Where does the takeout go? John Cherwa of the L.A. Times breaks it down.

[Andy Asaro]

https://www.latimes.com/sports/more/la-sp-horse-racing-newsletter-20181216-story.html

Excerpt:

We’re going to use the fall meeting at Santa Anita to illustrate each of these points. And realize the numbers don’t always add up perfectly. So, let’s get started.

The on-track handle (that’s one of our horizontals) at Santa Anita was $14,222,734 and all but $2,819,602, or 19.76%, went back to the bettors. So, where did that $2.8 million (and these are the verticals) go?

— The track took $1,146,373, or 41% of it.

— Purses got $1,305,734, or 46% of it.

— Then the rest of it, $358,495 or 12.8%, went to:

— CHRB support got $177,697.

— City of Arcadia taxes got $46,935.

— Equine research fund got $14,223.

— Workers comp fund got $40,328.

— Breeders fund got $79,311.

OK, do you have how this works? Guess what? Each revenue source has different metrics. Now the next one.

The off-track handle was $14,077,808, all but $2,886,212, or 20.5%, went back to the bettors. And that $2.9 million went to:

— The track took $620,658, or 22% of it.

— Purses got $887,301 or 31% of it.

— And the remaining $1,378,269, or 47.8%, went to:

— CHRB support got $200,075.

— The city of Arcadia got $46,457.

— Equine research fund got $14,078.

— Workers comp fund got $48,577.

— The promotion fund got $35,195.

— Stabling and vanning fund got $281,556.

— The expense fund, which is essentially the cost of doing business by paying mutuel clerks, tote, signal distribution, etc., got $351,945.

— CHRIMS, which is the service that does the accounting on all wagering and makes sure the money is distributed correctly, got $7,039.

— Location fees got $314,503.

— And the breeders fund got $78,845.

Up next is the California ADW handle, which was $15,051,920, all but $3,091,327, or 20.54%, went back to bettors. So, that $3.1 million went to:

— The track got $627,111, or 20% of it.

— Purses got $900,382 or 29% of it.

— And the remaining $1,563,834, or 50.6%, went to:

— Hub fees to California ADW providers got $725,904.

— Department of Industrial Relations got $4,444.

— Equine research fund got $16,295.

— Backstretch, retirement and welfare fund got $68,845.

— Workers comp fund got $51,481.

— Stabling and vanning fund got $73,260.

— Expense fund got $376,298.

— Location fees got $176,723.

— Breeders fund got $68,585.

And finally, the big-ticket item, which is out-of-state betting. The handle was $118,279,178, and all but $24,772,060, or 20.94%, went back to bettors. And that $24.8 million went to:

— The track got $3,284,147 or 13% of it.

— Purses got $4,067,045 or 16% of it.

— And the remaining $17,420,846, or 70.3%, went to:

— The out-of-state tracks collected a whopping $16,403,798.

— CHRB support got $389,577.

— Workers comp fund got $424,327.

— And the breeders fund got $203,143.

[ZippyChippy423]

So the take out percentage from out of state betting was nearly 21% but those OTB hubs get only 8%? That seems a lot less then what I thought. Is this the norm with any simulcasted venue?

[dilanesp]

And you wonder why more tracks don't close.

Here's one of the most popular tracks in the country, running about a month long meaning, and realizing revenue of just $5.6 million. (If you want a handy comparison, the ticket sales alone of tonight's Rams-Eagles game at the Coliseum will be over $6 million.)

That $5.6 million has to pay all the track's overhead. (Yes, they sell a few parking charges, admissions, and hot dogs to the tiny crowds on-track, but not much.)

All the stable area upkeep, the salaries for the hundreds of track employees, all the track maintenance, all the expenses for cleaning up and maintaining the huge plant and grounds, all of it has to be paid out of that $5.6 million.

And that only comes in during the months the track is open. During downtime, the track gets a much smaller amount of money from its off track operation but still has to pay to maintain all those stables and the plant and pay its full time staff.

Horse racing is like the opera and NASCAR. It costs a lot more money to put on than most forms of entertainment. If the sport doesn't figure out how to draw a lot more people out to see its product, it looks very bleak in the long term, especially in Southern California.

[Dave Schwartz]

So the take out percentage from out of state betting was nearly 21% but those OTB hubs get only 8%? That seems a lot less then what I thought. Is this the norm with any simulcasted venue?

We have to remember that for the out-of-state betting that it is someone else who is funding the purses, etc.

I didn't bother to do the math, but I'd guess that SA nets more out of the 8% part than they do from the in-state betting at the higher percentage.

Simply far less expenses.

[Gorrex]

Quite a few bits missing in there too.. also should note this varies highly based on the where's...

Each track has different rates. (host fee)
Each host state has different tax/breakage rules.
Each off track state has different tax rules.
Content rights fees, (differ per track)
Tote rates (pay your tote, differ per tote and track),
Tote interconnect rates (pay their tote, differ per tote and track),
Source Market Fees (differ per residence state of bettor),
Excise taxes (pretty much like source market but slightly different implementation)

Also several of those can change based on special days or special races.

And likely a few more I'm forgetting. But to say its an absolute nightmarish web of fee's and taxes is an understatement.

[jay68802]

Just one question, who gets the breakage?

[toddbowker]

Just one question, who gets the breakage?Also differs by State. In some States the bet taker keeps it. In others, the State keeps it (and usually distributes it to industry participants, like the Breeder's Fund, backstretch programs, etc). In others, it's a combination of both.

[ReplayRandall]

Also differs by State. In some States the bet taker keeps it. In others, the State keeps it (and usually distributes it to industry participants, like the Breeder's Fund, backstretch programs, etc). In others, it's a combination of both.

Breakage is outright criminal theft in todays techno-driven world. When you can pay a dime Super to the penny, enough said....

This has to be eliminated, period.

[Augenj]

Breakage is outright criminal theft in todays techno-driven world. When you can pay a dime Super to the penny, enough said....

This has to be eliminated, period.
Amen. ;)

[Andy Asaro]

http://chrb.ca.gov/annual_reports/2017_annual_report.pdf

Page 47

Breakage, a by-product of the pari-mutuel calculation, is distributed to purses
and to the racing associations. This totaled $7,035,079 in FY 2016-17.

[1GCFAN]

Quite a different picture than the Saturday Evening Post article from the late

30s reprinted in a recent Bloodhorse. In that article SA was so wealthy they reduced the takeout from 8 to 6 per cent.

[Andy Asaro]

Quite a different picture than the Saturday Evening Post article from the late

30s reprinted in a recent Bloodhorse. In that article SA was so wealthy they reduced the takeout from 8 to 6 per cent.

Link? THX