundred bucks on the nose will often outperforms (at least overtime) the exacta or tri when considering the additional 6% takeout on the exacta or tri.



First off, the takeout on a horizontal wager is only charged once. For example, in a P4, you're paying that 25% one time, whereas in the same four race sequence in a win parlay, you're paying the (approximately) 17% four times. That's a dramatic difference.

Here're the parlay prices, rounded down to the nearest dollar, and for a $1 cost, of each three-race sequence the past two race days at Tampa, followed by the pick 3 payout on the same sequence (takeout on the pick 3 at Tam is about 18%):

$27 - $86

$96 - $344

$125 - $313

$28 - $36

$48 - $118

$77 - $204

$17 - $26

$20 - $36

$8 - $26

$18 - $44

$50 - $92

$200 - $378

$79 - $143


It's often not as wide a gap at many tracks because the horizontal takeouts at Tampa are lower than at most of them, but the trend is the same. And if you get even one bomber in any sequence, the discrepancy is often increased no matter where you play.

[Dark Horse]

Santa Anita takeout is 15.43%. But the odds for the races add up to 121-122% (from 135% ML totals). Is the difference all breakage? Adding another 6% is the equivalent of throwing in a 15-1 horse, with no payout, in each and every race. Crazy. I only bet when I can toss out enough horses to turn the negative playing field into a positive one, so for me it translates into fewer bets and less action for the track. That could hardly be the intent. I'm all in favor of slot machines and higher purses, but pass it on to the bettor as well.


(Obviously, the whole presentation at the track is geared towards misleading people so that they will bet more. You remember your first winner? How much did it pay? $8.60? Nice! I bet you didn't know then that you had to subtract 2 and divide by 2. The real payout was $3.30, but that doesn't quite have the same ring.)

[thaskalos]

Santa Anita takeout is 15.43%. But the odds for the races add up to 121-122% (from 135% ML totals). Is the difference all breakage? Adding another 6% is the equivalent of throwing in a 15-1 horse, with no payout, in each and every race. Crazy. I only bet when I can toss out enough horses to turn the negative playing field into a positive one, so for me it translates into fewer bets and less action for the track. That could hardly be the intent. I'm all in favor of slot machines and higher purses, but pass it on to the bettor as well.


(Obviously, the whole presentation at the track is geared towards misleading people so that they will bet more. You remember your first winner? How much did it pay? $8.60? Nice! I bet you didn't know then that you had to subtract 2 and divide by 2. The real payout was $3.30, but that doesn't quite have the same ring.)

All true. :ThmbUp:

[cj]

Santa Anita takeout is 15.43%. But the odds for the races add up to 121-122% (from 135% ML totals). Is the difference all breakage? Adding another 6% is the equivalent of throwing in a 15-1 horse, with no payout, in each and every race. Crazy. I only bet when I can toss out enough horses to turn the negative playing field into a positive one, so for me it translates into fewer bets and less action for the track. That could hardly be the intent. I'm all in favor of slot machines and higher purses, but pass it on to the bettor as well.


(Obviously, the whole presentation at the track is geared towards misleading people so that they will bet more. You remember your first winner? How much did it pay? $8.60? Nice! I bet you didn't know then that you had to subtract 2 and divide by 2. The real payout was $3.30, but that doesn't quite have the same ring.)

Breakage elimination would be such a great place to start. I'm not holding my breath though. All tracks should be required to report breakage as part of takeout.

However, the reason it looks so high is because calculating the percentages the way you are doing it applies breakage to every entry. But it is only actually implemented once. The effect of breakage is much less than 6%.

[AndyC]

Breakage elimination would be such a great place to start. I'm not holding my breath though. All tracks should be required to report breakage as part of takeout.

However, the reason it looks so high is because calculating the percentages the way you are doing it applies breakage to every entry. But it is only actually implemented once. The effect of breakage is much less than 6%.

When you use the effective take-out rate which is always higher than the stated rate then the higher number is more in-line.

Using a hypothetical 20% take for win bets, a horse with 40% of the total pool would be 1-1 on the tote but would be 3/2 with no take-out. The take from your winnings would be 33% and not the stated 20%. $3 winnings versus $2 winnings.

[cj]

When you use the effective take-out rate which is always higher than the stated rate then the higher number is more in-line.

