Bigger Takeout for Exotics...

[badcompany]

What exactly is the logic behind this? I'm guessing the tracks believe that a bettor should have to pay more to access the greater payoffs of exotics, but, couldn't this also be seen as punishing the bettors for making these bets?

[Figman]

Following the same line of thinking.....why do win,place & show bets have the same takeout?

Shouldn't the takeout for win be higher than place and the place takeout be higher than the show takeout?

A win bet is easier to cash than an exacta bet.......and a place bet is easier to cash than a win bet, etc.

[SMOO]

They should all be set @ 10% or less so to be more competitive with sports betting & casino games.

[InsideThePylons-MW]

They should all be set @ 10% or less so to be more competitive with sports betting & casino games.

45% would mean better purses, bigger fields and better quality racing.

[cnollfan]

What exactly is the logic behind this? I'm guessing the tracks believe that a bettor should have to pay more to access the greater payoffs of exotics, but, couldn't this also be seen as punishing the bettors for making these bets?

I believe the reasoning is that the bettors won't really notice the higher takeout, since exotics pay quite a bit to begin with. Someone cashing a $700 ticket is pleased to have won and not that worried about the fact that it should have paid $850 with a lower takeout, and the losers on that race are losers at any takeout.

When scratches reduce a horse race down to two or three horses, the win pool takeout becomes painfully obvious.

[the little guy]

The takeout is dispersed in exotic bets based on the number of spots the bet covers. 20% takeout in exactas is much better than 16% for win bets. The more horses, or races, involved in the bet the more the takeout is dispersed.

[ezrabrooks]

The takeout is dispersed in exotic bets based on the number of spots the bet covers. 20% takeout in exactas is much better than 16% for win bets. The more horses, or races, involved in the bet the more the takeout is dispersed.

Sounds like herding to me..

Ez

[badcompany]

The takeout is dispersed in exotic bets based on the number of spots the bet covers. 20% takeout in exactas is much better than 16% for win bets. The more horses, or races, involved in the bet the more the takeout is dispersed.

I had a friend make this argument to me, that a pick3 is really only an 8.66% takeout per race, but I don't buy it. Whether it's WPS, EX, TRI PK3, you're making a bet and a certain % takeout is skimmed off the top with the rest being returned to the public. The number of combinations is irrelevant.

Maybe you can convince me otherwise.

[the little guy]

While your friend isn't correct that it is divided equally, he is close to correct, and if my brain wasn't so addled from too much information I would do the equation. It's fairly simple mathematics.

I don't have a need to convince anyone. It is what it is.

[the little guy]

I'm not up for the equation, but here's a simple example.....

Imagine you are faced with four straight exact 4:1 shots in a 15% takeout pool. That means each horse has $17K bet to win on it in a pool of exactly $100K as the takeout reduces the pool to $85K and 85 divided by 5 is 17. So, if you parlay $2 on each, supposing there was a double on the first two you would get $50. A three horse parlay would go to $250 and a four horse parlay would be $1250 ( all assuming, of course, that your additional money in the pool didn't alter the outcome....but of course it would eventually lower it which makes the multi-races theoretically better.....but you can extend that argument as well ).

Now, assume you bet a double at 20%. You take the 20% out of the first race/horse and get the second one takeout free. That same $10 horse in race one goes to $9.40.....while the second horse goes to 4.88:1.....thus you parlay is now $9.40 x 5.88....or $55.30.

The Pick-3s and Pick-4s theoretically work the same way except make the takeout 26% for the first horse....which makes him pay $8.70 to win. However, with the other races takeout free you get $301 for the Pick-3 and $1770 for the Pick-4. Now, certainly there are other factors outside of theoreticals, but it's mathematically sound.

[parimutual]

I'm not up for the equation, but here's a simple example.....

Imagine you are faced with four straight exact 4:1 shots in a 15% takeout pool. That means each horse has $17K bet to win on it in a pool of exactly $100K as the takeout reduces the pool to $85K and 85 divided by 5 is 17. So, if you parlay $2 on each, supposing there was a double on the first two you would get $50. A three horse parlay would go to $250 and a four horse parlay would be $1250 ( all assuming, of course, that your additional money in the pool didn't alter the outcome....but of course it would eventually lower it which makes the multi-races theoretically better.....but you can extend that argument as well ).

Now, assume you bet a double at 20%. You take the 20% out of the first race/horse and get the second one takeout free. That same $10 horse in race one goes to $9.40.....while the second horse goes to 4.88:1.....thus you parlay is now $9.40 x 5.88....or $55.30.

The Pick-3s and Pick-4s theoretically work the same way except make the takeout 26% for the first horse....which makes him pay $8.70 to win. However, with the other races takeout free you get $301 for the Pick-3 and $1770 for the Pick-4. Now, certainly there are other factors outside of theoreticals, but it's mathematically sound.



That's good stuff

[MIplayer]

Even though the Pick 4 takeout is lower with consideration to each individual race, it is more difficult to hit. So the way I see it, if your win% is lower the higher takeout makes long term profit more unrealistic.

This is like the lottery in a way. If you win $5 on a scratcher, its all yours chief. If you hit the jackpot you have to give a considerable portion to the state.

[Cangamble]

Lets not forget that exotic betting is fairly new. I'll just use Woodbine as an example. In the 60's they had one daily double, and one or two exactors on the entire card.
I'm not sure when exactors were available in every race...sometimes in the 70's I would guess, and in the early 80's triactors entered the picture. First one a day, and then two a day.
Back then there was no intertrack, no phone betting, and no internet betting...you had to be at the track, and no bookies would take a triactor bet anyway:)
The point is that people only had 8-10 races they could bet on in a day. Many left with money, which is more and more difficult today with a triactor in every race, even if it just 6 horses, and the fact you could bet other tracks.

And a half decent triactor hit, would actually take money out of the churn money, and people would buy things with some of the proceeds:)

The thing is when triactors and exactors and the internet and simulcast betting became available to the masses, the tracks just decided to keep things the way they were, even though it isn't the right thing to do today.

So it made sense to charge more for those bets.

[Imriledup]

I'm not up for the equation, but here's a simple example.....

Imagine you are faced with four straight exact 4:1 shots in a 15% takeout pool. That means each horse has $17K bet to win on it in a pool of exactly $100K as the takeout reduces the pool to $85K and 85 divided by 5 is 17. So, if you parlay $2 on each, supposing there was a double on the first two you would get $50. A three horse parlay would go to $250 and a four horse parlay would be $1250 ( all assuming, of course, that your additional money in the pool didn't alter the outcome....but of course it would eventually lower it which makes the multi-races theoretically better.....but you can extend that argument as well ).

Now, assume you bet a double at 20%. You take the 20% out of the first race/horse and get the second one takeout free. That same $10 horse in race one goes to $9.40.....while the second horse goes to 4.88:1.....thus you parlay is now $9.40 x 5.88....or $55.30.

The Pick-3s and Pick-4s theoretically work the same way except make the takeout 26% for the first horse....which makes him pay $8.70 to win. However, with the other races takeout free you get $301 for the Pick-3 and $1770 for the Pick-4. Now, certainly there are other factors outside of
theoreticals, but it's mathematically sound.

What's the difference between a DD and an exacta? In the DD, you have to pick 2 horses to do something, albeit in 2 seperate races. In the Exacta, you have to pick 2 horses to do something in the same race. Whats the difference if one bet is decided in one race and one bet is decided in 2 races? Its kinda the same thing, its a '2 horse bet'. Right?

[the little guy]

What's the difference between a DD and an exacta? In the DD, you have to pick 2 horses to do something, albeit in 2 seperate races. In the Exacta, you have to pick 2 horses to do something in the same race. Whats the difference if one bet is decided in one race and one bet is decided in 2 races? Its kinda the same thing, its a '2 horse bet'. Right?


Right.

[JPinMaryland]

:lol: Now I remember why I havent placed a bet since derby 08.

[DSB]

This is a quite interesting thread. Stuff that I've given a lot of thought over the years.....

For what it's worth, here's my take on the subject:

Of all of the reasons why racing has been in a steady decline for decades, I think the betting menus and takeout rates have been the biggest culprit.

Way back when, when racing was healthy, they had win, place show, and a daily double. Attendances where large, handles very good (all on track), takeout on w,p,s was as low as 10%, and some tracks broke to a nickle.

No doubt about it, racing was big business. Track operators raked in the dough, states added to their coffers, fields were big, and there were plenty of venues.

But, as with many businesses, greed took over. States wanted more of the pie. Operators looked for a way to make even more money. The old model wasn't robbing the suckers fast enough. Something had to be done.

At first, it was just a raise in the parimutuel take. It worked its way up to around 17% at most places - and probably only stopped at that point because anything beyond that amount would have had too noticeable an effect on payoffs. To my knowledge, daily double bets always had an increased take - 20% or so - and the wager was instituted as a way to induce fans to get to the track early.

Anyway, once the upper limit had been reached on w,p,s, another avenue had to be explored to extract the money. Enter exotic wagering. First, a couple of exactas a day. So far, so good. Those pools could be cut at a higher rate, and the suckers wouldn't even notice. Hmmmm. Why not make EVERY race an exacta race? Didn't take long to do that. Hmmmm. Why not add something a little harder, with bigger payoffs to wean the bettors off w,p,s? Trifectas? Great idea! Hell, we can even take a bigger cut of them... they will never notice that we are returning even less from the pool because of the payoffs.... this is great! And instead of buying a couple of tickets, they are spreading combinations all over the place! Why didn't we think of this sooner?

Tracks sold everyone on the idea that exotic betting was just giving fans "more options, more ways of having fun", but the real reason was extra profits for them, pure and simple.

Well, the only problem with all of this is that the operators were making it damn near impossible to leave the track a winner. It was hard enough to survive 9 races of betting with a 17% cut, but surviving 20-25% takeouts with fewer winning combinations was disastrous for most bettors.

From what I've read on this site, there seems to be some good mathmaticians around here. Try this exercise:

Start with a small number for simplicity's sake, say $100.

Have a card game where the rake is $27%. That represents a 22% take out rate plus breakage to a dime.

after 10 rounds, how much money is left? Game over.

If racing really wanted to do something to increase business, they ought to revert to the model that made the game great in the first place.

I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%

If there was a major track with a 10% take on w,p,s and breakage to a nickle, I (and I'm sure many others) would bet horses for a living. As it stands now, I only make occasional bets. Why? Because the profit I would be making on a consistent basis lies somewhere between the old rate of takeout and the current rate. In short, I would expect to make 7% - 10% profit instead of nothing.

Couldn't tracks "sacrifice" take on their w,p,s pools to attract more betting? My guess is that tracks would very quickly realize even more profit at the lower takeout rate than they do now because of the increase in betting volume.

Any thoughts?

[badcompany]

The Pick-3s and Pick-4s theoretically work the same way except make the takeout 26% for the first horse....which makes him pay $8.70 to win. However, with the other races takeout free you get $301 for the Pick-3 and $1770 for the Pick-4. Now, certainly there are other factors outside of theoreticals, but it's mathematically sound.
Good post
I see what your saying. With a parlay you're getting hit twice with a takeout.


Couldn't tracks "sacrifice" take on their w,p,s pools to attract more betting? My guess is that tracks would very quickly realize even more profit at the lower takeout rate than they do now because of the increase in betting volume.

Any thoughts?

What you're saying obviously makes sense. However, the "operators" don't seem to understand that some people actually would like to show a profit at this game, and, if it becomes a near impossibility, those people will eventually keep their money in their pockets.
I'm down to betting this game six weeks a year, the Saratoga meet. I go up there. Have a great time, win or lose. However, there's no way I'm gonna make donations, year 'round, anymore. I work for my money.

[JPinMaryland]

It would be great to get take outs smaller but unless television and newspaper coverage follows, I dont see that as getting many more people out to the track. In this area the Washington POst has given up any coverage of the MD tracks. And then ESPN stopped their weekly show so it really sucks although w/ internet and an account I guess you can still follow races that way.

I also think online poker and slots is also taking a toll on the sport but not as much as takeout and lack of tv...

It just seemed to absurd to me, to be playing a game with a 20% or more takeout. No matter how much time I spend on this, it just seemed it was all I can do to break even. I will still probably play the Ky derby just to participate...

I guess the real issue for me now is whether to follow the derby preps. Every year for the last 5 y years I would make it a pt. to track horses, go to the OTB most every Sat, etc. Then after the Belmont lay low for awhile until October.

Now that I am determined not to waste any more money I am finding it hard to get engaged by the spring preps. I will watch them on youtube I guess but probably not go OTB that much..

[ezrabrooks]

I'm not up for the equation, but here's a simple example.....

Imagine you are faced with four straight exact 4:1 shots in a 15% takeout pool. That means each horse has $17K bet to win on it in a pool of exactly $100K as the takeout reduces the pool to $85K and 85 divided by 5 is 17. So, if you parlay $2 on each, supposing there was a double on the first two you would get $50. A three horse parlay would go to $250 and a four horse parlay would be $1250 ( all assuming, of course, that your additional money in the pool didn't alter the outcome....but of course it would eventually lower it which makes the multi-races theoretically better.....but you can extend that argument as well ).

Now, assume you bet a double at 20%. You take the 20% out of the first race/horse and get the second one takeout free. That same $10 horse in race one goes to $9.40.....while the second horse goes to 4.88:1.....thus you parlay is now $9.40 x 5.88....or $55.30.

The Pick-3s and Pick-4s theoretically work the same way except make the takeout 26% for the first horse....which makes him pay $8.70 to win. However, with the other races takeout free you get $301 for the Pick-3 and $1770 for the Pick-4. Now, certainly there are other factors outside of theoreticals, but it's mathematically sound.

Thanks for explanation Andy.. I had never looked at take out from that angle.

Ez

[DSB]

bad co & JP

I think we are seeing a pattern emerging here. The three of us all seem to be similar in some respects.

we seem to share a passion for racing, handicapping and betting.

we seem to have been regular bettors who bet infrequently now, largely because we realize the take prevents us from showing a profit.

maybe racing needs to reclaim its lost customers, as well as recruit new ones. after all, we already know how to handicap, like betting, and have contributed to the pools in the past. and there are plenty of us.

think anyone is listening? I doubt it. The people who run racing appear ready to try anything to improve business, as long as it doesn't involve making it possible for anyone to come out ahead. I suppose they feel that's their bag, and they are the only ones who should profit. Pretty damn stupid, if you ask me.

another thing. its alarming who is actually running racetracks these days. overwhelmingly guys who dont bet, have never bet, dont know how to bet (or handicap) and think that people who do bet are suckers. Just the kind of people we need directing the future of our game.

Is it any wonder why racing just keeps on its downward spiral?

[the little guy]

bad co & JP

I think we are seeing a pattern emerging here. The three of us all seem to be similar in some respects.

we seem to share a passion for racing, handicapping and betting.

we seem to have been regular bettors who bet infrequently now, largely because we realize the take prevents us from showing a profit.

maybe racing needs to reclaim its lost customers, as well as recruit new ones. after all, we already know how to handicap, like betting, and have contributed to the pools in the past. and there are plenty of us.

think anyone is listening? I doubt it. The people who run racing appear ready to try anything to improve business, as long as it doesn't involve making it possible for anyone to come out ahead. I suppose they feel that's their bag, and they are the only ones who should profit. Pretty damn stupid, if you ask me.

another thing. its alarming who is actually running racetracks these days. overwhelmingly guys who dont bet, have never bet, dont know how to bet (or handicap) and think that people who do bet are suckers. Just the kind of people we need directing the future of our game.

Is it any wonder why racing just keeps on its downward spiral?


Let me get this straight, you are not in favor of more exotic wagering yet also think management knows nothing about betting and does nothing to give players an opportunity to win?

I think it is you that doesn't really understand the betting public.

[DSB]

Apparently you don't have it straight.

I see nothing in my statements that is contradictory... do you? If so, please elaborate.

And, while you're at it, why not define "the betting public" and explain why you understand it better than I do.

Finally, in the interest of full disclosure, are you a member of track management? I don't need to know who you are, a simple "yes" or "no" will suffice.

[the little guy]

Everyone on this site knows my role in racing, it's a given, and it's debatable whether or not it would be considered " track management. "

You don't seem to understand exotic wagering, which is your prerogative, however in doing so you don't appear to be in touch with the wagering public.

What is also specifically contradictory is your ignoring that exotic wagering actually reduces takeout, and thus makes it easier to win, while saying just the opposite.

[ezrabrooks]

Everyone on this site knows my role in racing, it's a given, and it's debatable whether or not it would be considered " track management. "

You don't seem to understand exotic wagering, which is your prerogative, however in doing so you don't appear to be in touch with the wagering public.

What is also specifically contradictory is your ignoring that exotic wagering actually reduces takeout, and thus makes it easier to win, while saying just the opposite.

I can see your theoretical lower take on horizontal wagers, but, to take advantage of this lower take, you must be prepared to wager only in a certain horizontal sequence...so, you could be trading lower take, for higher risk on your part.

Ez

[DSB]

An exotic bet costs more than a straight bet. You are not going to tell me that it's just as easy to pick an exacta as it is a winner, are you? Maybe it's you who don't understand exotic wagering. In a single race, you'll pay 17% to make a win bet and 22% for an exacta. Buy one ticket and you will certainly pay more to participate in the exacta pool and it will be more difficult to cash. That's pretty basic.

Sure, a pick 3 bet is a better bet than a 3 horse parlay (for more than just takeout reasons), but to win you have to pick 3 winners, no matter what.

