How payoffs are determined

[Muddy]

True or false.

If there is say 100,000 in a pool and the track takes a cut of 20%. Then it leaves 80,000 to be paid out to the winning combinations. 1 winning ticket would get 80,000. 2 winning tickets 40,000 each 4 winning tickets 20,000 each and right down the line. So it doesn't matter to the track what the odds are on a horse. They don't make any more or less on a race because of the payoff. They make their money from the cut on the pools.

Also typically a bookie makes his money off the juice. They try to have like say 10,000.00 bet on team A and have 10,000.00 bet on team B and make the money off the juice.

The reason I bring this up is because I hear people say the track or a Bookie really cleaned up when a certain horse or team wins or loses.

[castaway01]

True or false.

If there is say 100,000 in a pool and the track takes a cut of 20%. Then it leaves 80,000 to be paid out to the winning combinations. 1 winning ticket would get 80,000. 2 winning tickets 40,000 each 4 winning tickets 20,000 each and right down the line. So it doesn't matter to the track what the odds are on a horse. They don't make any more or less on a race because of the payoff. They make their money from the cut on the pools.

Also typically a bookie makes his money off the juice. They try to have like say 10,000.00 bet on team A and have 10,000.00 bet on team B and make the money off the juice.

The reason I bring this up is because I hear people say the track or a Bookie really cleaned up when a certain horse or team wins or loses.

The thing is, there are definitely teams every weekend that are "hot teams" where more money is bet on that team and the bookies/casino really can take a hit if that team wins. It's pretty tough to actually get it 50/50, and even if it is that's probably because the spread moved during the week to attract that money, so certain totals would crush the house.

On the other hand, with the track itself the takeout is the takeout and they mostly don't care who wins (with isolated exceptions like minus pools, or the other idea that more favorites winning probably means more people getting their money back and more overall churn, but that's not what we're talking about here).

[Zman179]

Also typically a bookie makes his money off the juice. They try to have like say 10,000.00 bet on team A and have 10,000.00 bet on team B and make the money off the juice.

The reason I bring this up is because I hear people say the track or a Bookie really cleaned up when a certain horse or team wins or loses.

The first part is correct as long as the action on both sides is relatively even. Problem is when the action is very heavy on one side or another whereas the bookie exposes himself to a potential beating. That is why some bookies (not necessarily talking the major outfits here) would lay some of the heavy action onto other bookies so as to lessen the exposure.
Most of the time when you hear this, fixed odds betting is involved (ex. non pari-mutuel Ky Derby Future Wagers). Otherwise if the action is pari-mutuel, the outfit has no interest in an outcome except when a minus pool is generated.

[AskinHaskin]

True or false.

If there is say 100,000 in a pool and the track takes a cut of 20%. Then it leaves 80,000 to be paid out to the winning combinations. 1 winning ticket would get 80,000. 2 winning tickets 40,000 each 4 winning tickets 20,000 each and right down the line. So it doesn't matter to the track what the odds are on a horse. They don't make any more or less on a race because of the payoff. They make their money from the cut on the pools.



So the answer to your question would have to be ”false” given what you’ve written here.


One need do no more than do the math relating to the big DQ before, and after, to realize the difference.

Your unlikely practice example of 4 winning tickets doesn’t paint the complete picture.

[Dream_Police]

Also need to take into consideration the minimum bet.
Supers are .10 (not on Derby Day)
Trifectas are .50 as are most horizontals excluding Doubles and regular P6s


team bets are the +,- variety and are not pari-mutual like racing

[Muddy]

So the answer to your question would have to be ”false” given what you’ve written here.


One need do no more than do the math relating to the big DQ before, and after, to realize the difference.

Your unlikely practice example of 4 winning tickets doesn’t paint the complete picture.
They don't make any more or less money on a race because of the payoff or odds. They make their money from the cut on the pool unless its a minus WPS pool.

[AskinHaskin]

They don't make any more or less money on a race because of the payoff or odds. They make their money from the cut on the pool unless its a minus WPS pool.


You simply do not understand what you're writing about.


DO the math, and then return here with a comparison.

(use the Derby DQ as example #1)

(but use 49,000, or 490,000 winning tickets, not 4 )

[cj]

You simply do not understand what you're writing about.


DO the math, and then return here with a comparison.

