The Importance of Lowering Takeout in Horse Betting

[Fred Mertz]

My column from New Year’s Day (https://www.americasbestracing.net/gambling/2018-playing-favorites-sports-betting-and-horse-racing-two-different-worlds) drew so much reaction I thought I would follow up on it. If you did not read it, I compared the mentality of a sports bettor with that of a horseplayer. A sports bettor is happy to bet into 11 to 10 odds. Meanwhile most self-respecting horseplayers will almost never make a straight bet on the favorite.

Many commented that I was comparing apples to oranges. That sports bettors are playing a side or a team, so it’s an “either or” bet. In horse racing, a favorite, depending on field size, may have to defeat as many as five to 11 other horses. That makes it a more daunting task.

[Snip]

Thesis:

I believe what horse racing will need to do is fight fire with fire. If legal sports betting is offered with a 10 percent hold of 12 to 10, then the horse racing industry should reduce takeout on win, place and show betting also to 10 percent.

https://www.americasbestracing.net/gambling/2018-the-importance-lowering-takeout-horse-betting

Richard Eng is the author of “Betting on Horse Racing for Dummies,” an introductory book for newcomers to the sport of horse racing.

[AndyC]

My column from New Year’s Day (https://www.americasbestracing.net/gambling/2018-playing-favorites-sports-betting-and-horse-racing-two-different-worlds) drew so much reaction I thought I would follow up on it. If you did not read it, I compared the mentality of a sports bettor with that of a horseplayer. A sports bettor is happy to bet into 11 to 10 odds. Meanwhile most self-respecting horseplayers will almost never make a straight bet on the favorite.

Many commented that I was comparing apples to oranges. That sports bettors are playing a side or a team, so it’s an “either or” bet. In horse racing, a favorite, depending on field size, may have to defeat as many as five to 11 other horses. That makes it a more daunting task.

[Snip]

Thesis:

I believe what horse racing will need to do is fight fire with fire. If legal sports betting is offered with a 10 percent hold of 12 to 10, then the horse racing industry should reduce takeout on win, place and show betting also to 10 percent.

You will have to get a little deeper in to the how-to for a track to offer 11-10 or 12-10 to the bettors through a pari-mutuel system. With a PM system the tracks would have a vested interest in a favorite losing. If a favorite has 40% of the pool the vig would only be collected from the 60% losers. With a long shot having 5% of the pool the track would collect on 95% of the bets. There is no mechanism such as point spread movements to equalize the betting as there is in sports betting.

[biggestal99]

Thesis:

I believe what horse racing will need to do is fight fire with fire. If legal sports betting is offered with a 10 percent hold of 12 to 10, then the horse racing industry should reduce takeout on win, place and show betting also to 10 percent.

https://www.americasbestracing.net/gambling/2018-the-importance-lowering-takeout-horse-betting

Richard Eng is the author of “Betting on Horse Racing for Dummies,” an introductory book for newcomers to the sport of horse racing.

Well Monmouth has reduced the vig to 12% on exchange bets, WPS.

when I cash on a chalk I pay 12% and no breakage. seems very civilized.

Of course most likely Monmouth will be the first racetrack also to take sports bets.

wonder what will hill will set the vig up at Monmouth.

Allan

[DeltaLover]

My column from New Year’s Day (https://www.americasbestracing.net/gambling/2018-playing-favorites-sports-betting-and-horse-racing-two-different-worlds) drew so much reaction I thought I would follow up on it. If you did not read it, I compared the mentality of a sports bettor with that of a horseplayer. A sports bettor is happy to bet into 11 to 10 odds. Meanwhile most self-respecting horseplayers will almost never make a straight bet on the favorite.



The highlighted section of your posting is a huge self contradiction; if anything it opens the discussion about your definition of a "self-respecting horseplayer".. Very simply stated, the favorite becomes one because it is backed by the majority of the bettors who obviously are making straight bets on it.

[dilanesp]

My column from New Year’s Day (https://www.americasbestracing.net/gambling/2018-playing-favorites-sports-betting-and-horse-racing-two-different-worlds) drew so much reaction I thought I would follow up on it. If you did not read it, I compared the mentality of a sports bettor with that of a horseplayer. A sports bettor is happy to bet into 11 to 10 odds. Meanwhile most self-respecting horseplayers will almost never make a straight bet on the favorite.

Many commented that I was comparing apples to oranges. That sports bettors are playing a side or a team, so it’s an “either or” bet. In horse racing, a favorite, depending on field size, may have to defeat as many as five to 11 other horses. That makes it a more daunting task.

[Snip]

Thesis:

I believe what horse racing will need to do is fight fire with fire. If legal sports betting is offered with a 10 percent hold of 12 to 10, then the horse racing industry should reduce takeout on win, place and show betting also to 10 percent.

https://www.americasbestracing.net/gambling/2018-the-importance-lowering-takeout-horse-betting

Richard Eng is the author of “Betting on Horse Racing for Dummies,” an introductory book for newcomers to the sport of horse racing.

Technically the takeout on a 11-10 vigorish sports bet is 1/21, or about 4.8 percent. Not 10 percent.

[AndyC]

Technically the takeout on a 11-10 vigorish sports bet is 1/21, or about 4.8 percent. Not 10 percent.

That was stated in the article, although 5% was used. The actual vig is 4.545%, or 1/22.

[AltonKelsey]

The highlighted section of your posting is a huge self contradiction; if anything it opens the discussion about your definition of a "self-respecting horseplayer".. Very simply stated, the favorite becomes one because it is backed by the majority of the bettors who obviously are making straight bets on it.

Like the old joke, no one goes there anymore, it's too crowded.