So technically you are correct. The take on a pick 3 will cost you less than a parlay, IF THAT IS THE KIND OF BETTING YOU LIKE TO DO.

Im not saying to bar exotic betting.. I could care less. If people want to pay more to try to get a bigger payoff.... its a free country. If people want to buy a bunch of tickets that they know they can't win in an effort to cash with one, that's up to them, too.

But when this game was at its peak, betting was straight and with much lower takes than today.

My theory is that racing could attract many of their former bettors if they reverted to that formula. Maybe Im right, maybe not. But I know I would certainly get back into the game, and bet quite a bit at that.

One other question. If the current betting menu and takeouts are just fine, how come racing keeps losing fans and handle? I guess i don't understand that either.

I have to go to work now. First post is fast approaching.

[the little guy]

I couldn't possiblym disagree more.

[DeanT]

Here is an article from the site on multileg wagers if you'd like to read it DSB

http://blog.horseplayersassociation.org/2008/09/handicapping-multi-leg-wagers.html

[DSB]

Thanks, Dean, but I already conceded the fact that multiple race bets are better from a takeout standpoint than making a corresponding parlay. but you do give up flexability when you make those bets. for example, say you make a pick 3 wager and your first horse wins and pays $10. Your second horse pays $30, and the winner of the third leg is a late money special that you didn't see coming and pays only $5. You certainly made out takeout wise but you didn't cash a thing. If you had been making a parlay, you could have adjusted your betting - either taking some money off the table after getting a windfall, or not betting your horse at all in the third leg because of the unforseen hot favorite. Things don't always work out for the best in multiple leg wagers. In this instance, you threw away a $10 winner and a $30 bomb because you didn't have a $5 winner in the third leg.

The article was quick to point out that you can make greater profits when a multiple race wager pays more than a corresponding parlay. What they failed to mention is that it can also work in the opposite direction. Occasionally a horse with low program odds - one that lots of people throw into their multiple race bets and lowers the odds of the multiple race bet - drifts up and pays overlay win odds.

Now, back to the original point. There is no debate that single race exotic wagers cost more to participate in, and these pools are often bigger than the w,p,s pools. Typical takeouts are 17% w,p,s, 22% exacta, 25% tri's and supers. Do we agree so far? Ok... if youre betting win, the track is returning $83 out of every $100, exactas $78 out of a $100, tri's and supers $75.

How can anyone say that the take is not greater on these exotics than it is for w,p,s?

Now, if you say "well, you're getting to bet two, three, or four horses in those pools", that does not change the fact that the amount removed from the pool is greater. Just because you are "buying" your way into a riskier pool, with arguably a greater chance for reward, doesnt mean it's a better bet. It's a different, more expensive, bet. That's about it.

Debates about the merits of one type of bet over another could go on forever. But there is no way that a bettor doesn't pay more for a $2 exacta ticket than he does for a $2 win ticket.

[classhandicapper]

Can we please put all these fairly tales about about exotic bets to rest one and for all?

If you bet $1 into a single horse pool where the take is 17% you will lose 17 cents plus breakage over the long haul (assuming reasonably efficient pools and no skill).

If you bet $1 into a pool where the take is 25%, you will lose 25 cents plus breakage (assuming reasonably efficient pools and no skill) no matter how many horses are part of the bet.

PERIOD END OF STORY!

What multiple horse bets enable you to do is find TWO MISTAKES wthin the same race or same sequence of races. In theory that makes it easier to find or create value on a single ticket DESPITE the HIGHER take.

For example:

If you play your top value pick in an exacta over 3 RANDOM horses you will lose more (or win less) over the long haul than if you just played him to win because the exacta take is higher - EVEN THOUGH TWO HORSES make up the bet.

If you hate the favorite and you play your top value pick over a few horses and leave the favorite out, you are still bucking a higher take, but you are taking advantage of two mistakes/opportunities within the same race to create value and overcome that larger take. Same with multi-race bets.

The reason parlays tend to pay less than doubles, the PICK3 etc... is that you have to put more money through the windows TAXED AT A LOWER RATE to accomplish the same thing and it nets out to a lower payoff. However, that has nothing to do with the TAX RATE on exotics. You are still bucking a higher tax rate. The track wins money at a faster rate from exotic bets.

[DanG]

“Net” is being left out of the equations I’m reading. In evaluating your own play it all comes down to would you rather have 75% of $500.00 or 83% of $450.00?

It’s like the 21% exacta rake at Trk-A vs. the 20% rake at Trk-B. If you have a personal 5% advantage at A over B; you would be mistaken to favor the lower rake. (Trust me; I’m not justifying the obscene takeouts.)

I also think the exotic inefficiencies; while being mentioned are not stressed enough. The relatively sloppy serial / tri-super betting far outweigh the easily adjusted win tote. It’s not easy to find the win pool where an individual put in 64 wagers with the expectation of losing 63 individual bets.

[so.cal.fan]

This is a fascinating thread!
Very interesting and informative posts.
:ThmbUp:

[badcompany]

It would be great to get take outs smaller but unless television and newspaper coverage follows, I dont see that as getting many more people out to the track.

The getting people to the track train has already left the station. Horse racing has transitioned to a primarily off-track betting game. That said, the game needs to stop hemmoraging serious players and to start getting new ones.

Most people lose money at poker and the stock market, too. However, there are example of winning players who provide encouragement and hope to aspiring pros and semi-pros. A while back, someone posted an interview with a mob guy who ran a horse book in Brooklyin in the 80s. He said you had a better chance finding a unicorn than a winning horseplayer. Are horseplayers really this bad at the game, or is it that the deck is stacked against them? Even those who still play regularly realize what they're up against but they're either too addicted or too afraid, of having to get a life, to quit.

[classhandicapper]

“Net” is being left out of the equations I’m reading. In evaluating your own play it all comes down to would you rather have 75% of $500.00 or 83% of $450.00?

It’s like the 21% exacta rake at Trk-A vs. the 20% rake at Trk-B. If you have a personal 5% advantage at A over B; you would be mistaken to favor the lower rake. (Trust me; I’m not justifying the obscene takeouts.)

I also think the exotic inefficiencies; while being mentioned are not stressed enough. The relatively sloppy serial / tri-super betting far outweigh the easily adjusted win tote. It’s not easy to find the win pool where an individual put in 64 wagers with the expectation of losing 63 individual bets.

Dan,

I agree with the first part 100%, but the second part only partially.

In theory (and probably in reality) the exotic pools are bet less efficiently, but this crazy idea that the take is divided by 2, 3, 4 or 6 because a bet is multi-race causes most people to include dozens of the poorest value horses on their tickets in an effort to hit the bet.

I see it all the time with people that may be better handicappers than I am. They simply don't quite grasp some of the horrible value individual tickets they include in their exotics trying to cash the bet. Between the higher take and the inclusion of many poor value combinations, any edge they gain because of the ability to take advantage of "multiple mistakes" or "inefficient pools" gets badly diluted.

Some day I may get brazen enough and focus on exotics. I think I would crush them if I played them properly. But unfortunately I don't have the temperment for long losing streaks and wild swings etc.. My emotional makeup is a severe limitation to my success at the races and elsewhere. :bang:

[DSB]

Ok, I'm gonna take a stab at this. Let me know if my math is wrong.

My feeling is that a multiple race wager is better than a corresponding parlay. For the record, I've never been a parlay bettor, but I have bet pick 3's and pick 4's. What I've especially enjoyed betting is a multiple race wager with a carryover. In my opinion, it's the only sure way to beat the take.

Anyway, I believe that given the choice, tracks would much rather have someone attempt, say, a three horse parlay than to play a pick 3. Regardless of takeout rates, I think tracks make more money when someone parlays, which, conversely, makes it cheaper to play the pick 3.

Let's take a typical pick 3 pool with a 22% take. In a $1,000 pool the track would rake $220 right off the bat. End of story.

But what happens when, say, a group of people attempt a parlay on the same three races? This is what I've come up with.

If 500 people set out to make a win (17% take) parlay and bet two bucks each, you have the same $1,000 bet on the first leg of the parlay.

After the first leg, some people would be eliminated and those still remaining would divide $830.

That $830 would be bet on the second leg, with the track returning $689 to the bettors who survived round two.

The final $689 would return a total of $572 to those who had all three winners in the parlay.

That means over the same three races, the track rake would have totaled $428 instead of the $220 they took from the corresponding pick 3 pool.

Sure looks like a better wager to get into the closed pool that took 22% all at once rather than a parlay which takes three seperate chunks along the way.

Now I realize that a parlay involves three pools which will include other win wagers than just the original parlay money. But because that additional money is cut at the same rate, I don't see how it would affect the numbers, on average.

Btw, I'm sticking with my original claim that single race exotic wagers are always more expensive than a w,p,s bet in the same race, regardless of how many horses are involved in the exotic.

[DanG]

Btw, I'm sticking with my original claim that single race exotic wagers are always more expensive than a w,p,s bet in the same race, regardless of how many horses are involved in the exotic.
I think I know where you’re going with this ‘DSB and I agree in this sense. Let’s say the track is made up of 5 levels of players.

A. Serious as a heart-attack
B. Serious as a mild stroke
C. Serious as a common cold
D. Serious as a hang nail
E. Serious as Rip Taylor during happy hour.

• If you give player A & B a menu of every conceivable exotic wager in each race they will act accordingly to their edge.

• Player C will dip in occasionally and possible more then should because there is such a thing as knowing just enough to get in trouble in pari-mutual wagering.

• Player D may very well benefit from the 1950’s betting menu as the WPS options will almost certainly make their cash last longer.

• Player E: we can only Rip was left a huge inheritance and plays every pool with both fists.

To say “exotic bets are more expensive” doesn’t tell the entire story imo; it depends on what player you’re talking about.

On that subject; the famous poker player Daniel Negreanu has a philosophy called “small ball”. I don’t pretend to know my poker terminology but it’s somewhat seeing many flops / as cheaply as possible and trying to out play your opponents as the hand develops.

A good friend is applying this to serial bets with great success where he re-evaluates his wagers (in progress) during each event and plays a complex series of “insurance wagers” depending upon “pot odds” as the poker world likes to say.

That is to say; His P4 wager is evaluated according to result in the 2nd leg (after the flop) when a P3 is entered and a rolling DD if offered. Again after 3rd leg (4th street in poker) the same process and of course again in the last leg;(on the River). If the exotic menu was limited this man would basically be out of the game as he just dissolved a P6 team that was together for decades.

Long / poorly explained way of saying; “usually” the more wagering opportunities you offer a serious player / the more likely they are to take advantage and get involved. If you’re saying someone who is at a disadvantage before the cards are dealt will be hurt by the complex wagering offered (and promoted) you could very well be right.

[SMOO]

This is a quite interesting thread. Stuff that I've given a lot of thought over the years.....

For what it's worth, here's my take on the subject:

Of all of the reasons why racing has been in a steady decline for decades, I think the betting menus and takeout rates have been the biggest culprit.

Way back when, when racing was healthy, they had win, place show, and a daily double. Attendances where large, handles very good (all on track), takeout on w,p,s was as low as 10%, and some tracks broke to a nickle.

No doubt about it, racing was big business. Track operators raked in the dough, states added to their coffers, fields were big, and there were plenty of venues.

But, as with many businesses, greed took over. States wanted more of the pie. Operators looked for a way to make even more money. The old model wasn't robbing the suckers fast enough. Something had to be done.

At first, it was just a raise in the parimutuel take. It worked its way up to around 17% at most places - and probably only stopped at that point because anything beyond that amount would have had too noticeable an effect on payoffs. To my knowledge, daily double bets always had an increased take - 20% or so - and the wager was instituted as a way to induce fans to get to the track early.

Anyway, once the upper limit had been reached on w,p,s, another avenue had to be explored to extract the money. Enter exotic wagering. First, a couple of exactas a day. So far, so good. Those pools could be cut at a higher rate, and the suckers wouldn't even notice. Hmmmm. Why not make EVERY race an exacta race? Didn't take long to do that. Hmmmm. Why not add something a little harder, with bigger payoffs to wean the bettors off w,p,s? Trifectas? Great idea! Hell, we can even take a bigger cut of them... they will never notice that we are returning even less from the pool because of the payoffs.... this is great! And instead of buying a couple of tickets, they are spreading combinations all over the place! Why didn't we think of this sooner?

Tracks sold everyone on the idea that exotic betting was just giving fans "more options, more ways of having fun", but the real reason was extra profits for them, pure and simple.

Well, the only problem with all of this is that the operators were making it damn near impossible to leave the track a winner. It was hard enough to survive 9 races of betting with a 17% cut, but surviving 20-25% takeouts with fewer winning combinations was disastrous for most bettors.

From what I've read on this site, there seems to be some good mathmaticians around here. Try this exercise:

Start with a small number for simplicity's sake, say $100.

Have a card game where the rake is $27%. That represents a 22% take out rate plus breakage to a dime.

after 10 rounds, how much money is left? Game over.

If racing really wanted to do something to increase business, they ought to revert to the model that made the game great in the first place.

I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%

If there was a major track with a 10% take on w,p,s and breakage to a nickle, I (and I'm sure many others) would bet horses for a living. As it stands now, I only make occasional bets. Why? Because the profit I would be making on a consistent basis lies somewhere between the old rate of takeout and the current rate. In short, I would expect to make 7% - 10% profit instead of nothing.

Couldn't tracks "sacrifice" take on their w,p,s pools to attract more betting? My guess is that tracks would very quickly realize even more profit at the lower takeout rate than they do now because of the increase in betting volume.


:ThmbUp:

This is a great post and one that anyone involved in the industry should read and learn from.

[DSB]

Thanks for the reply, Dan

Let me make one small, but important, correction. What I said was "Btw, I'm sticking with my original claim that single race exotic wagers are always more expensive than a w,p,s bet in the same race, regardless of how many horses are involved in the exotic."

I indeed believe it's not the case with multiple race wagers, like the ones your friend plays.

And there is no doubt that player skill is the determining factor in consistently overcoming the take in any pool.

If your friend, or anyone else, bets into a single race exotic he will pay more than if he had made a w,p,s bet. The fact that his skill may make it possible for him to overcome it is largely irrelevant. Everybody gets hit the same.

Interesting how your friend has chosen to insure his multiple race wagers. I've done so plenty of times, but using a much simpler approach.

When I'm alive in a DD, P3, P4 and I survive to the final leg, sometimes I look to insure with win bets on selected horses I've left out of the wager. Usually I won't consider it unless the wager will pay enough to sacrifice some profit for the insurance. A simplistic approach for sure, but it's saved me a few times.

[Cangamble]

DSB, breakage is not 5%. Not even close. If the average collective payoff is (and I'm taking a conservative stab here) $40.05, the breakage is very minute.
If the average show payoff is 3.45, then it is more significant (11% on profits).

Average exotic payoffs at Woodbine:
EXOTICS PAYOFF Daily Double: 108.32 Triactor: 969.35 Pick 3: 425.67 Superfecta: 9,049.29 Pick 6: 22,823.10 Pick 4: 4,251.62 Pick 7: 42,691.70 Exactor: 108.71

Also, when you make a parlay, expect the odds to be affected in the third leg at many small tracks especially.

[Cangamble]

DSB, breakage is not 5%. Not even close. If the average collective payoff is (and I'm taking a conservative stab here) $40.05, the breakage is very minute.
If the average show payoff is 3.45, then it is more significant (11% on profits).

Average exotic payoffs at Woodbine:
EXOTICS PAYOFF Daily Double: 108.32 Triactor: 969.35 Pick 3: 425.67 Superfecta: 9,049.29 Pick 6: 22,823.10 Pick 4: 4,251.62 Pick 7: 42,691.70 Exactor: 108.71

Also, when you make a parlay, expect the odds to be affected in the third leg at many small tracks especially.
For a $3.45, breakage is only 3.4%. I don't know what I was thinking. It is 5% for a $3.05 payoff.

[DanG]

Let me make one small, but important, correction. What I said was "Btw, I'm sticking with my original claim that single race exotic wagers are always more expensive than a w,p,s bet in the same race, regardless of how many horses are involved in the exotic."

If your friend, or anyone else, bets into a single race exotic he will pay more than if he had made a w,p,s bet. The fact that his skill may make it possible for him to overcome it is largely irrelevant. Everybody gets hit the same.

Gotcha DSB; my mistake.

There are plenty of real world examples however where you can turn the +- 20% exacta skim into a better investment then a +- 17% win rake. Many times ones odds line doesn’t offer a single overlay in the win pool; but in weighted exactas even a 2-1 favorite can have their “win” expectation doubled depending on your under opinions.

Again; we always get back to the 300lbs gorilla in any speculation and that’s net.

[DSB]

DSB, breakage is not 5%. Not even close.

Hmmm. and to think I thought I knew what I was doing when I made a morning line for nearly 30 years.

Breakage at venues that break to a dime is on average nearly 5%. That is halfway between two even payoffs with no breakage left over.

Breakage at venues that break to a nickle is on average nearly 2.5%. That is halfway between two even payoffs with no breakage left over.

Breakage has nothing to do with odds to a dollar other than how much it takes to reach the next even dime or nickle - whichever the case may be - to a dollar.

A track breaking to a dime would return $8.00 if the odds were 3.19 to 1.
Thats 9.5% The same track would return $8.00 if the odds were 3.01 to 1. That would be .5% An average of the two is almost 5%. The reason it is "almost" is because occasionally the odds will be exact - 3.00 to one.

