View Full Version : Penny Breakage - Returning rightful winnings to horseplayers
Andy Asaro
09-07-2018, 12:16 PM
https://racingthinktank.com/f/penny-breakage---returning-rightful-winnings-to-horseplayers
Excerpt:
The Jockey Club’s Round Table Conference on Matters Pertaining to Racing in August 2018 featured a presentation from McKinsey consultants in which they identified 15.8% as the “racetrack revenue-maximizing” takeout rate for win, place and show pools (WPS). Unfortunately, for both horseplayers and the racetracks, the average takeout in WPS pools across more than 60 tracks studied is 17.3%.
But the reality is far worse for bettors in those pools when factoring in breakage.
Serving as an additional rake on winning bets, breakage increases the effective takeout to near 20% or higher in some jurisdictions, reducing the return to bettors and thus reducing the amount of money that could be churned back into the pools, increasing handle.
As handle on North American racing has essentially stagnated over the last five years, and is down more than 20% for the last decade, racing operators and regulators need to find ways to stimulate wagering. One way to help the entire system would be to return the rightly earned winnings to bettors, without the burden of breakage.
Andy Asaro
09-07-2018, 12:23 PM
https://twitter.com/racetrackandy/status/1038100100361334784
Click the link for entire article
https://racingthinktank.com/f/penny-breakage---returning-rightful-winnings-to-horseplayers
v j stauffer
09-07-2018, 04:57 PM
What about this idea. Tracks pay penny breakage but only if the entire transaction takes place on track AND at a SAM machine?
Clerks having to deal with the pennies will slow down the lines and potentially get people shut out.
Eventually if you convert more players into live SAM players the track can save money by having to put on less live tellers.
ReplayRandall
09-07-2018, 05:01 PM
.10 cent supers are paid out EVERYWHERE to the penny....What a lot of BS breakage IS, has been, and always will be....Without excuse, outright theft.
chiguy
09-07-2018, 05:34 PM
What about this idea. Tracks pay penny breakage but only if the entire transaction takes place on track AND at a SAM machine?
Clerks having to deal with the pennies will slow down the lines and potentially get people shut out.
Eventually if you convert more players into live SAM players the track can save money by having to put on less live tellers.
What about this idea. Tracks get rid of announcers and take the savings and put on new player seminars where you give the new players $20 to wager.
Eventually you will attract more people to the races and nobody will miss anything.
v j stauffer
09-07-2018, 07:13 PM
What about this idea. Tracks get rid of announcers and take the savings and put on new player seminars where you give the new players $20 to wager.
Eventually you will attract more people to the races and nobody will miss anything.
Who gets to host the seminars? A days pay for each player seems high.
whisperlunch
09-07-2018, 07:41 PM
Vic surely you are not defending the current breakage? Without a doubt the tracks need to pay to the penny. To this day I can’t beli the horse player including me has allowed the tracks to round up on payouts. It’s 100% theft.
How about this - no cash bets allowed.
Vouchers only.
Then pay to the penny.
Andy Asaro
09-07-2018, 08:02 PM
Worrying that the tellers would have to pay out pennies is ridiculous. I've suggested that the tracks give the tellers a couple rolls of nickels and round up if they don't want to pay pennies. My suggestion to the Stronach Group who I met with on Pacific Classic day was to start with nickel breakage on WP and penny on show to see how it goes. And to lower exacta takeout to 17.75%. They agreed to take a serious look at it. With Craig Bernicks group pushing for the same thing it may put the idea over the top. Whichever track does this first will get a ton on new business.
Just to give people an idea they feel these things are a big risk even though I and others believe it's a no brainer. One of the things they always want to do is raise the take on another wagers. They mentioned raising the 3 horse bets from 23.68% to a flat 24%. I don't believe that's necessary plus it puts kind of a negative spin on a great idea.
These things are just part of an integrated plan to increase churn and grow the Customer Base.......IF DONE CORRECTLY
AltonKelsey
09-07-2018, 08:05 PM
imo breakage is a hangnail compared to the cancer of high takeout.
Let's be distracted by this for the next decade.
AltonKelsey
09-07-2018, 08:07 PM
They talk about how NYRA paid out 1.8 million in minus pool money.
First of all, did they add in the extra money made when the chalk runs out ?
Not sure it happens often enough to make a big diff, but still.
And are they implying these show bettors are net profitable ?
