Calculating takeout rates from pool totals and payoffs

[onetonine]

Just wondering if anyone knew of a formula or online calculator for calculating takeout rates from pool totals and payoffs.

There are some tracks outside North America that I would like to know the takeout rates for and they are not listed anywhere. I do have the pool totals and payoffs and the amounts bet on each horse. But I don't know how to calculate the takeout rate...at least in any efficient way!

[ultracapper]

Divide the amount of money bet on the horse by 2, multiply that number by the payout, subtract that number from the total pool, divide that number by total pool, and you have take out rate plus breakage rate. Not sure how to separate those two with the info provided, but you do that with all the races, it will give you a pretty good ballpark of what the general GROSS take rate is anyhow. The breakage throws a wrench in the process described above.

[onetonine]

Ultracapper

Thank you so much!

That is what I was looking for!

[ultracapper]

You're very welcome. I have always considered breakage "un-advertised take out". As far as I'm concerned, it's every bit as much take out as the posted percentages.

[Fox]

If you run the calculation on a longshot payout, you will minimize the impact of breakage as potential breakage is less significant the higher the payoff.

[therussmeister]

If you know what breakage is it is not hard to counteract the effects of breakage. Assume over the long run breakage averages half of the listed rate. That is, if you know breakage is $0.20 on a $2 payout, add $0.10 to the $2 payoff before calculating takeout as above, and then average the calculated takeout rates for several races. Given a large enough sample you should approach the official takeout rate.

If you don't know what the breakage is, that is very easy to figure out as long as it does not vary based on payout size like it does in New York. You just have to look at several winning prices and if for instance, all the prices end in either $.00, $.25, $.50, or $.75 you know the breakage is 25 cents.

[Fox]

If you know what breakage is it is not hard to counteract the effects of breakage. Assume over the long run breakage averages half of the listed rate. That is, if you know breakage is $0.20 on a $2 payout, add $0.10 to the $2 payoff before calculating takeout as above, and then average the calculated takeout rates for several races. Given a large enough sample you should approach the official takeout rate.

If you don't know what the breakage is, that is very easy to figure out as long as it does not vary based on payout size like it does in New York. You just have to look at several winning prices and if for instance, all the prices end in either $.00, $.25, $.50, or $.75 you know the breakage is 25 cents.

You don't really need to average the calculated rates because they never break up only down unless it differs from the US tote. So in a large sample, the min rate calculated would be the best approximation of the official takeout. You can throw out the rest.

[Actor]

There are some tracks outside North America that I would like to know the takeout rates for and they are not listed anywhere.
http://www.brisnet.com/cgi-bin/static.cgi?page=library

[onetonine]

As much as the takeout is they should round UP not down.

On some of the lower payoffs on very heavy favorites that are on a track with dime breakage the breakage affects you really bad. If you had a payoff that was 2.39 it gets rounded to 2.20!

I think if they could lower the takeout significantly on at least wps exacta wagering in the long run you would have more people playing the horses.


Actor

Thanks for the link. I'm not sure what you wanted me to see on it though?

[infrontby1]

Like I've quoted numerous times on the forum again and again,

In this day in age, and especially with the majority of wagers being made paperless (e.g. internet), there's no reason why payouts should be calculated to the nearest penny.

The main argument (supposedly) back then was that tellers would be distracted and held up fumbling through nickels and pennies holding up other bettors waiting in line to wager.

If dime superfecta payouts are displayed to the nearest penny, why can't all the other wagers be the same as well?


Weren't the major exchanges at one time calculating stocks prices in 1/8's? And didn't they convert over to the true decimal system some 18-20 years ago with the advance of technology?

[Track Collector]

Divide the amount of money bet on the horse by 2, multiply that number by the payout, subtract that number from the total pool, divide that number by total pool, and you have take out rate plus breakage rate. Not sure how to separate those two with the info provided, but you do that with all the races, it will give you a pretty good ballpark of what the general GROSS take rate is anyhow. The breakage throws a wrench in the process described above.

Some time ago I attempted to calculate an "approximate" for average breakage. The effort was broad-based, and I came up with the following with regard to the win pool:

For 10-cent breakage tracks --> 0.85 percent, or $0.017 per $2 wagered
For 5-cent breakage tracks --> 0.425 percent, or $0.0085 per $2 wagered

In an effort to be more precise, one could determine the breakage for specific tracks, but little benefit would be gained as the breakage would vary slightly according to what time period one took into account and the average winning pari-mutuel price over that time period.

And, tracks make more (absolute) money from breakage when lower-price horses win (provided they are not involved in a minus pool), than when longshots win because of the total number of winning $2 tickets is greater.

Tracks make a higher "precentage" of breakage in the place and show pools (perhaps 2x and 3x respectively) because there are 2x and 3x the number of winning pool tickets to apply breakage to. From an absolute standpoint, tracks make more breakage money from the win pool (vs. the place and show pools) because there is more money wagered in the win pool, and thus more $2 tickets to apply breakage to.

On the other end of the spectrum with exotic pools, for a single winner all-pay on a superfecta, a track might see a maximum revenue of $0.99 from breakage.

[formula_2002]

sum 1/(1+odds) for all horses
say that sums to 1.21
then 1/1.21 =.826

1-.826 =.173=take out and breakage.
note all odds are to 1, that is 7/2 =3.5 t0 1