I'm not going to go through this exercise for breakage to a nickle. It's essentially the same except it's in half.

Now, as far as your astute observation that "expect the odds to be affected in the third leg at many small tracks especially." No joke. If anything, you're helping make my case that generally bettors are better off playing a multiple race wager than a parlay.

The sloppiest morning lines are done by those who ignore breakage in their calculations, btw.

You don't happen to make one, do you?

[badcompany]

On that subject; the famous poker player Daniel Negreanu has a philosophy called “small ball”. I don’t pretend to know my poker terminology but it’s somewhat seeing many flops / as cheaply as possible and trying to out play your opponents as the hand develops.


Long / poorly explained way of saying; “usually” the more wagering opportunities you offer a serious player / the more likely they are to take advantage and get involved. If you’re saying someone who is at a disadvantage before the cards are dealt will be hurt by the complex wagering offered (and promoted) you could very well be right.

Since you brought up poker, I recently caught an episode of Poker after Dark. The players were all guys who got started at the Mayfair Club, a poker room in NYC, back in the day, that produced a lot of world champion players like Dan Harrington and Howard Lederer.

During the show, the guys started talking about other types gambling. To a man, they all said that they would never try to play horses professionally BECAUSE OF THE RAKE.

I would agree with your assertion that more types of wagers give a bettor more opportunities to spot inefficiences. However, with the huge takeout, these "opportunities" are just more ways for the track to sucker the public, as pointed out by DSB.

[Cangamble]

DSB, breakage is not 5%. Not even close.

Hmmm. and to think I thought I knew what I was doing when I made a morning line for nearly 30 years.

Breakage at venues that break to a dime is on average nearly 5%. That is halfway between two even payoffs with no breakage left over.

Breakage at venues that break to a nickle is on average nearly 2.5%. That is halfway between two even payoffs with no breakage left over.

Breakage has nothing to do with odds to a dollar other than how much it takes to reach the next even dime or nickle - whichever the case may be - to a dollar.

A track breaking to a dime would return $8.00 if the odds were 3.19 to 1.
Thats 9.5% The same track would return $8.00 if the odds were 3.01 to 1. That would be .5% An average of the two is almost 5%. The reason it is "almost" is because occasionally the odds will be exact - 3.00 to one.

I'm not going to go through this exercise for breakage to a nickle. It's essentially the same except it's in half.

Now, as far as your astute observation that "expect the odds to be affected in the third leg at many small tracks especially." No joke. If anything, you're helping make my case that generally bettors are better off playing a multiple race wager than a parlay.

The sloppiest morning lines are done by those who ignore breakage in their calculations, btw.

You don't happen to make one, do you?
A track breaking to a dime would return $8.00 if the odds were 3.19 to 1.
Thats 9.5% The same track would return $8.00 if the odds were 3.01 to 1.
********************************************
A track breaking to a dime still has $8.10, $8.20 and $8.30 payoffs, so what you say is happening, aint happening.

And of course it matters what the payoff is. The way to look at breakage is (when they pay to the dime) that is costs a nickel on average to cash a two dollar bet. A ten dollar bet cashed costs the bettor on average 25 cents, and a $100 ticket cashed costs the player $2.50 on average. But remember, a $100 ticket probably averages a payoff of $8 or so, or winnings of $300. So the player loses less than 1% in this example.

[DSB]

Ok, this is officially getting ridiculous.

Any example you give of a track that has payoffs of $8.10 or $8.30 is breaking to a nickle, not a dime.

Breakage occurs on every dollar bet, not in relation to the payoff, but on EVERY SINGLE DOLLAR bet.

Look at it any way you like.

But it IS happening, and it costs bettors an average of nearly 5% at tracks that break to a dime and nearly 2.5% at tracks that break to a nickle.

I suppose there's a lot of truth in the saying "ignorance is bliss".

Go forth and be blissful.

[Cangamble]

Ok, this is officially getting ridiculous.

Any example you give of a track that has payoffs of $8.10 or $8.30 is breaking to a nickle, not a dime.

Breakage occurs on every dollar bet, not in relation to the payoff, but on EVERY SINGLE DOLLAR bet.

Look at it any way you like.

But it IS happening, and it costs bettors an average of nearly 5% at tracks that break to a dime and nearly 2.5% at tracks that break to a nickle.

I suppose there's a lot of truth in the saying "ignorance is bliss".

Go forth and be blissful.
Just double my numbers for rounding to a dime then. I got the lingo wrong.
And you are still wrong. When a horse is 3.19-1, the horse pay $8.20.
On a $2 bet, using this example, the horse pays $8.20 instead of $8.38. So the player is losing 18 cents over $6.20 in profit. This works out to 2.9% (1.45% on average).

Yes, I agree with you, ignorance is bliss.

[DanG]

Since you brought up poker, I recently caught an episode of Poker after Dark. The players were all guys who got started at the Mayfair Club, a poker room in NYC, back in the day, that produced a lot of world champion players like Dan Harrington and Howard Lederer.

During the show, the guys started talking about other types gambling. To a man, they all said that they would never try to play horses professionally BECAUSE OF THE RAKE.

I would agree with your assertion that more types of wagers give a bettor more opportunities to spot inefficiences. However, with the huge takeout, these "opportunities" are just more ways for the track to sucker the public, as pointed out by DSB.
I saw the same episode;

The question was to a card player; “do you know anyone beating a 25% rake?” their answer was no…the person asking the question went on to say poker was a game of skill and racing was not and he was later corrected.

Between skill / discipline / creative betting and in most cases rebates the game can be approached if you’re willing to put in more hours then the law allows. (PTC players don't pay a 25% rake for example)

If memory serves BC; we have been down this road before where your position is its virtually impossible to profit long term and if that’s where this discussion is heading; I respect your opinion and once again choose to disagree.

[jballscalls]

back to the orginal sentiment of the thread, Cangamble had the correct answer. take out is higher on exotics because often that money doesnt come back into the churn in its entirety, so the tracks try to get more of it the first time round.

If i hit a 20 to 1 win bet in the first race for 42 bucks, almost 100% sure that 100% of that money will go back into the next few races. If i hit a trifecta for 240 bucks, 100 or more of those dollars wont go back into the races. they will go into my dinner that night and be spent on a date the following night.
atleast thats been my interpretation.

Be Blissful everyone!

[DSB]

Ok. In my haste to post a response before going to work, I made a couple of careless errors. I will correct them - none of which alters the original premise.

A track breaking to a dime would return $8.00 if the odds were 3.19 (should be 3.09) to 1. Thats 9.5% (should be 9%) The same track would return $8.00 if the odds were 3.01 to 1. That would be .5% (should be 1%).

Breakage occurs on every (winning) dollar bet, not in relation to the payoff, but on EVERY SINGLE (winning) DOLLAR bet.


Anyway, the point is, the breakage - which can be as high as 9.9%, but on average is more like 4.9% at places that break to a dime - is money you don't get when you win a bet.

The difference between breaking to a nickle and breaking to a dime is about 2.5% of the wagers (not payoff) returned to you when you win a bet.

Say what you like about breakage, but if you're betting enough, it can add up to serious money. And it's expressed as a percentage of each dollar you bet when you collect on a wager.

Think breakage is insignificant? Suggest to a racetrack that they take all breakage and use it to seed a pool in order to return it to the bettors.

I'd be interested in what they tell you.

I can guarantee what they won't tell you:

"great idea"

[so.cal.fan]

DSB
LOL, you bet that's what they would tell you.
Several years ago, I read where an attorney was questioning the legality of breakage, claiming that someone could probably win a law suit.
Any lawyers on board who can comment on this?

[ezrabrooks]

Ok. In my haste to post a response before going to work, I made a couple of careless errors. I will correct them - none of which alters the original premise.

A track breaking to a dime would return $8.00 if the odds were 3.19 (should be 3.09) to 1. Thats 9.5% (should be 9%) The same track would return $8.00 if the odds were 3.01 to 1. That would be .5% (should be 1%).

Breakage occurs on every (winning) dollar bet, not in relation to the payoff, but on EVERY SINGLE (winning) DOLLAR bet.


Anyway, the point is, the breakage - which can be as high as 9.9%, but on average is more like 4.9% at places that break to a dime - is money you don't get when you win a bet.

The difference between breaking to a nickle and breaking to a dime is about 2.5% of the wagers (not payoff) returned to you when you win a bet.

Say what you like about breakage, but if you're betting enough, it can add up to serious money. And it's expressed as a percentage of each dollar you bet when you collect on a wager.

Think breakage is insignificant? Suggest to a racetrack that they take all breakage and use it to seed a pool in order to return it to the bettors.

I'd be interested in what they tell you.

I can guarantee what they won't tell you:

"great idea"

Breakage is a definite hidden tax. In Texas, I think Breakage, goes to State Bred Incentive Programs. Not sure if the Tracks keep any of it or not. Doubt if a lawsuit could bust it.

Ez

[DSB]

Ez,

At times breakage has been earmarked for the state, the track, breeding programs, stakes programs, and various combinations thereof.

To my knowledge, no effort has ever been made to return it to bettors.

[Cangamble]

Ok. In my haste to post a response before going to work, I made a couple of careless errors. I will correct them - none of which alters the original premise.
********************
We all make mistakes.

A track breaking to a dime would return $8.00 if the odds were 3.19 (should be 3.09) to 1. Thats 9.5% (should be 9%) The same track would return $8.00 if the odds were 3.01 to 1. That would be .5% (should be 1%).


Breakage occurs on every (winning) dollar bet, not in relation to the payoff, but on EVERY SINGLE (winning) DOLLAR bet.
*************************
If there is exactly 1000 in the win pool, and the track takeout is 20%, and there is exactly 200 to win on the winner, the payoff would be exactly $8.00. There would be no breakage.
Of course, on average, the breakage is 5 cents when breaking to the nickel, and 10 cents when breaking to the dime.
Lets say there is a pool shot on a pick 3. The pool is 1001, the takeout is 25% (or $250.25), meaning the person hitting the pool would get back 750.75 if there was no breakage. But the pick pays 750.70 at places breaking to the nickel and 750.60 at places breaking to the dime.

Now you can show me your math to prove that breakage is 2.5 in the case of the track rounding to the nickel. Hint, if the track takeout was 27.5% as you are inferring, the payoff would be 725.725, rather 725.70.



Anyway, the point is, the breakage - which can be as high as 9.9%, but on average is more like 4.9% at places that break to a dime - is money you don't get when you win a bet.
********************************
:bang::bang::bang::bang:


The difference between breaking to a nickle and breaking to a dime is about 2.5% of the wagers (not payoff) returned to you when you win a bet.
*********************
:bang::bang::bang::bang:

Say what you like about breakage, but if you're betting enough, it can add up to serious money. And it's expressed as a percentage of each dollar you bet when you collect on a wager.
**********************
It adds up to on average a nickle per every cash you make per $2 wager. So yes, it can add up if you bet large amounts and cash win, place and show tickets with frequency.

Think breakage is insignificant? Suggest to a racetrack that they take all breakage and use it to seed a pool in order to return it to the bettors.
************************
I didn't say it is insignificant, it is just a lot more insignificant than 2.5-9.9% on most bets. Granted, when betting show, and cashing a 2.20 shot in a pool that breaks to the dime, breakage on average is around 50%.

I'd be interested in what they tell you.

I can guarantee what they won't tell you:

"great idea"
*************************
I agree with you. They take whatever they can get their grubby paws on.

[badcompany]

So, can we conclude that breakage has a greater effect on WPS bettors because of their more frequent ticket cashes and smaller payouts?

[DSB]

So, can we conclude that breakage has a greater effect on WPS bettors because of their more frequent ticket cashes and smaller payouts?


BC,

I think that the effect breakage has on a bettor and the way it is expressed in terms of percentage are two seperate questions.

effect is largely subjective. if you take down a $1,000 pool for a dollar, I'd suppose you don't worry much about the 5 cents (on average) that is lost to breakage.

the percentage of returned wagers that breakage represents is objective. At places that break to a dime, breakage will account for approximately 5% on average.

In the example above, if a bettor takes down a hundred such pools betting one dollar each time, breakage will cost him the same as a guy who wins a $100 show bet that pays $2.10 (on average, of course).

The way it's viewed by the respective bettors is likely to be 180 degrees, but the percentages will be the same.

Tracks that break to a dime are essentially robbing winning bettors for an additional 2.5% of their bets, on average, than if they broke to a nickle. All tracks have the ability to break to a nickle, but only a small percentage actually do. This blatant disregard (among other things) has kept me largely on the sidelines for years now. I have a feeling I'm not the only one.

[Cangamble]

So, can we conclude that breakage has a greater effect on WPS bettors because of their more frequent ticket cashes and smaller payouts?
Yes. It costs bettors 5 cents per $2 ticket on average on a track breaking to the nickle no matter what that ticket is (exactor, show, pick6, etc.).

So if you cash 10 $200 show tickets, your cost is approximately 100 tickets times 10 times 5 cents, or $50 in breakage.
Conversely, if you hit 200 $2 exactor tickets, your cost is approximately 200 times a nickle, or $10 in breakage.

From the tracks viewpoint. I just spoke with a former racing exec. He told me he used to budget for .5% of the total handle as expected breakage during a year. Not 2.5% or 5% as DSB keeps repeating here.

Another good example: Lets say you were betting some hick harness track that has very little pools. You liked a longshot, but bet it to show. Your bet $200, but no one else bet the horse to show. The total pool is $299.
Track takeout is 20%, so your payoff should be $2.392, but because the track breaks to the dime, they only pay you $2.20 to show.
This is as extreme an example you can get, but the 2.20 is still only reflective of an extra 6.42141% in track takeout. In other words, that would be the payoff if the takeout was 26.42% instead of 20%.

Saying that breakage represents 2.5-5% extra takeout is just plain ludicrous.

[Cangamble]

Tracks that break to a dime are essentially robbing winning bettors for an additional 2.5% of their bets, on average, than if they broke to a nickle.
******************************
Math just isn't your strong point.

[DSB]

Yes. It costs bettors 5 cents per $2 ticket on average on a track breaking to the nickle no matter what that ticket is (exactor, show, pick6, etc.).

So if you cash 10 $200 show tickets, your cost is approximately 100 tickets times 10 times 5 cents, or $50 in breakage.
Conversely, if you hit 200 $2 exactor tickets, your cost is approximately 200 times a nickle, or $10 in breakage.

From the tracks viewpoint. I just spoke with a former racing exec. He told me he used to budget for .5% of the total handle as expected breakage during a year. Not 2.5% or 5% as DSB keeps repeating here.

Another good example: Lets say you were betting some hick harness track that has very little pools. You liked a longshot, but bet it to show. Your bet $200, but no one else bet the horse to show. The total pool is $299.
Track takeout is 20%, so your payoff should be $2.392, but because the track breaks to the dime, they only pay you $2.20 to show.
This is as extreme an example you can get, but the 2.20 is still only reflective of an extra 6.42141% in track takeout. In other words, that would be the payoff if the takeout was 26.42% instead of 20%.

Saying that breakage represents 2.5-5% extra takeout is just plain ludicrous.

Did you post this hastily? Because it's loaded with careless errors and misrepresentations. Either that, or your math simply sucks.

First of all, breakage is not calculated based on total handle, it's not calculated on the net distributed to winners,

IT IS CALCULATED BASED ON ORIGINAL WAGERS RETURNED TO BETTORS

your example pits a bettor who has placed $2000 in winning wagers against a bettor who has placed $400 in winning wagers.

OF COURSE THE GUY BETTING $2,000 IS GETTING HIT FOR $50 AND THE GUY WHO BET $400 IS LOSING $10. THE GUY WHO BET $2,000 BET FIVE TIMES AS MUCH AS THE OTHER GUY! JEEZ!

now, your pal, the racing exec., budgets .5% for breakage. ON THE ENTIRE HANDLE. That simply means that they project that 10% of total handle will be returned as the original wagers of winners. That is where breakage comes from. 10 x .5 = 5 ..... as in 5%

oh, and I agree with you on one thing:

:bang: :bang: :bang: :bang: :bang:

[Cangamble]

Did you post this hastily? Because it's loaded with careless errors and misrepresentations. Either that, or your math simply sucks.

First of all, breakage is not calculated based on total handle, it's not calculated on the net distributed to winners,

IT IS CALCULATED BASED ON ORIGINAL WAGERS RETURNED TO BETTORS

your example pits a bettor who has placed $2000 in winning wagers against a bettor who has placed $400 in winning wagers.

OF COURSE THE GUY BETTING $2,000 IS GETTING HIT FOR $50 AND THE GUY WHO BET $400 IS LOSING $10. THE GUY WHO BET $2,000 BET FIVE TIMES AS MUCH AS THE OTHER GUY! JEEZ!

now, your pal, the racing exec., budgets .5% for breakage. ON THE ENTIRE HANDLE. That simply means that they project that 10% of total handle will be returned as the original wagers of winners. That is where breakage comes from. 10 x .5 = 5 ..... as in 5%

oh, and I agree with you on one thing:

:bang: :bang: :bang: :bang: :bang:
You are really really tragically stunned. .5% of the total handle is like an extra .5% on what the track takes out. So if the track takeout is collectively 20% at a track, thanks to breakage, it is 20.5%.

And again, breakage is all about winning tickets. On average it is a nickle for every $2 bet cashed. Whether the winning ticket is $2.20 or $15,345

You made a statement that breakage adds 2.5-5% to the track takeout. You have no grasp on track takeout or math. I suggest you stop, you are making a fool out of yourself here.