ReplayRandall
09-07-2018, 08:08 PM
imo breakage is a hangnail compared to the cancer of high takeout.
Let's be distracted by this for the next decade.
If you can't get "them" to do the small stuff, how will they ever address high takeout?.....Fat chance either happening from fat cats with Big Egos...:bang:
jimmyb
09-07-2018, 08:16 PM
Free parking, free admission, free programs and give us back the breakage. Tracks have been screwing us for years, time for them to give back.
Andy Asaro
09-07-2018, 08:17 PM
If you can't get "them" to do the small stuff, how will they ever address high takeout?.....Fat chance either happening from fat cats with Big Egos...:bang:
Right. It has to be done incrementally.
They talk about how NYRA paid out 1.8 million in minus pool money.
Card better races.
If you can't get "them" to do the small stuff, how will they ever address high takeout?.....Fat chance either happening from fat cats with Big Egos...:bang:
Racing always has a hundred reasons why things can't be done.
Nitro
09-07-2018, 09:23 PM
My only comment is that if you’re a serious player and worried about these inconsequential distractions like breakage and takeout then as far as I’m concerned you’re not focusing on the heart of developing a positive ROI. It’s called discretionary wagering which means that you’re only playing for value. If the value isn’t there then it becomes very simple: Pass the race.
Perhaps it might be necessary to remind those who might be concerned that any form of takeout is already removed from the betting pools so that WYSIWYG in terms of odds or will pays.
I find the discussions about takeout particularly amusing when it comes to thinking that just lowering it will all of a sudden remedy the downward trends that face the local racing communities. My primary play these days is with the Hong Kong Jockey Club. I have no problem with their takeout rates (which are comparable to those here in the States). If any racing jurisdiction has proven anything it’s the HK model: When you have a product that offers full fields, uncompromising integrity and transparency, the patrons will respond with unwavering support (in spite of the takeout rates).
castaway01
09-07-2018, 09:45 PM
My only comment is that if you’re a serious player and worried about these inconsequential distractions like breakage and takeout then as far as I’m concerned you’re not focusing on the heart of developing a positive ROI. It’s called discretionary wagering which means that you’re only playing for value.
The two things have absolutely nothing to do with each other and I don't have any idea why you think they do. Not wanting to get screwed on breakage takes zero time from my handicapping or anything else. Sorry if you can't be a "serious player" and want to get paid what you're fairly owed as well.
As far as the ideas posted, I'm fine with Tom's idea---if you play online, or anywhere you don't need a teller, get paid to the penny.
AltonKelsey
09-07-2018, 10:11 PM
When you can post the 'took late money' add in to the 6 horses you mention pre race, after the result is official, then takeout is indeed a non issue.
Nitro
09-07-2018, 10:34 PM
When you can post the 'took late money' add in to the 6 horses you mention pre race, after the result is official, then takeout is indeed a non issue.
Gee Alton you’re getting smarter by the day! It’s certainly not an issue when you can take advantage of those type of opportunities. And BTW while I might post 5 or 6 preliminary pre-race selections, my goal is to find the best 3 for a lucrative Dutch wager with a 50+% profit margin. Like I said, it’s all about discretionary wagering. A winning wager is just that. I go in with both eyes open and aware the potential profit. Win or lose no one owes me any more then I expect from odds that are displayed during the betting cycle.
clicknow
09-07-2018, 11:21 PM
If any racing jurisdiction has proven anything it’s the HK model: When you have a product that offers full fields, uncompromising integrity and transparency, the patrons will respond with unwavering support (in spite of the takeout rates).
here here.
The U.S. would not have to reinvent the wheel....all they'd have to do is copy this model.
Reality: they don't wish to do that. Honest racing is not what they want.
This whole scenario reminds me of a person who isn't getting a fair shake from their boss at work, or from their company, and instead of shopping their resume around to improve their situation, they just sit in the soup and stew about it.
Get up, and get out. Its really that simple sometimes. Find another venue, or find another hobby.
jay68802
09-08-2018, 03:16 AM
A winning wager is just that.
A winning wager. Next race please. Still does not pay what it should. Period.
Andy Asaro
09-08-2018, 06:53 AM
A winning wager. Next race please. Still does not pay what it should. Period.
The Industry has to move forward. Lowering take on winning wagers and paying to the penny on breakage especially on WPS is vital IMO. People have a right to their opinions of course but why get in the way of a positive change no matter how small you think it is?
