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The real problem I think you're encountering is that the handicapping has gotten better (favorites are winning a higher percentage of races) which is depressing payoffs
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Personally, I have no doubt that's the case but I'm not sure how much of that is better handicapping at the top (computer guys) vs. less dead money in the pools from places like OTBs and more casual bettors that have been lost. It may be both.