[DSB]

You are really really tragically stunned. .5% of the total handle is like an extra .5% on what the track takes out. So if the track takeout is collectively 20% at a track, thanks to breakage, it is 20.5%. (Ummm.. nobody said that)

And again, breakage is all about winning tickets. On average it is a nickle for every $2 bet cashed. Whether the winning ticket is $2.20 or $15,345

(where did I hear this before?)

You made a statement that breakage adds 2.5-5% to the track takeout. You have no grasp on track takeout or math. I suggest you stop, you are making a fool out of yourself here.

That's hilarious. You don't know what breakage is, how it's calculated, or how it's expressed as a percentage, and I'm making a fool of myself. Funny.

And now I see you admit that every dollar CASHED is subject to it, and that on average it's 2.5% (apparently your tracks break to a nickle). Hmmmm. sounds a lot like what I've been saying all along. Wasn't it you who wanted to express it as a percentage of the amount you WON on a $2 bet?

And I never said that breakage comes off of the entire pool. If you bet $2 and it's taxed at 17%, then you can expect to deduct an average of 2.5% on top of that when you win. There is no difference between money the track takes from your bet as tax and the money the track doesn't pay you when you win. Either way, its gone.

one other thing. If your exec friend works at a place that breaks to a nickle, they apparently budget for 5% of original wagers to be returned to bettors. 5 x .5 = 2.5%. I thought 10% of wagers sounded a little on the high side.

Oh, and when the fool's parade starts, let me know. I'll be sure to fall in line right behind you.

[Cangamble]

That's hilarious. You don't know what breakage is, how it's calculated, or how it's expressed as a percentage, and I'm making a fool of myself. Funny.

And now I see you admit that every dollar CASHED is subject to it, and that on average it's 2.5% (apparently your tracks break to a nickle). Hmmmm. sounds a lot like what I've been saying all along. Wasn't it you who wanted to express it as a percentage of the amount you WON on a $2 bet?

And I never said that breakage comes off of the entire pool. If you bet $2 and it's taxed at 17%, then you can expect to deduct an average of 2.5% on top of that when you win. There is no difference between money the track takes from your bet as tax and the money the track doesn't pay you when you win. Either way, its gone.

one other thing. If your exec friend works at a place that breaks to a nickle, they apparently budget for 5% of original wagers to be returned to bettors. 5 x .5 = 2.5%. I thought 10% of wagers sounded a little on the high side.

Oh, and when the fool's parade starts, let me know. I'll be sure to fall in line right behind you.
You are clueless. Seriously. I'm wasting my time debating you.

Prove to me that takeout increases by 2.5% on a payout that should pay 10.39 thanks to breakage, but only pays 10.20. Let see your math. :lol::lol::lol: I'll show you mine after you show me yours. :lol::lol::lol::lol:

You made a statement that breakage adds 2.5%-5% to the takeout, and changes it from 20% to 22.5-25%. You are beyond stuck on stupid when it comes to math.


I see you admit that every dollar CASHED is subject to it,
**********************
No, I said on average breakage costs per bet cashed, not per dollar amount.
In my example, 10,000 is in the pool, 2,000 exactly is bet on the winner, and the takeout is exactly 20%. There is no breakage that the track gets for that bet. NONE ZERO. The horse pays $8.00 even. The track got their 20% takeout and that is it.

[DSB]

You are clueless. Seriously. I'm wasting my time debating you.

Prove to me that takeout increases by 2.5% on a payout that should pay 10.39 thanks to breakage, but only pays 10.20. Let see your math. :lol::lol::lol: I'll show you mine after you show me yours. :lol::lol::lol::lol:

You made a statement that breakage adds 2.5%-5% to the takeout, and changes it from 20% to 22.5-25%. You are beyond stuck on stupid when it comes to math.


I see you admit that every dollar CASHED is subject to it,
**********************
No, I said on average breakage costs per bet cashed, not per dollar amount.
In my example, 10,000 is in the pool, 2,000 exactly is bet on the winner, and the takeout is exactly 20%. There is no breakage that the track gets for that bet. NONE ZERO. The horse pays $8.00 even. The track got their 20% takeout and that is it.

What the hell is in the water in Canada, anyway?

When did I ever say that you can be certain that you'll lose exactly 2.5% of your bet to breakage on any particular bet? I have NEVER said anything but it is an AVERAGE.

Of course there are times when the odds will be exact and there won't be any breakage. Who ever said otherwise? Conversely, there will be times you will lose almost 5% to breakage. What is midway between 0% and 5%? could it be 2.5%? IT IS AN AVERAGE.


Oh, and in your example, I'm sorry I can't show you a 2.5% loss to breakage, because using your numbers, 19 cents is 9.5% of a two dollar bet. What does your math say? This ought to be good. And for some reason, you've apparently used an example of a track that breaks to a dime. No matter.

If you're going to resort to word twisting or misquoting me to make your point, it's time to give up.

[Cangamble]

What the hell is in the water in Canada, anyway?

When did I ever say that you can be certain that you'll lose exactly 2.5% of your bet to breakage on any particular bet? I have NEVER said anything but it is an AVERAGE.

Of course there are times when the odds will be exact and there won't be any breakage. Who ever said otherwise? Conversely, there will be times you will lose almost 5% to breakage. What is midway between 0% and 5%? could it be 2.5%? IT IS AN AVERAGE.


Oh, and in your example, I'm sorry I can't show you a 2.5% loss to breakage, because using your numbers, 19 cents is 9.5% of a two dollar bet. What does your math say? This ought to be good. And for some reason, you've apparently used an example of a track that breaks to a dime. No matter.

If you're going to resort to word twisting or misquoting me to make your point, it's time to give up.

This is what I'm arguing:

This is what I'm arguing with him over:
"I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%"

http://www.paceadvantage.com/forum/showpost.php?p=640072&postcount=17

PROVE IT!

[DSB]

This is what I'm arguing:

This is what I'm arguing with him over:
"I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%"

http://www.paceadvantage.com/forum/showpost.php?p=640072&postcount=17

PROVE IT!

You pay 17% when you make the bet, and you lose an average of up to 5% to breakage when you cash the bet. Unlike takeout, breakage is irrelevant to the losers; it's the winners that are affected. And you never know what it's going to be in advance, you can only expect an average.

Just because it's not deducted from the outset (and I never said it was) doesn't mean it isn't real and that it can't be expressed as a percentage of your bet. And it's money you don't get - PER DOLLAR - of what you bet.

Regardless of how much one bets or what kind of wager one bets, a winning bettor will lose approximately 5% of the amount he bet to breakage, when breaking to a dime.

Take is money removed before you win, and breakage is money removed after you win.

No matter how you look at it, both affect your wager and the amount of money you realize from the bet.

If I pay 34 cents to buy a $2 ticket, then get hit for an underpayment of 10 cents due to breakage, doesn't that add up to 44 cents or 22% of a $2 dollar bet?

This is what it cost ME, as a winner, to participate.

Breakage, as money you won but didn't get, affects your profits. That is the main point. And if you cash enough tickets, it can add up to serious money.

If you have another formula, let's hear it.

[InsideThePylons-MW]

Give me to win 50K on Cangamble -800 please.

[badcompany]

If memory serves BC; we have been down this road before where your position is its virtually impossible to profit long term and if that’s where this discussion is heading; I respect your opinion and once again choose to disagree.

While I'm sure we'll still agree to disagree, I didn't say it was impossible to show a profit, I said, and am saying, it's a "bad way" to try and make money, and, this thread has done a pretty good job of making my point.

Cangamble and DSB might disagree on the exact effect of breakage, but, I think they'd both agree that it's just another way to screw the bettor.

The tracks COULD round up as well as round down depending on the exact odds, but choose not to because they'd rather stick it to the "customers" one more time.

[A. Pineda]

I agree with Cangamble's posts re the insignificant effect breakage may have on a large payoff, and that his avg fig of 1.45% sounds very reasonable.

I also agree with DSB's fig of an avg of 5%.

Cangamble arrives at his fig using profits, or net, while DSB applies the breakage amount as a % of a two dollar wager.

Apples and oranges. Both posters are correct, since they are debating two different things. And the tracks should pay the exact amount due, regardless of the extra effort in handling pennies, but who/what will cause them to change their policy?

[A. Pineda]

Just to clarify, I do not consider the avg $2 in breakage lost on my avg $40 win wagers to be insignificant. Nor do I perceive my battle to be against a 22% takeout, but rather the 15-17% plus whatever the breakage is, as prevously stated by Cangamble.

[Cangamble]

You pay 17% when you make the bet, and you lose an average of up to 5% to breakage when you cash the bet. Unlike takeout, breakage is irrelevant to the losers; it's the winners that are affected. And you never know what it's going to be in advance, you can only expect an average.

Just because it's not deducted from the outset (and I never said it was) doesn't mean it isn't real and that it can't be expressed as a percentage of your bet. And it's money you don't get - PER DOLLAR - of what you bet.

Regardless of how much one bets or what kind of wager one bets, a winning bettor will lose approximately 5% of the amount he bet to breakage, when breaking to a dime.

Take is money removed before you win, and breakage is money removed after you win.

No matter how you look at it, both affect your wager and the amount of money you realize from the bet.

If I pay 34 cents to buy a $2 ticket, then get hit for an underpayment of 10 cents due to breakage, doesn't that add up to 44 cents or 22% of a $2 dollar bet?

This is what it cost ME, as a winner, to participate.

Breakage, as money you won but didn't get, affects your profits. That is the main point. And if you cash enough tickets, it can add up to serious money.

If you have another formula, let's hear it.
I think you need to read my examples. You are demonstrating horrible math here.

Breakage costs you on average either 10 cents per $2 bet cashed (breaking to the dime) or 5cents per $2 bet cashed (breaking to the nickel). That is it. It works out to an extra .5% takeout on everyone's bets tops.

I don't think you've bothered to look at my examples.

[Cangamble]

I agree with Cangamble's posts re the insignificant effect breakage may have on a large payoff, and that his avg fig of 1.45% sounds very reasonable.

I also agree with DSB's fig of an avg of 5%.

Cangamble arrives at his fig using profits, or net, while DSB applies the breakage amount as a % of a two dollar wager.

Apples and oranges. Both posters are correct, since they are debating two different things. And the tracks should pay the exact amount due, regardless of the extra effort in handling pennies, but who/what will cause them to change their policy?
You aren't losing 5%, but 5-10 cents on every cashed $2 ticket.

[A. Pineda]

You aren't losing 5%, but 5-10 cents on every cashed $2 ticket.

Exactly, as has been posted numerous times. However, DSB converts this fig to a pctg. of his wager. On the break to a dime he loses an additional 5% of his two dollar wager, on average.

[rrbauer]

Breakage occurs on every (winning) dollar bet, not in relation to the payoff, but on EVERY SINGLE (winning) DOLLAR bet.




Absolutly, positively WRONG. Breakage is a function of the payoff calculation. There is separate breakage for each bet type. When a payoff is calculated it is done on an "Odds to 1" basis. If a horse is 3-1 we all know that the payoff will be $8 and "something' for a $2 bet. Breakage affects the "something". If the something is anything other than an amount that can be divided evenly by a dime then it is reduced to an amount that can be divided by a dime. If there is $24,419 net (after takeout) in the win pool and there is $8000 bet on the winning horse (making the 3-1 odds on the board) then the odds are 3.0523 to 1. The .0523 (again, in most jurisdictions) is rounded down to 3.00 (then next lowest dime) and the odds then are then 3.00 and the $2 payoff is 3 X 2 (+ $2 Return of the bet) or $8 even.

I could go on and on about breakage and if you will check some of my posts on the subject going back a few years at this board you will get an education.

Now maybe we have a semantic difference here but what I have described is how it works.

[cj]

Breakage in a nutshell. Let us say after the takeout is deducted, there is $83,900 left for payouts. There is $20,000 bet on the winner, so $63,900 has to be divided up amongst the $10,000 $2 win tickets. That would be a profit of $6.39 per $2 ticket, or a payoff of $8.39.

At some tracks, that is rounded down to $8.20, at others $8.30. In the former, the tracks pays back 10,000 * 8.20, stealing $1,900 from the public. In the latter, they "only" steal $900.

[Pace Cap'n]

It is highly unlikey that any track could voluntarily reduce their breakage.

It would require the concurrance of the State Racing Commission (i.e. the government), and we all know how much the pols enjoy reducing their revenue.

[ezrabrooks]

Stealing might be a little harsh, as in Texas, it is a statutory part of the take out, with the Tracks not participating. It is the only part of the take out that even Rebates can't touch.

Ez

[cj]

I realize it is a part of the law, but I don't think tracks are rushing to have it overturned either.

[Pace Cap'n]

In CJ's example, the penalty is 2.26% for the dime breakage, and 1.07% for the nickel breakage.

BTW, 5% = .05
.5% = .005

[ezrabrooks]

I realize it is a part of the law, but I don't think tracks are rushing to have it overturned either.

You are correct...as, the breakage would have to made up some where else..which would probably result in higher take out.

Ez

[ezrabrooks]

In CJ's example, the penalty is 2.26% for the dime breakage, and 1.07% for the nickel breakage.

BTW, 5% = .05
.5% = .005

Humm, that was short and to the point. Congrats Cap'n.

Ez

[cj]

Of course the higher the odds, the less the percentage and vise versa. If you assume breakage averages in the middle and find the average payout of a pool, you can get a rough estimate of the cost of breakage.

I would say it is going to be about 1% on average for dime breakage and .5% on nickel breakage in the win pool. Place and show will be more, exotics less.

[so.cal.fan]

Isn't this just a good reason to never bet short prices?

[the little guy]

While I assumed it was implicit, but was wrong, it seems what is being missed in this thread is that exotic wagers allow a handicapper/horseplayer the opportunity to effectively reduce the takeout by extending their opinions into, theoretically, multiple pools while betting into a single takeout bet. For example, multi-race bets combine multiple opinions, some singular and some not, into a single play which, as has been explained, effectively disperses the takeout. Obviously the actual bet reduces the dollar amount of the takeout from the pool but it is your handicapping and wagering acumen that effectively disperses that. The same is true for single race exotics. For example, instead of a win bet, you could use one or more horses for second, while eliminating others, and thus make two bets, one to win and another to beat the rest of the field without your top selection. Triples and supers work the same way.

This is how exotic wagers afford the opportunity for a horseplayer to increase his returns, partly by effectively reducing the takeout, by making multi-opinion bets in a single takeout wager.

Contrary to what has been suggested in this thread, eliminating exotic wagering would do serious damage to this game ( to say the least ). Frankly, the player who doesn't learn to take advantage of these opportunities severely limits his or her opportunities to make money. I am guessing this is obvious to most people here. That is not to say that you can't make money making win bets ( I highly doubt anyone can making place and show bets ) but in doing so they are effectively playing in the largest takeout pool and, in all likelihood, hindering their possible returns.

[Cangamble]

Of course the higher the odds, the less the percentage and vise versa. If you assume breakage averages in the middle and find the average payout of a pool, you can get a rough estimate of the cost of breakage.

I would say it is going to be about 1% on average for dime breakage and .5% on nickel breakage in the win pool. Place and show will be more, exotics less.
It works pretty simple. When the payoff is to the dime, there are 10 possibilities. For example, an exactor for a deuce pays $48.40, the payoff was the result of a real payoff of $48.40,41,42....49 cents. So on average, the takeout is 5 cents per every $2 cashed bet, or 2.5 cents per every $1 base bet cashed.
Lets say you bet $10 exactors usually. Over enough time, you would miss out in 25 cents breakage per every winning $10 bet.

[Cangamble]

While I assumed it was implicit, but was wrong, it seems what is being missed in this thread is that exotic wagers allow a handicapper/horseplayer the opportunity to effectively reduce the takeout by extending their opinions into, theoretically, multiple pools while betting into a single takeout bet. For example, multi-race bets combine multiple opinions, some singular and some not, into a single play which, as has been explained, effectively disperses the takeout. Obviously the actual bet reduces the dollar amount of the takeout from the pool but it is your handicapping and wagering acumen that effectively disperses that. The same is true for single race exotics. For example, instead of a win bet, you could use one or more horses for second, while eliminating others, and thus make two bets, one to win and another to beat the rest of the field without your top selection. Triples and supers work the same way.

This is how exotic wagers afford the opportunity for a horseplayer to increase his returns, partly by effectively reducing the takeout, by making multi-opinion bets in a single takeout wager.

Contrary to what has been suggested in this thread, eliminating exotic wagering would do serious damage to this game ( to say the least ). Frankly, the player who doesn't learn to take advantage of these opportunities severely limits his or her opportunities to make money. I am guessing this is obvious to most people here. That is not to say that you can't make money making win bets ( I highly doubt anyone can making place and show bets ) but in doing so they are effectively playing in the largest takeout pool and, in all likelihood, hindering their possible returns.

If you just bet exactors as an average handicapper at a takeout of 20% versus win betting at 17%, you will lose more quickly betting exactors.

If you took exactor wheels for example, over betting flat, but bet the wheels so that you would cash exactly the same no matter who finishes second, you will wind up cashing less over time.

The only reason why exactors and other exotic bets can give handicappers an edge is that you can eliminate non contenders and enhance the potential win price.