[thaskalos]

If sports-betting is offered at 12-10 after "legalization"...then it will be a worse gamble than horse racing is right now. An first glance the 10% takeout on sports-betting looks inviting, but there isn't enough "room for error" when there are only two betting sides to a wager...and the winning gambler is looking to capitalize on his competition's "mistakes". That's why the short fields that we currently see at the track are the anathema of the profit-seeking horseplayer. The shorter the field, the lesser the betting options...and the more unlikely our chances become of finding an "overlay" by capitalizing on our competition's mistakes.

[dilanesp]

If sports-betting is offered at 12-10 after "legalization"...then it will be a worse gamble than horse racing is right now. An first glance the 10% takeout on sports-betting looks inviting, but there isn't enough "room for error" when there are only two betting sides to a wager...and the winning gambler is looking to capitalize on his competition's "mistakes". That's why the short fields that we currently see at the track are the anathema of the profit-seeking horseplayer. The shorter the field, the lesser the betting options...and the more unlikely our chances become of finding an "overlay" by capitalizing on our competition's mistakes.

It is even worse than thar.

Nobody really beats sports long term even at 11 to 10, because there aren't any information asymmetries. It is the Efficient Markets Hypothesis in pure form.

[jay68802]

And those guys in Vegas that set the spread, are pretty damn good.

[cj]

It is even worse than thar.

Nobody really beats sports long term even at 11 to 10, because there aren't any information asymmetries. It is the Efficient Markets Hypothesis in pure form.

You mean all those touts I hear on sports radio are lying? :lol::lol::lol:

[thaskalos]

My column from New Year’s Day (https://www.americasbestracing.net/gambling/2018-playing-favorites-sports-betting-and-horse-racing-two-different-worlds) drew so much reaction I thought I would follow up on it. If you did not read it, I compared the mentality of a sports bettor with that of a horseplayer. A sports bettor is happy to bet into 11 to 10 odds. Meanwhile most self-respecting horseplayers will almost never make a straight bet on the favorite.

Many commented that I was comparing apples to oranges. That sports bettors are playing a side or a team, so it’s an “either or” bet. In horse racing, a favorite, depending on field size, may have to defeat as many as five to 11 other horses. That makes it a more daunting task.

[Snip]

Thesis:

I believe what horse racing will need to do is fight fire with fire. If legal sports betting is offered with a 10 percent hold of 12 to 10, then the horse racing industry should reduce takeout on win, place and show betting also to 10 percent.

https://www.americasbestracing.net/gambling/2018-the-importance-lowering-takeout-horse-betting

Richard Eng is the author of “Betting on Horse Racing for Dummies,” an introductory book for newcomers to the sport of horse racing.

Does this post imply that the poster Fred Mertz is Richard Eng, in real life?

[Fred Mertz]

Does this post imply that the poster Fred Mertz is Richard Eng, in real life?

Not at all. I included what I believe to be appropriate excerpts and attribution to the author on this never-ending topic.

[thaskalos]

Not at all. I included what I believe to be appropriate excerpts and attribution to the author on this never-ending topic.

Sorry. When you began your initial post here with My column from New Year's Day...I honestly thought that you were the author of the piece.

[green80]

Somebody may have some insight on this, with all the expenses a track has, could they show a profit reducing the take to 10%? 4.5%? Keep in mind that the track puts up a large percentage of the purse money, pays taxes on the money wagered, and has overhead like any business. Maybe someone in the know can tell us at what take % the track breaks even, then we could have a discussion about the take. Sure everybody wants a better deal, a lower take but what is realistic?

[thaskalos]

Somebody may have some insight on this, with all the expenses a track has, could they show a profit reducing the take to 10%? 4.5%? Keep in mind that the track puts up a large percentage of the purse money, pays taxes on the money wagered, and has overhead like any business. Maybe someone in the know can tell us at what take % the track breaks even, then we could have a discussion about the take. Sure everybody wants a better deal, a lower take but what is realistic?

It used to be that the high takeouts were deemed "necessary" in years past...because of the high operational costs associated with running this game. But this is the "racino-age"...and many of these tracks are running lucrative casino businesses on the side. Is it "unrealistic" to expect some of those casino profits to go towards meeting the business "overhead"...so that the customer can get some takeout RELIEF? Why is the customer the only one who isn't benefiting in the least from the casino-business windfall that these tracks are collecting?

[TonOfTrot]

Considering the life support that many tracks are on from casino subsidies, reducing takeout and making it worst doesn't seem promising.

Some say that if you reduce takeout, handle will increase much more to more than offset the decrease but I think the jury is still out if thats really true.

[AndyC]

Considering the life support that many tracks are on from casino subsidies, reducing takeout and making it worst doesn't seem promising.

Some say that if you reduce takeout, handle will increase much more to more than offset the decrease but I think the jury is still out if thats really true.

It doesn't matter whether or not it is true. The take-out is part of the product and the wagering consumers are not finding the product attractive.

[cj]

Considering the life support that many tracks are on from casino subsidies, reducing takeout and making it worst doesn't seem promising.

Some say that if you reduce takeout, handle will increase much more to more than offset the decrease but I think the jury is still out if thats really true.

Life support? Yes, casinos "saved" some tracks. But is that really a good thing? It probably could have been if subsidies were used to make the betting product better, including lowering takeout. But all they've turned into at most places (I don't include NYRA in this) is cash cows for a few trainers, now super trainers, that dominate the circuits and win most of the money. If anything, the betting product is worse at most places than it was before slots.

[AltonKelsey]

Before the internet age, tracks were limited to whatever the on track warm bodies would bet.

What happened to the economies of scale, now that 95% of the action is off premises?

Let's have fewer tracks, lower the takeout to 10% or less, and stop futzing around.