Using a hypothetical 20% take for win bets, a horse with 40% of the total pool would be 1-1 on the tote but would be 3/2 with no take-out. The take from your winnings would be 33% and not the stated 20%. $3 winnings versus $2 winnings.

Which in no way changes the fact that breakage in no way adds 6% to the takeout, which was the implication.

[AndyC]

Which in no way changes the fact that breakage in no way adds 6% to the takeout, which was the implication.

On shorter priced horses breakage can add 3-4 %. On place and show its much higher.

When someone mentioned that the percentages added up to over 120% it was because breakage was reflected in the odds of every horse whereas the actual breakage will just happen on one horse.

[RXB]

Yes, dime breakage is a massive hit for anyone who tries to make a profit via highly probable outcomes with small odds. Nickel breakage here in Canada would be bad enough. And there's absolutely no legitimate reason for the practice of breakage to continue, and the fact that it does continue is just another example of how out of touch the racing industry and its regulators are.

[RXB]

Here's an idea:

Allow penny breakage. I think people could live with a $2.39.9 payout per $2 wager being rounded down to $2.38. Sure better than $2.30, way better than $2.20. But any proceeds from the breakage would be donated to a thoroughbred retirement fund, not kept by the track. Seems like a fair way to do things.

[cj]

When someone mentioned that the percentages added up to over 120% it was because breakage was reflected in the odds of every horse whereas the actual breakage will just happen on one horse.

Isn't that what I said?

[AndyC]

Isn't that what I said?

In deed you did. Sorry I missed it. I answered your remark out of context.

[Dark Horse]

Breakage elimination would be such a great place to start. I'm not holding my breath though. All tracks should be required to report breakage as part of takeout.

However, the reason it looks so high is because calculating the percentages the way you are doing it applies breakage to every entry. But it is only actually implemented once. The effect of breakage is much less than 6%.

Is there another way to calculate percentages? I'm doing the basic 1/1 = 50%, 3/1 = 25% and so on. The total percentage is 5-6% higher than what the takeout would suggest. Example: 120.66, 122.00, 120.13 where the takeout is 15.43%.

[cj]

Is there another way to calculate percentages? I'm doing the basic 1/1 = 50%, 3/1 = 25% and so on. The total percentage is 5-6% higher than what the takeout would suggest. Example: 120.66, 122.00, 120.13 where the takeout is 15.43%.

No, you have it right. But, every horse is calculated to include breakage IF it wins (or comes in whatever pool we are talking). However, only one of those horses (or combos), the winning one, will have breakage applied.

So, for example, the odds of two horses might be listed as this:

3.10 (24.39%)
3.00 (25.00%)

Total 49.39%

But, in reality, the odds are:

3.19 (23.87%)
3.19 (23.87%)

Total 47.73%

Basically, you are adding in "extra" percentage points for every horse, but only one of them can actually win.

[Dark Horse]

No, you have it right. But, every horse is calculated to include breakage IF it wins (or comes in whatever pool we are talking). However, only one of those horses (or combos), the winning one, will have breakage applied.

So, for example, the odds of two horses might be listed as this:

3.10 (24.39%)
3.00 (25.00%)

Total 49.39%

But, in reality, the odds are:

3.19 (23.87%)
3.19 (23.87%)

Total 47.73%

Basically, you are adding in "extra" percentage points for every horse, but only one of them can actually win.

So the difference between the total odds for the field (say 120%) and the payout (100%) is not the exact number of what the track takes in?

How would you adjust it mathematically? With a number fluctuating between 120 and 122%, would you lean towards subtracting a standard figure (for the purpose of identifying the point where a negative playing field turns positive)?

[thespaah]

That isnt the same as paying. You bet $2 on a loser, you're going to lose the $2, no more , no less, regardless of the takeout. Is that so hard to comprehend?
Ok...This is my take....The bet is two bucks..based on a 15% win bet takeout, before it hits the tote board the bet is worth $1.70..So, the bettor lost 30 cents no matter the result. his profit on his wining bet is based on $1.70. Not $2.00
Take the vig on a sports bet for which the standard is 10%...An even money odds bet, costs the bettor $10 no matter what. As opposed to parimutuel wagering, the payoff on a sports bet is shown as "win" amount...Yes, the player gets back his initial wager....But his net profit is $100, not $110. The sports book gets their 10% no matter what..If pari-mutuel wagering were the same, then instead of the bettor handing the teller $2.00, he would fork over $2.15.
If that were a winning wager, his net profit would be $2.00. The 0.15 stays in the pocket of the track.
In the words of a teacher I once had, "does that make sense"?