[rrbauer]

The bottom line is that horseplayers are robbed of $150 Million each year via the breakage process. There was a time when there was some justification for breakage. That was when payoffs were calculated by hand and all bets were settled in cash. Neither is the case any more and the only justification that remains is that it survives because the receivers of its proceeds have more power than the payors. Of course there is no motivation on their part to change the "rules". Beyond the rounding-off of mils during the initial payoff calculation, it is "legalized" grand larceny.

[the little guy]

If you just bet exactors as an average handicapper at a takeout of 20% versus win betting at 17%, you will lose more quickly betting exactors.

If you took exactor wheels for example, over betting flat, but bet the wheels so that you would cash exactly the same no matter who finishes second, you will wind up cashing less over time.

The only reason why exactors and other exotic bets can give handicappers an edge is that you can eliminate non contenders and enhance the potential win price.


I'm surprised you don't understand exotic wagering.

[Cangamble]

I'm surprised you don't understand exotic wagering.
I wrote this in August on my blog:

Intuitively, if you make bets into a pool that offers a lower takeout, you would expect to do better in the long run. But when we are dealing with win bets versus multi-leg or other exotic bets, this is not the case.

The takeout on daily doubles averages around 20% across North America, while the takeout on win bets averages around 16% (http://spreadsheets.google.com/pub?key=phDghu8n5Ig5AuVsYpiPoIw&gid=0) (incidentally, Woodbine's takeout on win is 16.95%, and 20.5% on exactors; don't try finding those numbers at their site, it is a secret) (http://cangamble.blogspot.com/2008/08/horse-racing-lacks-proper-disclosure.html).

I wanted to devise a way to prove without a doubt that a gambler should expect a better return on daily doubles over the parlaying of two consecutive winners. I think I've found the way using a very simple example.

In my example, there are four horses in 2 consecutive races and each horse has attracted the exact same money bet on them, and each daily double combination has also attracted the same exact money bet on them as well. Each pool has also attracted exactly $10,000 bet.

In the win pool, $2,500 has been bet on each horse. The total amount the track will payout is $8,400 (taking the 16% or $1,600 the track takes out). 8,400 divided by 2,500 equals 3.36, which means the odds on each horse will show up as 2-1, but the payoff odds would be 2.35-1. Without breakage it would be 2.36-1, and jurisdictions where they pay off to the dime instead of the nickel, the payoff would be 2.30-1.

So for a $20 win bet, you would get back $67. Now if you parlayed the $67 onto the winner of the second race, you would get back $224.40 (actually $224.45 without breakage, but even if you could parlay without breakage, you would be parlaying $67.20 onto a horse that paid $6.72, you would get back $225.79)

Now for the Daily Double. There are 16 combinations, which means that there is $625 bet on each combination. The track will pay out only $8,000 ($10,000 minus the 20% takeout). 8,000 divided by 625 equals 12.8, which means that each daily double has a probable payoff of $25.60. So if you took a $20 daily double, you would get back $256.00.

$256.00 is more than 13% higher what you would get by parlaying both horses breakage or no breakage.

It is like magic.

Lets see what would happen if you took a $20 wheel versus an $80 straight be in the first race.

You would get back $256.00 for your daily double bet, but you would get back $268 if you bet the $80 to win (4.6% higher than the daily double return).

Confusing? You bet.

Regarding daily doubles, generally you can get better than the 13% overlay if you stay away from program picks or newspaper selected doubles. Another time you could expect an underlay is when one or more of the horses wins at over 20-1 and the pools are on the small side.

[Cangamble]

The bottom line is that horseplayers are robbed of $150 Million each year via the breakage process. There was a time when there was some justification for breakage. That was when payoffs were calculated by hand and all bets were settled in cash. Neither is the case any more and the only justification that remains is that it survives because the receivers of its proceeds have more power than the payors. Of course there is no motivation on their part to change the "rules". Beyond the rounding-off of mils during the initial payoff calculation, it is "legalized" grand larceny.
In a perfect world, we would get the breakage paid out to us so that we can churn it. Handles would definitely increase.

[the little guy]

The fact that you continue to discuss wheels just demonstrates that you don't get it. You really need to try to grasp this....or not.

[Cangamble]

The fact that you continue to discuss wheels just demonstrates that you don't get it. You really need to try to grasp this....or not.
If you were the entire pool. And you bet $10,000 in triactors and $10,000 in win bets, after the race, you would have more money from you win cashes.

[the little guy]

If you were the entire pool. And you bet $10,000 in triactors and $10,000 in win bets, after the race, you would have more money from you win cashes.


This reminds me of someone's recent analogy here about people believing the world is flat.

Who knows.....maybe it is.

[Cangamble]

This reminds me of someone's recent analogy here about people believing the world is flat.

Who knows.....maybe it is.
You'll have to explain to me why I'm wrong. I'm not trying to be obtuse here.

[the little guy]

You'll have to explain to me why I'm wrong. I'm not trying to be obtuse here.


I already explained it. The rest is up to you.

You might want to take a look at a real life situation......check out how much exactas pay, in general, when the favorite finishes second, and think about these payoffs from an expected value perspective based on the betting odds of the first two finishers......especially when the second finisher is odds-on.

[Cangamble]

I already explained it. The rest is up to you.

You might want to take a look at a real life situation......check out how much exactas pay, in general, when the favorite finishes second, and think about these payoffs from an expected value perspective based on the betting odds of the first two finishers......especially when the second finisher is odds-on.
Steven Crist covers that point rather well in Exotic Betting. But his biggest point is that exotics are worth it because of selective handicapping and eliminations that can be made.

[the little guy]

Steven Crist covers that point rather well in Exotic Betting. But his biggest point is that exotics are worth it because of selective handicapping and eliminations that can be made.


You obviously didn't even read my earlier post.

[Imriledup]

The bottom line is that horseplayers are robbed of $150 Million each year via the breakage process. There was a time when there was some justification for breakage. That was when payoffs were calculated by hand and all bets were settled in cash. Neither is the case any more and the only justification that remains is that it survives because the receivers of its proceeds have more power than the payors. Of course there is no motivation on their part to change the "rules". Beyond the rounding-off of mils during the initial payoff calculation, it is "legalized" grand larceny.

Until the horseplayers have a real voice (i.e lots of money for bribes) than they will continue to get crushed like grapes.

[Niko]

TLG; I can't figure it out myself either. Sometimes I get stuck on things that are obvious to others.

I understand I'm making "two" bets in the exacta. I'm making a bet based on the odds of the winner and then making another bet based on the odds of each horses chance of finishing second in relation to the winning horse (odds for second are different than odds to win based on the winner). If you do this better than others, limit combinations and play overlays you make money. You may have a better chance of overcoming a 20% take than a 15% win take because you better understand these odds in the race and know how to play your tickets. Thus an easier take to overcome for some just like those players specializing in the tri or super with an even higher take.

But I've never gotten past the fact that if I'm an average fan and get average results and the exacta take-out is 20%, I'll lose $20 for every $100 I bet overall. If the tri take is 25% I'll lose $25 of $100 and if the win take-out is 15%, I'll lose $15 on average out of $100 (not counting breakage and successive bets). This is if you eliminate the skill of the player and just talk straight take-out.

Are you both right and talking about different things? Is there someone else who has a different approach for Cangamble or myself to understand where we err?

[the little guy]

It's tricky, and I'm tired, but I still imagine the takeout dispersal should make your suggested results better, but I don't know for sure whether your suggested " average " opinion will be enough to overcome the increased takeout in exotics.

Somebody more awake, or smarter, will have to help you on that one. I guess my basic tenet relies on being at least able to partially overcome the takeout, but it still should better your results through exotics ( even falling asleep I think this is the case ).

[chickenhead]

I think the bigger effect than spreading the takeout should be the effects from the increase in degree of difficulty. Combining your opinions and betting them as a group makes the gaps between players bigger. It should act like leverage (which is not good for everyone).

[InsideThePylons-MW]

Maybe we can have a bunch of tracks on a weekend have a Pick-100

If we get enough races in the sequence, it could possibly make the takeout almost 0%.

:p

[Brogan]

It never ceases to amaze me how many people throw money through the windows with only a limited understanding of how the whole process works.

DSB is exactly correct with his ABC's of wage payoff calculations. Takeout is applied to every dollar bet, breakage affects every dollar collected by winning bets. His takeout AVERAGES are correct, depending on whether that jurisdiction breaks to the nickel or dime (funny how in racetrack parlance, breaking to a dime if called breaking to an "even nickel"...just more smoke).

Someone way back in this thread said betting a double is the same as betting an exacta...its still a two horse bet. Whoever you are, save your money and stop betting until you understand its significantly harder to pick two winners than it is to pick a winner and place horse in the same race.

As to the concept of eliminating breakage...don't count on that ever happening. Wherever the breakage revenue is currently earmarked in your jurisdiction, it is still revenue generated. It won't merely be eliminated because its unfair. That revenue would need to be replaced somewhere, somehow. Guess who would foot the bill? That's right, the bettor.

[the little guy]

Someone way back in this thread said betting a double is the same as betting an exacta...its still a two horse bet. Whoever you are, save your money and stop betting until you understand its significantly harder to pick two winners than it is to pick a winner and place horse in the same race.




I love this.

First post no less.

[SMOO]

Maybe we can have a bunch of tracks on a weekend have a Pick-100

If we get enough races in the sequence, it could possibly make the takeout almost 0%.

:p

Please don't say that, someone in charge might actually do it. :lol:

[Cangamble]

His (DSB) takeout AVERAGES are correct
******************
Are you actually agreeing that breakage causes the same affect as upping the takeout by 2.5-5%? I've already proved that wrong quite a few times here.

Someone way back in this thread said betting a double is the same as betting an exacta...its still a two horse bet. Whoever you are, save your money and stop betting until you understand its significantly harder to pick two winners than it is to pick a winner and place horse in the same race.
************************
That is a pretty brazen statement. At Woodbine the average exactor paid $108.71, while the average double paid $108.32. Sometimes exactors are easier to pick, and sometimes consecutive winners are easier. It depends on the size of the fields, and the competition, but just looking at averages at Woodbine, it seems that on average you should expect 53-1 if you made random selections, or collectively picked like the public does.

As to the concept of eliminating breakage...don't count on that ever happening. Wherever the breakage revenue is currently earmarked in your jurisdiction, it is still revenue generated. It won't merely be eliminated because its unfair. That revenue would need to be replaced somewhere, somehow. Guess who would foot the bill? That's right, the bettor.
*************************
The money returned would actually be churned until lost by the customer, so the bottom line would be at least exactly the same, except the handles would increase.

[DSB]

This thread has drawn a lot of responses and lot of varying opinions.

Here's my take on breakage:

Anyone who makes his breakage calculations based on a percentage of the entire pool is prima facie incorrect.

Breakage does not even exist until the pool is closed, the takeout extracted, the race official and the odds calculated. At this point, any breakage that may exist comes from the winners and is accounted for on a per dollar bet basis. The range for tracks that break to a dime is anywhere from just over zero to just under 10% of the original wager. The average is just under 5%

Anyone who wants to say "the average breakage is 5 cents on a $2 bet at a venue that breaks to a nickle" is correct. Just as correct is the fact that the amount represents 2.5% of the original wager. Same thing said in two different ways.

The effect breakage has on a bet and the way it's calculated are seperate questions.

Effect is largely subjective. A guy who takes down the whole trifecta pool for a buck won't consider the nickle he lost to breakage a major deal. The guy who bet $200 to show and lost $10 while cashing a mutuel of $2.10 probably would. The way these two guys view breakage is likely to be proportional to how badly their respective oxen are being gored. But, they are both being gored, and at the same rate.

The way breakage is calculated is objective. It's going to hit both guys in the above example at the same RATE - an average of 5% of their bets, when breaking to a dime.

Here's my view of exotics:

In single race exotics, it will always cost a bettor more to make an exotic bet than a w,p,s bet in the same race, because the takeout rates are higher for exotics. The number of horses involved in the exotic, the possibility of greater payoffs, etc., is irrelevant. End of story.

In multiple race race wagers, the exotic will generally be a better bet than a corresponding parlay. I did the math for a pick 3 vs. a three horse parlay in an earlier post, and it's obvious that the same amount of money parlayed would lose much more to takeout than the pick 3.

The test is this: would the ractrack prefer that a group of bettors make pick 3 bets or have those bettors wager the same amount on a 3 horse parlay?

The track would make nearly double on the parlay, so that should reveal something. If it's good for the track, it's bad for the bettors.

For the record, I also think that you give up flexability when you bet a multi-race exotic. Once the bet is made, the ship has sailed. If you need to make adjustments after the first or second leg, tough. You're all in.

Now, some have suggested that takeout is altered or negated by player skill. They've said that exotics give a skillful player chances to unearth choice opportunities for overlays, etc.

Well this may be the case. But, when anyone cashes a bet of any kind, isn't that equally considered as "overcoming the take"? At the end of the day, doesn't all just come down to profits and losses?

Player skill has nothing to do with takeout. They are two seperate things.

The skillful guy who bets into a pick three pool pays the same cut that the guy who plays his birthday. They both get hit at the same rate.

In my estimation, there are only two sure ways to overcome take.

1. When there is a carryover. If the amount of the carryover is large enough, it will have a serious affect on payoffs, thereby effectively lowering take by providing an automatic overlay.

2. When there is a pool wherein the amount of money available to winning tickets doesn't support a $2.10 payoff. In that instance, it could be argued that the winning bettor is receiving money in excess of what he would be entitled to if minimum payout laws hadn't intervened. Whether or not this is a good bet is debatable; this is not the issue.

One other thing that has not been mentioned during this discussion of takeout and breakage. Has anyone ever stopped to think about how it is that bettors always have their original wager, intact, returned to them when they win a bet?

Once a bet is made, that money is cut along with all other money in the pool, yet when it's returned it is an even dollar.

If you surrender 17% on a win bet, the two bucks you bet are now $1.66.

When you win, the 34 cents you gave up to make the bet is replaced out of the money you just won.

Using these numbers, don't you have to make more than a 20% profit just to break even on your original bet?

The math of this game is why nobody wants to bet on horses anymore.

[DanG]

I think the bigger effect than spreading the takeout should be the effects from the increase in degree of difficulty. Combining your opinions and betting them as a group makes the gaps between players bigger. It should act like leverage (which is not good for everyone).
Winner / winner / chicken dinner! :ThmbUp:

Don’t even know what that popular saying is from, but it applies here.

[Cangamble]

OK DSB, I agree with everything in that post except for "The way breakage is calculated is objective. It's going to hit both guys in the above example at the same RATE - an average of 5% of their bets, when breaking to a dime."
**********************
It should read "their winning bets."

And it doesn't ramp up takeout by 2.5%, 5%, or 10%. Collectively, it ups the takeout by around .5%, less if you bet exotics, and more if you bet mainly win place and show.

Four horse race. $100,999 in the pool. Horse 1 has 21k bet on him, same with horse 2, same with horse 3, while horse 4 has 37,999 bet on him. Takeout is 16%, and horse 1 wins.

10,999 times .84=84,839.16 to be divided to the winning tickets. There are 10,500 winning $2 ticket. This means that each horse should pay $8.07992, but of course, it only pays $8.00 The track just made 839.16 in free money (breakage). In fact, they charged takeout on their own money (the $999 that wasn't going back to the customer if the 1 horse won).

But the point here is to look at the actual takeout charge to the customer in this case.

Simply take the 84000 and divide by 100,999 which equals .83169, subtract that total from 1 and the takeout in this case was 16.83%

[Cangamble]

I just did some quick research and I could only find two jurisdictions that break to the nickel. Canada and New York. Does anyone know any others?

Funny thing is that most of the other jurisdictions have no problem paying $2.10 to show.....

[the little guy]

The math of this game is why nobody wants to bet on horses anymore.




Really? Nobody wants to bet the horses anymore? How does the current handle compare to the handle in those great days you harken for?

[DSB]

OK DSB, I agree with everything in that post except for "The way breakage is calculated is objective. It's going to hit both guys in the above example at the same RATE - an average of 5% of their bets, when breaking to a dime."
**********************
It should read "their winning bets."

And it doesn't ramp up takeout by 2.5%, 5%, or 10%. Collectively, it ups the takeout by around .5%, less if you bet exotics, and more if you bet mainly win place and show.

Four horse race. $100,999 in the pool. Horse 1 has 21k bet on him, same with horse 2, same with horse 3, while horse 4 has 37,999 bet on him. Takeout is 16%, and horse 1 wins.

10,999 times .84=84,839.16 to be divided to the winning tickets. There are 10,500 winning $2 ticket. This means that each horse should pay $8.07992, but of course, it only pays $8.00 The track just made 839.16 in free money (breakage). In fact, they charged takeout on their own money (the $999 that wasn't going back to the customer if the 1 horse won).

But the point here is to look at the actual takeout charge to the customer in this case.

Simply take the 84000 and divide by 100,999 which equals .83169, subtract that total from 1 and the takeout in this case was 16.83%

This is as close as we are going to come to agreement on the subject.

As for "winning bets", it was implicit from my example. Both guys won their respective bets, so I thought it was understood they were "winning bets"

I agree with your math right up until the time you apply the 839.16 breakage.

You choose to view breakage as a percentage of the pool.

I choose to view it as a percentage of each dollar I bet.

In my case it would be 3.996%, about 1% less than I could expect, on average.

To each his own. Like I said, the effect of breakage is subjective. I apparently see it as more of a threat to my profits than others.

[Cangamble]

This is as close as we are going to come to agreement on the subject.