(use the Derby DQ as example #1)

(but use 49,000, or 490,000 winning tickets, not 4 )

Or you could just be a nice guy and spell it out.

[JerryBoyle]

You simply do not understand what you're writing about.


DO the math, and then return here with a comparison.

(use the Derby DQ as example #1)

(but use 49,000, or 490,000 winning tickets, not 4 )

Wait, what? Unless there is a minus pool, why would the track care about the outcome from a pure money kept on the race perspective? Yes, if there are a large # of tickets such that the amount awarded to each ticket drops below the required minimum payout (a minus pool), then they'd care.

[Gorrex]

Mostly true that tracks have no stake in the outcome. (except for breakage) That said, it is somewhat better for a track to have mid range prices. Low prices tend to push bettors away, exceptionally high prices tend to lower the chance of reinvestment. It's also better for any bet taker to have THEIR patrons win the most as it increases the chance of reinvestment through them.

(Reinvestment = Churn.. but churn is a word this industry needs to stop using in that manner as it means lost not retained customers in all others and confuses the heck out of anyone why we think its a good thing..)

Parimutuel Gross Pool Pricing is:

((Handle * (1-Takeout)) / WinningDollars) = BasePrice

If BasePrice < MinPay then Payout = MinPay otherwise..

RoundDown(BasePrice * (1 / BreakPoint))/(1 / BreakPoint)) = Payout

Payout - BasePrice = Breakage

Industry income (before splitting it up):
(Handle * Takeout) + Breakage = Income

Net pool pricing is what we actually use now to allow for different takeout rates (Canadian issues mainly) into the same pool. End result is the higher takeout outlets get lower prices than average. Gross pool pricing will mostly get you to US payouts even though we actually use Net calculations.

So yes.. in parimutuel the bet takers (track/otb/adw/etc..) mostly do not care which bets win or lose. They make their income when the bets are made.. they need more bets more often. Their primary concern and driver is takeout which is effectively the "price" of their product. Generally higher = more immediate profits and lower drives new investment and reinvestment.

[davew]

a writer at ESPN does not understand

http://www.espn.com/chalk/story/_/id/26671635/kentucky-derby-dq-costs-bettors-9m

[Gorrex]

No that is correct.. kind of...

Those that had MS did not get to cash tickets.. "bettors" didnt lose 9mil.. but those specific ones did.

[098poi]

No that is correct.. kind of...

Those that had MS did not get to cash tickets.. "bettors" didnt lose 9mil.. but those specific ones did.




I've gotta write that down and put it in my wallet. If I get arrested for anything this will be my go to answer. :D

[davew]

No that is correct.. kind of...

Those that had MS did not get to cash tickets.. "bettors" didnt lose 9mil.. but those specific ones did.

Not even close, it affected all the DD's, Pk3's, Pk4's, Pk5's, PK6's linked to that race. Well over a couple hundred million had a change in winners.

So are you are going to say 'bettors' collective did not lose any different? Then there was no change except for the breakage.

[AskinHaskin]

Yeah, right, and there are no Portuguese-speaking countries in South America... except for Brazil.



Bettors (collectively) didn't lose anything on the DQ - they received much more than they would have if the original finish had stood as the accepted result.

[Gorrex]

No, "bettors" as a whole received pretty much exactly the same. Each wager paid more but to fewer wagers overall. Breakage is also not necessarily lower on a larger price. It usually is but not always.

Order of finish does not affect the amount paid out other than breakage in any way.

Okay.. to cover all angles... except for jackpots and high percent carryover pools..

[Muddy]

Its a hard concept for some to understand I guess. Its all about pieces of the pie some are bigger some are smaller. Bigger the piece = less tickets bigger payoff & smaller the piece = more tickets smaller payoff.

[LemonSoupKid]

Yes, this is a weird back and forth. Short answer:

All the bets you can make, regardless of WPS or exotic, vertical or horizontal, are portions of POOLS. Each type of bet has a particular track take (15-24% let's say, usually trifectas and pick 4s are in the low 20s, for example). They take the % of the handle (on that particular pool) first, then the remainder is available, from which winning tickets
(amounts) are subtracted. The final number is the payout, which is then divided by the winning ticket denomination for the advertised price.

That's 99.5% of situations; minus pools and/or breakage are the only curveballs in there, nothing to worry about for you, big picture.