How about a $100 5 horse show parlay?
Andy Asaro
09-08-2018, 07:04 AM
Marshall Graham spoke with Bill Nader at last years symposium with a fantastic presentation on lowering take on higher churn wagers and eliminating breakage. Marshall is involved in the Industry and is also a professor of economics.
Jeff P, myself and others have been pushing for lower take and penny breakage for a really long time and in order for it to happen we need voices like Marshall Graham and Craig Bernicks operation to get it done.
https://twitter.com/truxtonstables/status/1038107927771578368
lamboguy
09-08-2018, 08:20 AM
if they take away the breakage they will also take away the only possible way that you can win at this game mathematically. the minus pool will be paying pennies.
it will also hamper business, there are a lot of anti bridgejumpers that fill these pools that keep them interested in the game. a minus pool is like a loss leader for race tracks.
so you weigh it up and figure out which way to go. personally, i would rather get soaked on the breakage and play minus pools. others less skillful at it will probably want the breakage eliminated.
biggestal99
09-08-2018, 08:32 AM
Well I know I have more money due to not having to pay breakage. Of course the money I win goes directly into the my bank account. No fuss, no muss. Thanks betfair.
Allan
Someday Silent
09-08-2018, 06:22 PM
if they take away the breakage they will also take away the only possible way that you can win at this game mathematically. the minus pool will be paying pennies.
That's a good point I hadn't considered.
AltonKelsey
09-08-2018, 06:38 PM
That's a good point I hadn't considered.
And consider the 1000's of people making a living collecting 2.10 . They would have to go on the dole.
Dave Schwartz
09-08-2018, 06:59 PM
If any racing jurisdiction has proven anything it’s the HK model: When you have a product that offers full fields, uncompromising integrity and transparency, the patrons will respond with unwavering support (in spite of the takeout rates).
How is anyone going to copy the HK model without removing all shippers?
That's how and why it works. There are (I believe) 1,200 horses and 200 alternates on the available horse list and no others can race. (Exception of "invitational" races, hence the name.)
Read Andy Asaro's post about stalls at Santa Anita. If any track assigned stalls based upon horses not being allowed to ship in or out during the meet, there'd be plenty of horses.
Nitro
09-08-2018, 07:29 PM
How is anyone going to copy the HK model without removing all shippers?
That's how and why it works. There are (I believe) 1,200 horses and 200 alternates on the available horse list and no others can race. (Exception of "invitational" races, hence the name.)
Read Andy Asaro's post about stalls at Santa Anita. If any track assigned stalls based upon horses not being allowed to ship in or out during the meet, there'd be plenty of horses.
Come on Dave. So now you’re trying to tell everyone that “shippers” would make the difference between racing in the States and what’s going on in HK? It works there because every aspect of their game (from prohibition of drugs to holding jockeys accountable) maintains the type of integrity that so many players here are demanding.
As far as Andy’s post goes, perhaps you should read my response. Consistently having decent field sizes has nothing to do filling stalls. It has everything to do with running them more frequently. Eliminate the drugs like Lasix and that just might happen.
Dave Schwartz
09-08-2018, 08:09 PM
Come on Dave. So now you’re trying to tell everyone that “shippers” would make the difference between racing in the States and what’s going on in HK? It works there because every aspect of their game (from prohibition of drugs to holding jockeys accountable) maintains the type of integrity that so many players here are demanding.
That would be exactly right. That is precisely what I am saying.
If the US had 2 tracks (or 10 tracks) and every horse was signed to race at a certain track, they'd have full fields in every race.
If you didn't race, you'd lose your spot.
The tracks would then be in charge of the trainers and the world would be far different.
HK is not unique by accident. In fact, it IS the business model that US racing needs.
They need a core business entity that actually has some control over the tracks.
Nitro
09-08-2018, 09:04 PM
That would be exactly right. That is precisely what I am saying.
If the US had 2 tracks (or 10 tracks) and every horse was signed to race at a certain track, they'd have full fields in every race.
If you didn't race, you'd lose your spot.
The tracks would then be in charge of the trainers and the world would be far different.
HK is not unique by accident. In fact, it IS the business model that US racing needs.
They need a core business entity that actually has some control over the tracks.
Now you're talkin!