As for "winning bets", it was implicit from my example. Both guys won their respective bets, so I thought it was understood they were "winning bets"

I agree with your math right up until the time you apply the 839.16 breakage.

You choose to view breakage as a percentage of the pool.

I choose to view it as a percentage of each dollar I bet.

In my case it would be 3.996%, about 1% less than I could expect, on average.

To each his own. Like I said, the effect of breakage is subjective. I apparently see it as more of a threat to my profits than others.
Your original statement that it ups takeout from 17% to 22% is just plain wrong. No matter how much which way you want to view it.

[DSB]

Your original statement that it ups takeout from 17% to 22% is just plain wrong. No matter how much which way you want to view it.


Again, you are quoting something I never said. Not surprising, really.

I never said that it "ups takeout". I said that MY bets break even with 17% takeout and 5% breakage.

Since you can't be affected by breakage unless you win, I'm obviously talking about my WINNING bets. Therefore my WINNING bets are cut by 17% then subject to nearly 5% breakage on average, get it?

I tried to be diplomatic about this and give you an out. Apparently you are just too damn dumb to accept it and put it to rest.

I guess I should have expected it after seeing your math for last few days.

Ya know what? Don't bother me with this anymore. It's become about as interesting as a root canal.

[Cangamble]

Again, you are quoting something I never said. Not surprising, really.

I never said that it "ups takeout". I said that MY bets break even with 17% takeout and 5% breakage.

Since you can't be affected by breakage unless you win, I'm obviously talking about my WINNING bets. Therefore my WINNING bets are cut by 17% then subject to nearly 5% breakage on average, get it?

I tried to be diplomatic about this and give you an out. Apparently you are just too damn dumb to accept it and put it to rest.

I guess I should have expected it after seeing your math for last few days.

Ya know what? Don't bother me with this anymore. It's become about as interesting as a root canal.
This is your ACTUAL QUOTE:

"I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%"

http://www.paceadvantage.com/forum/...72&postcount=17 (http://www.paceadvantage.com/forum/showpost.php?p=640072&postcount=17)

*****************************
I must be dumb to understand what you really meant with that statement.

To expand a bit. If you are saying your ROI is .78, then you are not even an average handicapper. And average handicapper would have an ROI at .825 based on a 17% takeout and a .5% breakage.

[DSB]

This is your ACTUAL QUOTE:

"I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%"

http://www.paceadvantage.com/forum/...72&postcount=17 (http://www.paceadvantage.com/forum/showpost.php?p=640072&postcount=17)

*****************************
I must be dumb to understand what you really meant with that statement.


No, actually you are dumb NOT to know what I meant by that statement.

[Cangamble]

No, actually you are dumb NOT to know what I meant by that statement.
If you are saying your ROI is .78, then you are not even an average handicapper. And average handicapper would have an ROI at .825 based on a 17% takeout and a .5% breakage.

The way you handle the math with respect to breakage, it isn't a shocker that you have a .78 ROI btw.

[DSB]

If you are saying your ROI is .78, then you are not even an average handicapper. And average handicapper would have an ROI at .825 based on a 17% takeout and a .5% breakage.

The way you handle the math with respect to breakage, it isn't a shocker that you have a .78 ROI btw.

So now you want to attack my handicapping ability.

If you want to do that, don't use a betting example. Handicapping and betting are two seperate things. Did anyone ever explain that to you?

I know our educational system in the U.S. is lacking, but apparently it's better than Canada's. Or is it the water up there?

[Cangamble]

So now you want to attack my handicapping ability.

If you want to do that, don't use a betting example. Handicapping and betting are two seperate things. Did anyone ever explain that to you?

I know our educational system in the U.S. is lacking, but apparently it's better than Canada's. Or is it the water up there?
I was going to say betting, but it was implicit in what I was saying. Especially when betting win, handicapping and betting come very close together in this case over a long period of time.

Bottom line, using my example of 16% takeout. If you were the entire pool and made all the bets within that example, your ROI would be .83169, not .78 which you obviously believe.

[DSB]

I was going to say betting, but it was implicit in what I was saying. Especially when betting win, handicapping and betting come very close together in this case over a long period of time.

Bottom line, using my example of 16% takeout. If you were the entire pool and made all the bets within that example, your ROI would be .83169, not .78 which you obviously believe.

Man, this is really getting funny.

If I said that my bets are break even, I would think that even someone as mathematically challenged as you knows what that means.

If "you're the entire pool", and there is a takeout, you can't break even, can you?.... man.. this is getting to be an exercise in retardation.....lol.

[Cangamble]

Man, this is really getting funny.

If I said that my bets are break even, I would think that even someone as mathematically challenged as you knows what that means.

If "you're the entire pool", and there is a takeout, you can't break even, can you?.... man.. this is getting to be an exercise in retardation.....lol.
Does this statement by you mean your ROI is .78?
"I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%"

Simple, yes or no? Or is it 1.00 and you "think" you are overcoming a 22% takeout?

[Niko]

when two people have different opinions and can't convince the other, why does it always seem to resort to 5th grade tactics of name calling to protect the ego?

I don't think I'm learning anything from the personal attacks.....

[Cangamble]

when two people have different opinions and can't convince the other, why does it always seem to resort to 5th grade tactics of name calling to protect the ego?

I don't think I'm learning anything from the personal attacks.....
Niko, do you think that breakage cause takeout to ramp up from 17% to 22% on average, or do you get my math?

[DSB]

Does this statement by you mean your ROI is .78?
"I've long known that personally my flat bet wagers are about break even at the current rates of takeout. 17% plus an average of almost 5% breakage = 22%"

Simple, yes or no? Or is it 1.00 and you "think" you are overcoming a 22% takeout?

Go back to a post I made earlier this morning.

For you to break even on a win bet at 17%, you'd have to win more than 20% to break even. And that's before breakage.

After the takeout, your original $2 bet would be whittled down to $1.66, and you'd have to win 34 cents - about 20.5% to break even.

If you are breaking even on your bets, you are overcoming the takeout and breakage. Geez... how can this be so difficult to understand?

Does Canada have a different math system? Is it metric in some way?

[Cangamble]

Go back to a post I made earlier this morning.

For you to break even on a win bet at 17%, you'd have to win more than 20% to break even. And that's before breakage.

After the takeout, your original $2 bet would be whittled down to $1.66, and you'd have to win 34 cents - about 20.5% to break even.

If you are breaking even on your bets, you are overcoming the takeout and breakage. Geez... how can this be so difficult to understand?

Does Canada have a different math system? Is it metric in some way?
You are backtracking on your original statement: 17% plus an average of almost 5% breakage = 22%
Using a 17% takeout, and adding the .5% breakage average to, you do need to win exactly 1.2121212121...% to break even.

[DSB]

You are backtracking on your original statement: 17% plus an average of almost 5% breakage = 22%
Using a 17% takeout, and adding the .5% breakage average to, you do need to win exactly 1.2121212121...% to break even.

Absolutely not, and for reasons I've stated ad nauseum.

And for some reason you insist on using .5% breakage (one half of 1%). Use that figure when calculating your returns if you like.

Use 5% (five percent) when you address mine.

I like to be correct.

[DSB]

Oops, time to go to work.....

Feel free to bash me all afternoon if you like. I'll address it when I get home tonight....

[Cangamble]

Absolutely not, and for reasons I've stated ad nauseum.

And for some reason you insist on using .5% breakage (one half of 1%). Use that figure when calculating your returns if you like.

Use 5% (five percent) when you address mine.

I like to be correct.
You are beating yourself on the chest like a monkey in a zoo.

You haven't pointed out anything that makes my math wrong. Nothing.
But keep playing. I'm starting to enjoy this, though I was at first a little annoyed, now I've come to the conclusion that you are straight jacket material. It is kind of like watching Cuckoo's Nest when you post.:lol:

[badcompany]

Winner / winner / chicken dinner! :ThmbUp:

Don’t even know what that popular saying is from, but it applies here.

You remind me of the Black Knight from Monty Python and the Holy Grail.

No matter what the industry does to you, you act as though, "It's just a flesh wound!"

http://www.mchenrycountyblog.com/uploaded_images/Monty-Python-Black-Knight-with-one-arm-off-794329.jpg

[Cangamble]

Oops, time to go to work.....

Feel free to bash me all afternoon if you like. I'll address it when I get home tonight....
I'll give you one more question, and I hope you will answer it when you get back.

If the takeout is 17% on win, what is the average ROI for all bettors when you take breakage into consideration?

I say it is .825 and I've proven it with my example using the $100,999 pool.

[DanG]

You remind me of the Black Knight from Monty Python and the Holy Grail.

No matter what the industry does to you, you act as though, "It's just a flesh wound!"

http://www.mchenrycountyblog.com/uploaded_images/Monty-Python-Black-Knight-with-one-arm-off-794329.jpg
Classic BC; :D

It serves little purpose to come on here and rail about something that I have chosen to overcome. (Although I have more then once) No one makes me gamble on horse races and I have written to track and elected officials (on the obscene taxation) more then most.

Sorry if I’m not meeting your expectations, but if your approach is helping our game…I’m with you 100%. :ThmbUp:

If we follow the Monty Python script I guess this means you will “taunt me for a 2nd time.”

[Niko]

Niko, do you think that breakage cause takeout to ramp up from 17% to 22% on average, or do you get my math?

I'll plead ignorance to the exact math.

I see you're both coming at it from a different approach...

All I know is that if a track has say a 15% take out on win bets, the average losses on all winners will be above 17% or where ever it actually falls due to breakage. I don't have any results in front of me.

So the track take is misleading. Just another hurdle for the player to overcome

[Imriledup]

I have a good idea.....an idea that no one has thought of yet. How about we eliminate breakage.

[Brogan]

I love this.

First post no less.

What's your point? Is there some minimum number of posts required to have an opinion?

[Cangamble]

I'll plead ignorance to the exact math.

I see you're both coming at it from a different approach...

All I know is that if a track has say a 15% take out on win bets, the average losses on all winners will be above 17% or where ever it actually falls due to breakage. I don't have any results in front of me.

So the track take is misleading. Just another hurdle for the player to overcome
Niko, read this post, and you'll see that it isn't as bad as you think it is:
http://www.paceadvantage.com/forum/showpost.php?p=641868&postcount=107

[Brogan]

Your calculation applies the breakage retained to the entire pool. Apply it only to the amount wagered on the winning horse and your correct percentage is now 3.996%.

The breakage only affects winning wagers.

Using your own example, you start out by battling a 16% takeout and then have your winnings clipped by 4%.

Its somewhat of an apples and oranges comparison, but everyone pays the takeout, only winning bets pay the breakage.

[DSB]

Your calculation applies the breakage retained to the entire pool. Apply it only to the amount wagered on the winning horse and your correct percentage is now 3.996%.

The breakage only affects winning wagers.

Using your own example, you start out by battling a 16% takeout and then have your winnings clipped by 4%.

Its somewhat of an apples and oranges comparison, but everyone pays the takeout, only winning bets pay the breakage.

Brogan: Do yourself a favor and stop applying sound mathematics to this.

It will only get you into a quagmire you'll never be able extrictate yourself from....

[PaceAdvantage]

I haven't had the time to read through this thread word for word, but I would like to get a general sense of what has happened here. So, would a long standing member of the forum whom I trust (and you know who you are) give me the Cliffs Note version of what is going on here via PM?

Thanks.

[sly fox]

in theory

I had a $2 ticket in Cangams example
should have got back in round numbers

$8.08 but only got $8.00

0.08 cents was taken from me or 1%

therefore 16% takeout plus 1% = 17%


cheers

[Brogan]

$0.08 divided by your $2.00 bet = 4%

[miesque]

in theory

I had a $2 ticket in Cangams example
should have got back in round numbers

$8.08 but only got $8.00

0.08 cents was taken from me or 1%

therefore 16% takeout plus 1% = 17%


cheers

Thats the way I look at it, which means the impact of breakage is much more significant for short priced payouts then larger payouts. As a result, it would seem to me that those that are most impacted are the WPS bettors while those who concentrate on wagers such as Trifectas and Pick 4s, the effect is more muted.

[Pace Cap'n]

Simply take the 84000 and divide by 100,999 which equals .83169, subtract that total from 1 and the takeout in this case was 16.83%

An increase from 16% to 16.83% is a percentage increase of 5.19%. Not .5%.

[Pace Cap'n]

OP thinks breakage is a real bitch. Poster CG agrees, but not to the extent posited by the OP.

Many posts exchanged using maths to support each side. A few jabs exchanged, but nothing serious. It may be they are each arguing the same side of the coin, so to speak.

Other posters have made it near unanimous that breakage sucks, and see little than can be done about it.

[sly fox]

An increase from 16% to 16.83% is a percentage increase of 5.19%. Not .5%.

When you state it like that you confuse
people into thinking the takeout is now
16% plus 5% = 21%

cheers

[sly fox]

$0.08 divided by your $2.00 bet = 4%


what does my $2 bet come into this????

I should have rec'd $8.08 but with
breakage got only $8.00 the difference
between the two payoffs is 1% ( one
percent)

cheers

[Brogan]

what does my $2 bet come into this????

I should have rec'd $8.08 but with
breakage got only $8.00 the difference
between the two payoffs is 1% ( one
percent)

cheers

Because you calculate your profits or losses based on the amount you wager.

Yes, the difference between the two payoffs is roughly a point apart, but the base number is your original wager.

[Cangamble]

Here is another blurb on breakage: http://horseracing.about.com/library/blbreakage.htm

She has the right idea. Except the average is 10 cents, not 9.5 cents.

[Cangamble]

An increase from 16% to 16.83% is a percentage increase of 5.19%. Not .5%.
The average ROI for everyone betting into a 16% is approximately .835, and not .84 thanks to breakage.

[sly fox]

Here is another blurb on breakage: http://horseracing.about.com/library/blbreakage.htm

She has the right idea. Except the average is 10 cents, not 9.5 cents.



Bingo, CanGam

[Pace Cap'n]

OP thinks breakage is a real bitch. Poster CG agrees, but not to the extent posited by the OP.

Many posts exchanged using maths to support each side. A few jabs exchanged, but nothing serious. It may be they are each arguing the same side of the coin, so to speak.

Other posters have made it near unanimous that breakage sucks, and see little than can be done about it.

Wow, my bad... I just realized I confused the original poster with another. The first sentence should read "DSB thinks..."

[DSB]

Really? Nobody wants to bet the horses anymore? How does the current handle compare to the handle in those great days you harken for?

Geez... you don't really want to go there, do you?

As far as handle goes, the books at Belmont used to handle up to $5 million on track during the depression. Adjusted for inflation, what would that be today? $25 million? $50 million? I think Aqueduct handled less than half a mil on track yesterday.... thank god for simulcasting, phone bets and computers, huh?

Tracks that averaged $1 million in the fifties and sixties had it all bet on track and those dollars were worth a hell of a lot more than a dollar is today.

With regard to attendance, one of my favorite tracks averaged 30,000 in the late fifties, early sixties - Garden State Park. I'm not sure what their attendance is nowadays.... can you help me out with that?

My guess its on a par with Atlantic City, Bowie, Hialeah, Aksarben, and a number of others.

Yeah, no doubt about it, you got me on this one. Attendances and handles are so good these days that tracks have never been in better shape.

What was I thinking?

[the little guy]

Geez... you don't really want to go there, do you?

As far as handle goes, the books at Belmont used to handle up to $5 million on track during the depression. Adjusted for inflation, what would that be today? $25 million? $50 million? I think Aqueduct handled less than half a mil on track yesterday.... thank god for simulcasting, phone bets and computers, huh?

Tracks that averaged $1 million in the fifties and sixties had it all bet on track and those dollars were worth a hell of a lot more than a dollar is today.

With regard to attendance, one of my favorite tracks averaged 30,000 in the late fifties, early sixties - Garden State Park. I'm not sure what their attendance is nowadays.... can you help me out with that?

My guess its on a par with Atlantic City, Bowie, Hialeah, Aksarben, and a number of others.

Yeah, no doubt about it, you got me on this one. Attendances and handles are so good these days that tracks have never been in better shape.

What was I thinking?


Simulcasting, phone betting and computers are the reason the on-track handle and attendance are low. You did know that....right?

[DSB]

It's the reason the combined handle at Aqueduct was $5.5 million yesterday, also. You can't have both sides of the argument.

More people have access to horse betting than ever, and the population has more than doubled since the "days I harken for". Not very impressive, if you ask me.

If you think racing is such a booming business and everyone loves to bet horses, why are so many tracks in dire financial straits? why do so many of the tracks in the country need slots to survive?

20 years or so ago, I knew plenty of people who were regular tracks patrons. They didn't die, they just don't bet horses anymore. The numbers don't lie, and if you are suggesting that racing is as popular as ever, then you are ignoring just about every study that's been done over the past two decades that show racing is on the decline.

But as you're fond of saying "that's your prerogative."

[kenwoodallpromos]

The tracks want you to think that since the breakage remains the same .05 or .10 for all bets that you are just as well off betting the low odds horses, and that the takeout discourages betting on exotics. The truth is that the same computers that do not how to payoff to the penny cannot figure out how to vary breakage properly to comensate for longer odds horses, and cannot figure out how to adjust takeout to make it equitable for the various types of exotics.
Also, it is a psych trip to get people to bet where the tracks take out the most between takeout and breakage. That is why either way betting overlays is best regardless of odds or race type!
IMO, the best change would be to hold all money bet on the officially longest odds horse in the daily "feature" race if that horse loses, and have a carryover until the official longest odds feature race horse wins.