[Twenty Seven]

The lower the payout, the worse off a winner is after breakage. Big difference between $78.39 down to $78.20, and $2.39 down to $2.20.

[AndyC]

Ok...This is my take....The bet is two bucks..based on a 15% win bet takeout, before it hits the tote board the bet is worth $1.70..So, the bettor lost 30 cents no matter the result. his profit on his wining bet is based on $1.70. Not $2.00
Take the vig on a sports bet for which the standard is 10%...An even money odds bet, costs the bettor $10 no matter what. As opposed to parimutuel wagering, the payoff on a sports bet is shown as "win" amount...Yes, the player gets back his initial wager....But his net profit is $100, not $110. The sports book gets their 10% no matter what..If pari-mutuel wagering were the same, then instead of the bettor handing the teller $2.00, he would fork over $2.15.
If that were a winning wager, his net profit would be $2.00. The 0.15 stays in the pocket of the track.
In the words of a teacher I once had, "does that make sense"?

When a bettor puts up the extra $10 in a sports book for a $100 bet he is in effect putting $10 in an escrow account. The $10 is only paid to the sportsbook in the event of a loss by the player. It doesn't cost the bettor 10% no matter what. If it cost $10 for making the bet then the bettor would only receive $200 when cashing the ticket.

[RXB]

I would defy anybody to find another business where an amount of $2998 owed to someone could be legally rounded down to $2800. But if somebody successfully places a $2000 straight bet on a horse that should pay off at $1.499 per $1 wagered, there it is.

How could this possibly hold up under a legal contest? I can't imagine how any court could justify upholding legislation that enacts dime breakage, or nickel breakage for that matter. It's a ripoff of the consumer, pure and simple. The fact that they've been getting away with it for so long doesn't mean that it's justifiable.

[thaskalos]

I would defy anybody to find another business where an amount of $2998 owed to someone could be legally rounded down to $2800. But if somebody successfully places a $2000 straight bet on a horse that should pay off at $1.499 per $1 wagered, there it is.

How could this possibly hold up under a legal contest? I can't imagine how any court could justify upholding legislation that enacts dime breakage, or nickel breakage for that matter. It's a ripoff of the consumer, pure and simple. The fact that they've been getting away with it for so long doesn't mean that it's justifiable.
The initial excuse when they instituted the breakage takeout was that they didn't want the tellers at the betting windows to be bothered with nickles and dimes when they are cashing our tickets. :rolleyes:

But with the recent popularity of the 10-cent superfecta, we are back to the nickles and dimes again...so why is the breakage still in affect?

[thespaah]

When a bettor puts up the extra $10 in a sports book for a $100 bet he is in effect putting $10 in an escrow account. The $10 is only paid to the sportsbook in the event of a loss by the player. It doesn't cost the bettor 10% no matter what. If it cost $10 for making the bet then the bettor would only receive $200 when cashing the ticket.
Well, yes it does. The odds are 1-1. The win amount is 9.09 for each successful wager. That 91 cents is the bookmaker's commission.
So if I place a $10 wager on a point spread bet my WIN is not $10 but $9.09
In order to WIN $10 the wager must be $11.
On this instance, I think everyone is correct here.

[RXB]

The initial excuse when they instituted the breakage takeout was that they didn't want the tellers at the betting windows to be bothered with nickles and dimes when they are cashing our tickets. :rolleyes:

But with the recent popularity of the 10-cent superfecta, we are back to the nickles and dimes again...so why is the breakage still in affect?

So true. And the handling of coins by tellers is essentially a non-issue now as the vast majority of betting is done electronically via internet, telephone, or on-track machines.

It would take no additional investment in wagering systems, infrastructure, etc. to change to penny breakage. A simple change in the algorithm and it's done.

[MightBeSosa]

What they'll claim is, its all part of the vig. If they eliminate breakage, they will say they have to raise the takeout to compensate.

[RXB]

What they'll claim is, its all part of the vig. If they eliminate breakage, they will say they have to raise the takeout to compensate.