Maximillion
09-09-2018, 01:19 PM
That would be exactly right. That is precisely what I am saying.
If the US had 2 tracks (or 10 tracks) and every horse was signed to race at a certain track, they'd have full fields in every race.
If you didn't race, you'd lose your spot.
The tracks would then be in charge of the trainers and the world would be far different.
HK is not unique by accident. In fact, it IS the business model that US racing needs.
They need a core business entity that actually has some control over the tracks.
It would also stop the practice of a supertrainer looking at a bunch of tracks/races and then shipping in to the easiest spot he can find...and creating another unplayable race.
AndyC
09-09-2018, 05:55 PM
That would be exactly right. That is precisely what I am saying.
If the US had 2 tracks (or 10 tracks) and every horse was signed to race at a certain track, they'd have full fields in every race.
If you didn't race, you'd lose your spot.
The tracks would then be in charge of the trainers and the world would be far different.
HK is not unique by accident. In fact, it IS the business model that US racing needs.
They need a core business entity that actually has some control over the tracks.
Telling a bunch of successful businessmen and women that they have virtually no control over their horse investments would more likely thin the group of horse owners and not fill fields. Not exactly a business model that works well in a capitalistic society.
jimmyb
09-09-2018, 06:02 PM
Telling a bunch of successful businessmen and women that they have virtually no control over their horse investments would more likely thin the group of horse owners and not fill fields. Not exactly a business model that works well in a capitalistic society.
Then let them go train at a farm with an assistant trainer.
castaway01
09-09-2018, 06:08 PM
That's a good point I hadn't considered.
In what possible way is that a good point?
jay68802
09-09-2018, 07:20 PM
They need a core business entity that actually has some control over the tracks.
So true, and the reason that the HBPA's and other alphabet groups are afraid of bills like The Horse Racing Integrity Act. Giving up the control they have frightens the hell out of them.
Andy Asaro
09-10-2018, 10:16 AM
https://twitter.com/racetrackandy/status/1039154062673858560
Excerpt:
“Breakage represents an opaque practice in an era where pricing transparency is essential to the wagering customer, particularly in the face of a growing competitive marketplace with far lower takeout rates. Economists and industry consultants agree racing’s declared takeout is too high, yet breakage only adds to the burden, yielding effective rates that can push nearly 21% in the win, place and show pools, far higher than what is advertised.
“The nature of racing wagering has changed. Most bets are placed away from host tracks, often online. Many on-track wagers have shifted to the use of cash vouchers. Technological advancements and evolution have rendered antiquated the concept of retaining breakage. Racing is in great need of modernization in many facets while seeking means of increasing wagering from its customers. Industry stakeholders should advocate with their regulators for a shift to penny breakage.
BTW the L.A. Times/John Cherwa newsletter is free to sign up.
clicknow
09-10-2018, 11:36 AM
It works there because every aspect of their game (from prohibition of drugs to holding jockeys accountable) maintains the type of integrity that so many players here are demanding.
As far as Andy’s post goes, perhaps you should read my response. Consistently having decent field sizes has nothing to do filling stalls. It has everything to do with running them more frequently. Eliminate the drugs like Lasix and that just might happen.
Yay! and triple Yay!
Bettors also have access to data like Roarer's database, whether or not horse has had surgery for such, as well as as the general veterinary database which notes treatments for both medication and injury records ike mucus in trachea, tendonitis, etc.
In the U.S. full disclosure of information critical to you as a bettor is kept from you. :bang:
Not to mention their video quality as well as the pre race footage of each horse is of exceptional quality.
Andy Asaro
09-10-2018, 12:30 PM
https://twitter.com/racetrackandy/status/1039189279736397829
clicknow
09-10-2018, 12:57 PM
P.S. Hey nitro I haven't played Sha Tin since Magic Man Moreira left. (shock & awe). Guess he got licensed in japan by now, is learning the language w/his tutor, etc. Will be up against Hugh Bowman (Winx's rider) and others in Singapore International Jockeys Challenge soon.
Someday Silent
09-14-2018, 10:24 PM
In what possible way is that a good point?
As someone who doesn't bet very frequently, when I do bet, I have to make it count. Wacky place and show pools have helped me more than once.
Someday Silent
09-14-2018, 10:26 PM
And consider the 1000's of people making a living collecting 2.10 . They would have to go on the dole.
Wait... people actually make a living by doing that?
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