[Cangamble]

The tracks want you to think that since the breakage remains the same .05 or .10 for all bets that you are just as well off betting the low odds horses, and that the takeout discourages betting on exotics. The truth is that the same computers that do not how to payoff to the penny cannot figure out how to vary breakage properly to comensate for longer odds horses, and cannot figure out how to adjust takeout to make it equitable for the various types of exotics.
Also, it is a psych trip to get people to bet where the tracks take out the most between takeout and breakage. That is why either way betting overlays is best regardless of odds or race type!
IMO, the best change would be to hold all money bet on the officially longest odds horse in the daily "feature" race if that horse loses, and have a carryover until the official longest odds feature race horse wins.
Most people don't even think about breakage. And it is 100% true that on average breakage is 5 or 10 cents per $2 bet cashed.
As far as I know, tracks to try to get us to think anything regarding breakage or takeout. And from a racetrack standpoint, the less the takeout the more likely the returned money will be churned until lost anyway.

[PaceAdvantage]

If you think racing is such a booming business and everyone loves to bet horses, But...but...but.....TLG never stated such a thing...

[DSB]

Really? Nobody wants to bet the horses anymore? How does the current handle compare to the handle in those great days you harken for?

This is what he said in response to my statement that "the math of racing is why nobody wants to bet horses anymore"

If anyone wants to compare current handles and attendances to those of 40-50 years ago, the truth is, there is no comparison.

Adjusted for inflation, the handles of "those great days I harken for" dwarf todays.

Did he use the exact words? No.

Still there is no doubt what his intimation was.

[PaceAdvantage]

Still there is no doubt what his intimation was.Ummm...there's plenty of doubt, or at least there should be on your end.

TLG's a smart guy. Smart guys don't think racing is a BOOMING BUSINESS and that EVERYONE loves to bet the horses.

I don't know why I must point out the obvious. Posters who require me to point out the obivous make me wary.

[Brogan]

I don't know why I must point out the obvious. Posters who require me to point out the obivous make me wary.

Board admins that interpret what other people mean makes me wary.

Can I ask why you inserted yourself here?

[PaceAdvantage]

Board admins that interpret what other people mean makes me wary.

Can I ask why you inserted yourself here?Because it's my website.

People who ask me why I post on my own website also make me wary.

[Brogan]

And for a just a moment I thought this board would be different.

I'll give it this, it's generally more literate than other racing forums.

[PaceAdvantage]

And for a just a moment I thought this board would be different.I'm sure you did.

You know, in my almost ten years of doing this, you can't imagine how many times someone has uttered the above Brogan quote just before saying something really stupid and getting themselves kicked off. Well, either that, or posting the mandatory "I'm leaving" thread/post.

Are you going to continue the trend Brogan?

[Brogan]

I don't know...are you going to continue to make assumptions about what people think and/or mean?

[PaceAdvantage]

I don't know...are you going to continue to make assumptions about what people think and/or mean?I didn't make any assumptions. I pointed out the obvious.

[Brogan]

Isn't it generally better to let people speak for themselves? Particularly in this case, the parties are expressing themselves well.

[DSB]

Ummm...there's plenty of doubt, or at least there should be on your end.

TLG's a smart guy. Smart guys don't think racing is a BOOMING BUSINESS and that EVERYONE loves to bet the horses.

I don't know why I must point out the obvious. Posters who require me to point out the obivous make me wary.

I happen to be a smart guy too. I'll put my knowledge of the sport up against anyone's. Including those who enjoy special protection here.

I didn't ask for a debate on whether or not racing was more prosperous today than it was decades ago. Somebody asked me to compare handle today to handle in "the days I harken for", which is what I prefer to call "the days when racing was fair to the bettor" - the period when take was 10%-12%. Presumably, the comparison was to prove that my statement "the math of racing is why nobody bets horses anymore" was incorrect. Why handle was chosen and not the number of people betting, which I would think should be the standard for disproving the statement, I couldn't tell you. No matter. A terrific argument could be made that less people are betting, too.

Anyway, I took the challenge and pointed out that despite the myriad of avenues people have for making bets today, handles are lower today than they were "in days I harken for". Adjusting for inflation, handle today is less than 1/7 of a comparable handle in 1957 (this is just before takes started to rise to the levels we "enjoy" today).

The handle on Belmont Park on Tuesday, Oct. 11, 1957 was $1,760,160 for an 8 race card. Weather: clear, Track: fast.

When was the last time Belmont handled $13,225,817 on a weekday card for 8 races? Because that's what they would need to equal the $1.76 million handle in 1957. And this money was bet on-track. People actually had to get off their asses and go there to bet, unlike today.

This is not an isolated example. It's representative of the industry as a whole. The average handle for the fall 1957 Belmont meet was just under $2 million a day. That would be about $15 million in today's dollars. Is that Belmont's average handle in their fall meet nowadays?

Since we are doing comparisons here, why not examine the number of people betting?

This becomes more difficult to prove because not everyone betting can be accounted for not only today, but especially in 1957, also. I'm fairly certain that in light of the better comparable handles, the comparable number of people betting then exceeds the number today, and probably to a significant degree.

A good argument could be made that most people could be accounted for today because the majority of people have a legal way to bet. They either go to the track or have an account somewhere.

How does that compare to 1957? On track attendances were excellent then. Belmont's fall average attendance was 22,321. What can't be accounted for are the additional thousands upon thousands of people who bet with bookies (remember them?) in those days. No OTB's, no phone accounts, no online betting, etc., just bookmakers. And they were all over the country. In most bars, factories, and offices. How many people religiously bet a couple of bucks with them?

And, the vast majority of that money NEVER made it to the mutuel pools. So what was the REAL handle for Belmont in those days, adjusted for inflation? $25 million? $50 million? More?

Long before tracks adopted exactas and trifectas, bookies were taking parlays, round robins, if and reverses, if / come, etc. (didn't want to disenfranchise any exotic bettors reading this) So, anyone who wanted an alternative bet HAD to bet with a bookie.

How much has the population increased since 1957? There have never been more people, with more income, than there is today, so any argument along those lines is negated.

In the spirit of cooperation I will amend my original statement somewhat.

Instead of "the math of betting is why nobody bets horses anymore", I will say "the math of betting is the main reason why nobody bets anymore".

As takeouts rose, attendance and betting decreased. Coincidence? Maybe. But I happen to believe that as it became harder to win, players were driven from the game. And that's the math.

[the little guy]

I may or may not be a smart guy.....but I'm smart enough not to nibble at that chum.

[DSB]

Facts are a bitch.

[the little guy]

Facts are a bitch.


Basically, every post you made is riddled with inaccuracies, and everyone can see that. It isn't worth my time to take your bait, point out what is obviously wrong with your supposed points, and then have you twist my responses around to suit your antagonistic agenda.

But, hey, it's the internet.....everyone's supposed " opinion " stands on equal ground. Sadly it's taken me five years on message boards to learn that.

[DSB]

Basically, every post you made is riddled with inaccuracies, and everyone can see that. It isn't worth my time to take your bait, point out what is obviously wrong with your supposed points, and then have you twist my responses around to suit your antagonistic agenda.

But, hey, it's the internet.....everyone's supposed " opinion " stands on equal ground. Sadly it's taken me five years on message boards to learn that.

Of course, I understand that pointing out the inaccuracies of my posts, and pointing out what is obviously wrong with my supposed points, is beneath you.

I'm sure it's not because you can't. Apparently, it just isn't worth your time (despite you felt you had the time to raise the subject in the first place).

However, because "everyone can see that", maybe someone will point them out and refute them as your proxy.

Btw, time is of the essence. All of this debate has stimulated me and I'm going to the track today. Who knows? Maybe I'll even bet. But I doubt it.

Oh, and far as having an "antagonistic agenda".... Since when did answering a question in a logical, dignified manner while presenting facts qualify as "antagonistic"?

Or is simply taking the opposite side of your view the basis of qualification?

[ArlJim78]

Oh, and far as having an "antagonistic agenda".... Since when did answering a question in a logical, dignified manner while presenting facts qualify as "antagonistic"?

Or is simply taking the opposite side of your view the basis of qualification?

Dignified manner? You mean like your last response "Facts are a bitch"?

yeah that really reeks of dignity.

[DSB]

Dignified manner? You mean like your last response "Facts are a bitch"?

yeah that really reeks of dignity.


Sorry, I meant to say "facts are a biotch".

Okay, that's one inaccuracy.

Any others?

[LIH]

DSB,

I like yourself, am a relative baby when it comes to posting here, and I realize that I perhaps should have stayed a lurker, as except for a few kind words from some others, I have been made to feel as if I have no right posting. The smug retorts, and inside elbow jab jokes between members that trail my posts have made me far from welcome. I don't understand, I thought that message board administators like when new people sign on, and add their perspective on things, regardless of whether he shares their sentiments or not.

TLG is a message board bully, and a basher. He says your antagonistic, so it is. He reminds me of one of the cool jocks from High School that watches new students walk by his locker, puts his foot out, and laughs as he watches you hit the ground. All his cronies stand around him and laugh as you pick up your books. To top it all off, Principle Advantage, takes him into his office and pats him on the back. Isn't the principle of the school supposed to stand up for all his kiddies? This all in the name of intellectualism, and information superiority. Unless you bow, agree with TLG, and submit by agreeing with the fact that he is right at all times, knows more than any of us, and is far more astute with his enlightened texts in comparison to our pathetic prose, you are just hitting your head against a wall. There should be a warning sign before you register here. "Beware, this is private country club created for those who stroke themselves on the back for knowing more than you, unless you are ok with that, go back to the inferior corner of the earth you crawled out from. Speak only if you are spoken to, and then, answer only if you tell whomever has spoken to you they are right, otherwise, prepare to be ridiculed, and condemned as uneducated, unknowledgeable, inexperienced, and just plain stupid.

Now, I have to wrap up for fear of being chided for run on sentences, poor content structure, too lengthy replies, and the worst offense of all, annoying the playground bully.

One more thing, I'm not sure which track you'll be attending today, but if it's the Big A, bring some earplugs. There is this annoying little drone I pick up on about 18 minutes before the post time of each race.

LIH

[LIH]

Basically, every post you made is riddled with inaccuracies, and everyone can see that. It isn't worth my time to take your bait, point out what is obviously wrong with your supposed points, and then have you twist my responses around to suit your antagonistic agenda.

But, hey, it's the internet.....everyone's supposed " opinion " stands on equal ground. Sadly it's taken me five years on message boards to learn that.


TLG,

You are in a position where you can help the industry make new fans. People obviously look up to you, and enjoy your input. One of the very things that is keeping new fans from joining up is the image that you are creating here at Pace Advantage. Making someone feel inferior, and stupid for asking, or expressing their opinions is exactly what the industry does not need. If a fan approached you, and asked you an ignorant question, riddled with misinformation question, would you send them on their way with your intellectual banter. I certainly would hope not, and if I were management at NYRA, I especially would hope not. Ease up. You are projecting an image that is the very thing that turns people off to racing, they are intimidated by all the information, it's far too much to grasp for a neophyte. We need to draw people in, not make them feel like this is a closed fraternity, giving them no hope of joining in. Take a look in the mirror, and REALIZE, you are not right all the time, and soften up a bit. You will be far more appealing for the game. I'm sure you will respond that you are not interested in appealing to anyone, then ask yourself what are you doing in the position you have been given, which in my eyes, is an enviable one.

LIH

[ArlJim78]

This has turned into THE thread for drama queens, wanna be board admin's, and those who love to tell others how to post.

[Brogan]

This has turned into THE thread for drama queens, wanna be board admin's, and those who love to tell others how to post.

This is exactly what happens on every message board, bar none. The only redeeming feature is that the posters here can construct a sentence in English.

[Brogan]

Facts are a bitch.

DSB, facts are not a bitch, they are impediments to an opinion.

[DSB]

LIH,

Thanks for the post. At least now I know that I am not the only poster being subjected to this treatment. Perhaps it's standard fare around these parts. Oh well.

The way I view it, if someone wants to attack any statement you make or opinion you have, they should be prepared for you to defend it. If they can't handle that, they shouldn't attack it in the first place.

Now, I realize there is a certain segment of the population who can be intimidated, but personally I don't belong in that category. I've been involved in racing for nearly 40 years in a multitude of capacities.

Chances are, if you want to discuss it, I've either done it or know about it, and this goes for both the front side of the racetrack and the backside.

I happen to love spirited debate.

What I despise are people who can dish it out, but can't take it.

LIH, if there is anything I can help you with, let me know. I'd be glad to discuss it with you without passing judgment.

[PaceAdvantage]

LIH,

Thanks for the post. At least now I know that I am not the only poster being subjected to this treatment. Perhaps it's standard fare around these parts. Oh well.Crist man, cry me a river why don't you? (Yeah, the Crist was intentional...:lol: )

I believe this thread has reached its crybaby quota, so please, grow up folks.

[PaceAdvantage]

Unless you bow, agree with TLG, and submit by agreeing with the fact that he is right at all times, knows more than any of us, and is far more astute with his enlightened texts in comparison to our pathetic prose, you are just hitting your head against a wall.Total, unadulterated baloney. Maybe you haven't spent enough time around here, so you don't know better. TLG is no different than any other poster with a strong opinion.

If you disagree with him, he will defend his position, just like any other poster. If I happen to agree with TLG or any other poster with an opinion, I will not hesitate to state my opinion as well, right or wrong. It's my website, and the day I'm not allowed to state an opinion on my website (whether it agrees with you, TLG, or anyone else), is the day I stop paying the bills for this place.

Just because I happen to agree with TLG more often than not does not mean he's afforded special protection.

What DOES afford him some extra attention from me is the fact that he IS a public figure in the racing community, and thus he is naturally a magnet for those so inclined to take pot-shots at those in the public eye.

If TLG wasn't such a public figure in racing (and he has been for years and years and years), you wouldn't be singling him out in your reply. Because, like I said, there are PLENTY of folks on here who have strong opinions and will defend them until the very end.

[PaceAdvantage]

Facts are a bitch.Maybe I missed it, but in your last major reply, did you account for the fact that there are, today, countless more options available for the gambling dollar compared to 1957 when racing was the only legal game in town?

Maybe you're right. Maybe facts are a bitch.

[DSB]

Crist man, cry me a river why don't you? (Yeah, the Crist was intentional...:lol: )

I believe this thread has reached its crybaby quota, so please, grow up folks.

crying? hardly.

maybe you caught the end of the statement:

Oh well (as in, "who gives a rat's sphincter?")

now would somebody please come up with some facts that refute my earlier post? I would have thought there would be multiple posts by now.....

[DSB]

Maybe I missed it, but in your last major reply, did you account for the fact that there are, today, countless more options available for the gambling dollar compared to 1957 when racing was the only legal game in town?

Maybe you're right. Maybe facts are a bitch.

I would have, if it were relevant.

I was asked to compare handles of yesteryear to those of today in order to prove a statement I made. I did just that.

Now, if you want to address how additional betting options have affected racing, that is another question.

Unfortunately, it just also gives support for my thesis.

If racing offered good value to bettors, they wouldn't have left in droves for alternative forms of wagering. Who can blame the guy who wants to roll the dice and give up 1.5% on his bet than to wager on a horse and give up more than 10 times that amount? Once again, "the math of racing is why nobody bets horses anymore."

But it goes even deeper than that.

When Garden State burned down on Thursday, April 14, 1977, there were 8,000 fans in attendance.

A typical weekday crowd at GSP was double that 20 years earlier.

What alternative betting can you point to that caused such a steady decline?

Casinos? NJ didn't even have one until around '76, and it was a pisspot operation. Negligible effect.

The lottery? Do you really think that a lottery caused half the people to give up on racing? Minor effect on handle, negligible effect on attendance.

RACING WAS IN STEEP DECLINE LONG BEFORE THE ALTERNATIVE FORMS OF GAMING YOU GIVE CREDIT TO EVEN EXISTED.

The only sure thing that can explain the decline is that racing simply lost its popularity. But the question is, why?

For one thing, takeouts rose steadily from the early fifties from 10% w,p,s, to around 17% at most places by the mid sixties.

Secondly, whereas tracks once had one daily double with a 20% takeout, gimmicks were steadily incorporated into the betting menu. Bettors were enticed to abandon w,p,s, (hard enough to win at 17%) for what appeared to be more lucrative exotic pools - pools with takeouts of 20%, 25%, even 30%. They were lucrative alright - for the track.

Initially, racing was responsible for its own decline. They made it harder and harder for a bettor to leave the track with money.

Other factors hastened or contributed to it, but were hardly the cause of it.

[PaceAdvantage]

If we look at the following graph, would the term "steep decline" still apply? Sure, it doesn't go all the way back to 1957, but then again, it covers a pretty good swath of time.

http://www.jockeyclub.com/factbook/factbook08/images/handle1.gif

[ArlJim78]

So the stands were packed back in the day because of lower take-out? I highly doubt it.

Takeout may be a factor for a certain percentage of real gamblers, but its not the make or break factor for the average person when deciding to go to the track or not.

[DSB]

If we look at the following graph, would the term "steep decline" still apply? Sure, it doesn't go all the way back to 1957, but then again, it covers a pretty good swath of time.

http://www.jockeyclub.com/factbook/factbook08/images/handle1.gif

I love the quote attributed to Mark Twain:

"There are three kinds of lies: lies, damn lies, and statistics"

Using your graph, the total money bet in 2007 is 12% less than the total bet in 1997, when adjusted for inflation.