At least then they'd have to be honest about their true takeout rates rather than using breakage to rake off a little extra that isn't shown in their published rates.

[thaskalos]

What they'll claim is, its all part of the vig. If they eliminate breakage, they will say they have to raise the takeout to compensate.
If it's all part of the vig, then they should add it to the vig...and stop lying to us about how much it really costs to play this game.

And if they had a conscience...they would allocate the breakage money towards horse retirement -- where it could do some good.

The money does not belong to them...

[thaskalos]

At least then they'd have to be honest about their true takeout rates rather than using breakage to rake off a little extra that isn't shown in their published rates.
You beat me to it. :ThmbUp:

[senortout]

know what really, really ruined the takeout rates? It all happened way back when you had to see a teller, at a track, to make a bet, and then, when you did manage to hit a nice one, you flipped the teller part of it, like, it didn't matter at all how much you got paid. Now, when you old guys are all whinin' 'bout takeout, (myself included)...you forget how a few of you ruined it for the others.....

humor aside....thats part of why they think we are so stupid!

(same thing happens at casinos, when someone cleans up at 21, they slide a chip to the 'poor' teller..........go figger.)

don't forget...that's so funny, I forgot to laugh....

[Dark Horse]

I don't know how hard tracks are trying to get horse racing out of the stone age, or if odds are just too fluid to present with greater precision.

Example. Today a horse in a MSW goes off at 3/5. Right before the race the odds totaled 126% (down from 135% ML). But after the race they were down to 122% (for a track with a 15.43% takeout). That's 4%, beyond the breakage, that a player can never pinpoint. In other words, the best available information to the player was more than 10% above the takeout.
So you have to work with an overlay, because the payout is going to have some level of surprise. In the above case I tossed out the favorite, and bet the rest of the field for an estimated 57% profit, but the late changes actually turned that into a 100%. I lucked out. Of course, it works the other way as well. You set up a nice bet and it fizzles into next to nothing. Bottomline? There is no reason for tracks to remain stuck in the old world 3/5 and 4/1 notation. If a line is about to flip from 1/2 to 3/5 players should be able to see that, because it represents a 20% odds change... (you can, but only indirectly). Bring horse betting into the digital age. If you say the takeout is 15.43%, that's what it should be. Stop fooling and disrespecting the very people who make this industry possible.

[MightBeSosa]

http://colinsghost.org/2013/04/pittsburgh-phils-thoughts-on-the-pari-mutuel-machines.html

[SpotPlays]

A horseplayer's only chance of beating the game is by wagering with a site that gives a rebate on winning and LOSING bets. That helps negate the takeout and gives a competent handicapper a fighting chance.

But stick with a U.S. licensed company.

It's not complicated

[mountainman]

I don't know how hard tracks are trying to get horse racing out of the stone age, or if odds are just too fluid to present with greater precision.

Example. Today a horse in a MSW goes off at 3/5. Right before the race the odds totaled 126% (down from 135% ML).

Morning line aside, booking percentages can only be calculated from the official chart, because tote odds are always rounded down, and point totals can thus vary widely.

[AndyC]

Morning line aside, booking percentages can only be calculated from the official chart, because tote odds are always rounded down, and point totals can thus vary widely.


Don't the charts reflect rounding as well? 2.29-1 shows in the charts at 2.20-1.

[cj]

Don't the charts reflect rounding as well? 2.29-1 shows in the charts at 2.20-1.

Of course.

[mountainman]

Don't the charts reflect rounding as well? 2.29-1 shows in the charts at 2.20-1.

Charts reflect actual payouts-and prospective payouts, whereas the tote often understates the real amount a win-ticket would return.

[mountainman]

Charts reflect actual payouts-and prospective payouts, whereas the tote often understates the real amount a win-ticket would return.

You've never seen a horse pay $6.58 to win, right?

[RXB]

You've never seen a horse pay $6.58 to win, right?

If there was any sense in the game, we would.

[formula_2002]

Lets start with this:
Eliminate breakage on win bets of $50 or more.
Kick back 1% on win bets>$100..
These returns on win bets need to be scaled up or down based on win pool size.

To get the needed attention to this,we could promote a betting HOLIDAY.

[appistappis]

dramatic effect of takeout......today i hit a super at CD that paid $1533 there.....my payout after ft erie took their cut was $1418