Looks like an increase, doesn't it?

btw, the 10 year period you chose was one of relatively low inflation.

If you had a graph which showed handle in terms of real dollars, there would be a decline over the same 10 year period.

These facts notwithstanding, gross betting amounts are meaningless because they dont take into account relevant data, such as the number of races that were run to generate the total.

This could mean that there were simply more betting opportunities in say, 2002 than there were in 1997, or (dare I say it?) the other way around.

More indicative would be to chart the per race handle of a particular track over a 10 or 20 year period and adjust the dollars for inflation.

[DSB]

So the stands were packed back in the day because of lower take-out? I highly doubt it.

Takeout may be a factor for a certain percentage of real gamblers, but its not the make or break factor for the average person when deciding to go to the track or not.

You're entitled to your opinion, even if it doesn't take facts into account.

I didn't say tracks were packed because of lower takeout, I said that bettors left as takeouts rose and made it more difficult to win.

There is a difference.

And I agree. The average bettor doesn't take tax into account when deciding to go to the track. But he does take into account whether or not he's been leaving the track with any money when deciding to go back.

Make it harder for bettors to leave the track with money and it is going to have an effect eventually. They don't know why they have had trouble winning at the track (obscene takeouts), they just know they aren't winning.

[Cangamble]

I have to agree with DSB in this argument. Forget inflation for a second. And we can forget about population increases too for the moment.

Those are total handle numbers. 10 years ago, you pretty much had to be at the track or OTB to bet, now you can bet from anywhere, anytime, unless you live in Arizona:)
And lets not forget about whales. Take whale handle out of the picture and we would see a pretty good decline from 10 years ago.

Knowing that takeout has increased hasn't caused people from stop betting at the track, but the affect of takeout did.

Back in the 60's and early 70's, takeouts were 10-14%, there were hardly any exotic bets as well. Many gamblers left with money to come back the next day. Because there were only 2 exactors and one daily double, and no other tracks to blow money on, it was all about churn churn churn, and there were some noticeable winners who had followers. The followers would often bring friends and family to the tracks as well.

[PaceAdvantage]

btw, the 10 year period you chose was one of relatively low inflation.I didn't choose anything. This was all that was available to me on the Jockey Club website.

So you're saying that "steep decline" would also apply over the period covered in the graph?

[PaceAdvantage]

I find it interesting that in 1997, pari-mutuel handle accounted for over 25% of the TOTAL GAMING revenue in the US (this includes lotteries, casinos, legal bookmaking, charities, bingo, Indian reservations and card rooms).

In 2007, while pari-mutuel handle increased approximately 20% over its 1997 figure, it now only accounted for 16% of the TOTAL GAMING revenue in the US.

Direct proof of the impact of additional venues for the gambling dollar. People did not leave racing IN DROVES for those other forms of gambling. Pari-mutuel handle INCREASED by almost 20% over the ten year period, yet TOTAL GAMING revenue (minus pari-mutuel) increased almost 106% over the same time period.

It wasn't just people leaving racing in droves. If that were the case, handle would have DROPPED over the ten year period, not increased.

Gaming revenue source:

http://www.americangaming.org/Industry/factsheets/statistics_detail.cfv?id=8

[DSB]

I didn't choose anything. This was all that was available to me on the Jockey Club website.

So you're saying that "steep decline" would also apply over the period covered in the graph?

Ok, the graph the JC chose... sorry.

Once again, the chart is meaningless except for gross wagering.

For argument's sake, if the same number of races generated $13 billion in 1997 and $15 billion in 2007, that would represent a 12% decline when adjusted for inflation.

I suppose it's how you view the decline. Is 12% steep over a 10 year period?

It ain't good.

But it's nothing compared to a dollar of handle in 1957 vs. a dollar today.

It would take approximately $8 today to equal the purchasing power of $1 in 1957. So, a guy betting $2 today would be the same as the guy in 1957 betting a quarter. The fan betting a dime super today would be like somebody betting 1.25 cents back then.

As I showed in an earlier post, a track averaging $2 million in handle in 1957 would have to average about $16 million today to be even.

There were a few tracks that averaged $1 or $2 million back then. How many tracks are averaging $8 million or $16 million a day now?

[PaceAdvantage]

There were a few tracks that averaged $1 or $2 million back then. How many tracks are averaging $8 million or $16 million a day now?How many tracks existed back then compared to now?

[Imriledup]

There are so many different factors as to why people are leaving the game and not betting dollars at live racemeets. Here are a few that i came up with.

1) The best gamblers are getting better and better and have more information at their fingertips.

2) The takeout rate is high and doesn't appear to be getting any lower.

3) Breakage.

4) ALternative forms of gaming

5) Alternative forms of entertainment. Back in the day, there was no internet. Now, people can just sit around and surf and kill a few hours. Or, you can watch hundreds of cable channels on a really nice looking tv set. Back then, no one had these options. You either went out of your house to the track, or you sat at home looking at the walls pretty much.

6) Simulcasting. If you wanted to bet horses, you had to go live. Now, you can go to a simo center, there are plenty of them around.

7) Drugs. With banned chemicals, humans can get better at knowing which horses are the right horses without having to spend 20 years becoming an expert handicapper. Those humans who know who has the best drugs, can water down the winning mutuels enough to make it just that much harder for an honest horseplayer to get the money.

8) Auto travel. Back in the 50s, i dont think there was much traffic on the roads if you wanted to get to the track. Now, try driving from North Jersey to Belmont during the week. Or, try driving from the Arcadia California area to Hollywood Park during the week and then try heading home (by driving from Inglewood, Ca to Arcadia) at 430pm after the last race is over at the Hol.

One thing i'd like to ask the panel here is this.

Back in the 1950s with no simulcasting, phone betting or internet, the only way you can get a bet down was to physically go to the track. Didn't people work? Could you imagine how big the pools would have been back in the day if people could call in their bets on days they couldnt attend?

I would love to interview a horseplayer from the 1950s and find out how people, who were supposed to be working 9 to 5, found a way to bet 2 million dollars into the Belmont Park handle during the week in 1957.

All those people who bet that 2 million did not have a job that was a typical 9 to 5 job. (or, maybe they did and were off that day?)

This is a factor in all this analysis. Now, it doesn't matter what your hours of employment happen to be, its pretty easy to get a bet down, even if you are working.

[DSB]

I find it interesting that in 1997, pari-mutuel handle accounted for over 25% of the TOTAL GAMING revenue in the US (this includes lotteries, casinos, legal bookmaking, charities, bingo, Indian reservations and card rooms).

In 2007, while pari-mutuel handle increased approximately 20% over its 1997 figure, it now only accounted for 16% of the TOTAL GAMING revenue in the US.

Direct proof of the impact of additional venues for the gambling dollar. People did not leave racing IN DROVES for those other forms of gambling. Pari-mutuel handle INCREASED by almost 20% over the ten year period, yet TOTAL GAMING revenue (minus pari-mutuel) increased almost 106% over the same time period.

It wasn't just people leaving racing in droves. If that were the case, handle would have DROPPED over the ten year period, not increased.

Gaming revenue source:

http://www.americangaming.org/Industry/factsheets/statistics_detail.cfv?id=8

So what your numbers say is that over that 10 year period, much more money was being bet, it just wasn't being bet on horse racing.

Not exactly rendering my points moot, is it?

The best you can say using these figures is that racing remained stagnant through a time of great boom for other forms of gambling. woo hoo.

Using the period of 1997-2007 to provide proof that fans didn't leave in droves for alternative forms of gambling is erroneous. The fact is, many of them left long before this period.

Ask anybody who follows racing in NJ, and they will tell you that casinos wiped out two tracks in this state, and they did it in a 20 yr. period beginning in 1977. Anyone connected with racing knows that patrons left in droves.

Casinos in Aycee almost wiped out Delaware Park and Philadelphia too, and would have if those tracks hadn't been given slots. The point is, most of the people who "left in droves" did it before 1997.

In addition, the illusory "increase" in handle you quote may be the result of greater per capita betting, not an increase in bettors. After all, the dollars bet are constantly losing value due to inflation, so it would make sense that handle would increase, even if the value of the dollars decreases.

However, the increase in gross betting is not keeping pace with inflation, so, it still represents a decline, doesn't it?

[Imriledup]

So what your numbers say is that over that 10 year period, much more money was being bet, it just wasn't being bet on horse racing.

Not exactly rendering my points moot, is it?

The best you can say using these figures is that racing remained stagnant through a time of great boom for other forms of gambling. woo hoo.

Using the period of 1997-2007 to provide proof that fans didn't leave in droves for alternative forms of gambling is erroneous. The fact is, many of them left long before this period.

Ask anybody who follows racing in NJ, and they will tell you that casinos wiped out two tracks in this state, and they did it in a 20 yr. period beginning in 1977. Anyone connected with racing knows that patrons left in droves.

Casinos in Aycee almost wiped out Delaware Park and Philadelphia too, and would have if those tracks hadn't been given slots. The point is, most of the people who "left in droves" did it before 1997.

In addition, the illusory "increase" in handle you quote may be the result of greater per capita betting, not an increase in bettors. After all, the dollars bet are constantly losing value due to inflation, so it would make sense that handle would increase, even if the value of the dollars decreases.

However, the increase in gross betting is not keeping pace with inflation, so, it still represents a decline, doesn't it?

If the casinos in NJ were responsible for the downfall of racing, how come tracks in the area who now have slots haven't seen a major increase in horse handle? If a person left horseracing to bet slots, you would think that those players, now given the option to bet slots and horses at the same time, would come back and also bet races.
I really haven't seen a tie between horse handicappers and slots players. One game is a skill based game that's undertaken by a certain type of individual with a certain type of mindset.......a person who doesn't mind doing hard work to come up with winners. The other person is a mindless ninny who wants to throw his or her money away on a mindless activity. Anyone who is a true horseplayer, who loves the handicapping challenge, isn't going to toss his form away and run to play slots instead.

[PaceAdvantage]

Not exactly rendering my points moot, is it?The only point I was arguing was your statement that racing was/is in a "steep decline."

"Steep decline" does not produce a ten-year graph such as the one from the Jockey Club site...inflation or no inflation.

Then again, that graph is for all pari-mutuel racing. Perhaps dog racing is making a bigger comeback than we all realized.

[gopony]

Right.

Except that when I bet on the first race (exacta), I know the odds. I don't know the odds until after I've bet and the first race finishes.

[DSB]

The only point I was arguing was your statement that racing was/is in a "steep decline."

"Steep decline" does not produce a ten-year graph such as the one from the Jockey Club site...inflation or no inflation.

Then again, that graph is for all pari-mutuel racing. Perhaps dog racing is making a bigger comeback than we all realized.


"Steep decline" must be viewed in it's proper context.

If you want to show a steep decline, use the past 40 years.

A graph using any 10 year period within that 40 years would appear more as a "steady decline" when adjusted for inflation.

Oh, and again, the graph from the JC is in dollars before adjustment for inflation. It would look quite different if it was represented by real dollars.

X
X X
X X X
X X X
X X X
X X X
97 02 07

More like this

[Cangamble]

If the casinos in NJ were responsible for the downfall of racing, how come tracks in the area who now have slots haven't seen a major increase in horse handle? If a person left horseracing to bet slots, you would think that those players, now given the option to bet slots and horses at the same time, would come back and also bet races.
I really haven't seen a tie between horse handicappers and slots players. One game is a skill based game that's undertaken by a certain type of individual with a certain type of mindset.......a person who doesn't mind doing hard work to come up with winners. The other person is a mindless ninny who wants to throw his or her money away on a mindless activity. Anyone who is a true horseplayer, who loves the handicapping challenge, isn't going to toss his form away and run to play slots instead.
The studies I've seen is that when slots go up, betting on horses decrease around 30% at those tracks (live betting).
The dummy money has gone to the slots, and it used to go to the parimutuel pools.
I remember Toronto in the 70's and 80's, only one in five people at the track bought a racing form.
Today, almost every bettor is doing so off a form or a computer program that uses a form for data.

[InsideThePylons-MW]

The dummy money has gone to the slots, and it used to go to the parimutuel pools.
I remember Toronto in the 70's and 80's, only one in five people at the track bought a racing form.

Cangamble,

Please stop showing blatant disdain for the small bettor.

Somehow I'm led to believe it's a religious crime to do so. :)

[Cangamble]

Here is another blurb on breakage: http://horseracing.about.com/library/blbreakage.htm

She has the right idea. Except the average is 10 cents, not 9.5 cents.
I'll admit I made a mistake. She is right, it is 9.5 cents per every $2 bet cashed. I just did a blog post on it, and I decided to do the math 0+1+2+3...+19 divided by 20.
For Canada and New York state who break to the nickel, it is 4.5 cents per $2 bet.

[Cangamble]

Cangamble,

Please stop showing blatant disdain for the small bettor.

Somehow I'm led to believe it's a religious crime to do so. :)
I have no disdain for them. I want them back, but the tracks don't seem to know how to get them back.

[InsideThePylons-MW]

I have no disdain for them. I want them back, but the tracks don't seem to know how to get them back.

It was a joke CG.

http://www.paceadvantage.com/forum/showthread.php?p=644222#post644222

[Cangamble]

It was a joke CG.

http://www.paceadvantage.com/forum/showthread.php?p=644222#post644222
I missed reading that thread.

[badcompany]

The studies I've seen is that when slots go up, betting on horses decrease around 30% at those tracks (live betting).
The dummy money has gone to the slots, and it used to go to the parimutuel pools.
I remember Toronto in the 70's and 80's, only one in five people at the track bought a racing form.
Today, almost every bettor is doing so off a form or a computer program that uses a form for data.

Two questions:

In the 70's, what was the median age of the people at the track?

Were there a lot of women in the crowd?

__________

I'm familiar with the Saratoga racino. The average age of the slot players there is "deceased." I remember, on a Tuesday (dark day), walking through the casino to get to the horse racing area. I'm 40, and was the youngest person in the place by about 30 years. It's also about 80-90% women. Had I taken off my shirt and started dancing, I probably could've made some money.

[Cangamble]

Two questions:

In the 70's, what was the median age of the people at the track?

Were there a lot of women in the crowd?


It was a wide range of ages. I would say that the average age of a person who bought the Form was in their mid 30's, early 40's. Lots of families showed up on weekends. In the grandstand on a week day I would say that there were 4 men to each woman, on weekends maybe 2 to 2 and a half to one.
I'm guessing.

[Imriledup]

Ok, I'm gonna take a stab at this. Let me know if my math is wrong.

My feeling is that a multiple race wager is better than a corresponding parlay. For the record, I've never been a parlay bettor, but I have bet pick 3's and pick 4's. What I've especially enjoyed betting is a multiple race wager with a carryover. In my opinion, it's the only sure way to beat the take.

Anyway, I believe that given the choice, tracks would much rather have someone attempt, say, a three horse parlay than to play a pick 3. Regardless of takeout rates, I think tracks make more money when someone parlays, which, conversely, makes it cheaper to play the pick 3.

Let's take a typical pick 3 pool with a 22% take. In a $1,000 pool the track would rake $220 right off the bat. End of story.

But what happens when, say, a group of people attempt a parlay on the same three races? This is what I've come up with.

If 500 people set out to make a win (17% take) parlay and bet two bucks each, you have the same $1,000 bet on the first leg of the parlay.

After the first leg, some people would be eliminated and those still remaining would divide $830.

That $830 would be bet on the second leg, with the track returning $689 to the bettors who survived round two.

The final $689 would return a total of $572 to those who had all three winners in the parlay.

That means over the same three races, the track rake would have totaled $428 instead of the $220 they took from the corresponding pick 3 pool.

Sure looks like a better wager to get into the closed pool that took 22% all at once rather than a parlay which takes three seperate chunks along the way.

Now I realize that a parlay involves three pools which will include other win wagers than just the original parlay money. But because that additional money is cut at the same rate, I don't see how it would affect the numbers, on average.

Btw, I'm sticking with my original claim that single race exotic wagers are always more expensive than a w,p,s bet in the same race, regardless of how many horses are involved in the exotic.

I think the logic is flawed because you are using 3 seperate races for win bets, but only one race pick 3s. If you bet into a rolling 22% pick 3 pool for three races in a row (bet the pick 3s starting in races 1 2 and 3) vs a 15% win takeout for 3 races in a row, that adds up to 66% vs 45%.

Every wager you make has either a 15% take or a 22% take (for example). Its just that the pick 3 makes you play less races. You get more 'action' in the pick 3.

At the end of the year, if you have player A who only bets win, and player B who only bets pick 3s at the higher rate, each player will have X amount of plays. The win guy will have 1,000 win bets in a 365 day year and the pick 3 guy will have 1,000 pick 3 bets in that same calender year. The win player bets 100 dollars per race and makes 1,000 plays for the year and his handle is 100,000 which means 150k was taken from him for his troubles. The pick 3 guy makes 1,000 plays at 100 per play (he bets one cold 100 dollar pick 3). So, the pick 3 guy also risks 100,000 and is raked at a 22% vig, which means he loses 220,000 as opposed to 150,000 for the win player.

The only edge the pick 3 player has is that he gets more 'action'. He gets to root for his horses in 3,000 different races (assuming he stays alive after the first two legs) as opposed to 1,000 races for the win bettor.

Action aside, both players make 1,000 bets. One guy loses 150k and the other guy loses 220,000k. No way around the numbers.