Penny Breakage - Returning rightful winnings to horseplayers

[Andy Asaro]

https://racingthinktank.com/f/penny-...o-horseplayers

Excerpt:

The Jockey Club’s Round Table Conference on Matters Pertaining to Racing in August 2018 featured a presentation from McKinsey consultants in which they identified 15.8% as the “racetrack revenue-maximizing” takeout rate for win, place and show pools (WPS). Unfortunately, for both horseplayers and the racetracks, the average takeout in WPS pools across more than 60 tracks studied is 17.3%.

But the reality is far worse for bettors in those pools when factoring in breakage.

Serving as an additional rake on winning bets, breakage increases the effective takeout to near 20% or higher in some jurisdictions, reducing the return to bettors and thus reducing the amount of money that could be churned back into the pools, increasing handle.

As handle on North American racing has essentially stagnated over the last five years, and is down more than 20% for the last decade, racing operators and regulators need to find ways to stimulate wagering. One way to help the entire system would be to return the rightly earned winnings to bettors, without the burden of breakage.

[Andy Asaro]

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Click the link for entire article

https://racingthinktank.com/f/penny-...o-horseplayers

[v j stauffer]

What about this idea. Tracks pay penny breakage but only if the entire transaction takes place on track AND at a SAM machine?

Clerks having to deal with the pennies will slow down the lines and potentially get people shut out.

Eventually if you convert more players into live SAM players the track can save money by having to put on less live tellers.

[ReplayRandall]

.10 cent supers are paid out EVERYWHERE to the penny....What a lot of BS breakage IS, has been, and always will be....Without excuse, outright theft.

[chiguy]

Originally Posted by v j stauffer

What about this idea. Tracks pay penny breakage but only if the entire transaction takes place on track AND at a SAM machine?

Clerks having to deal with the pennies will slow down the lines and potentially get people shut out.

Eventually if you convert more players into live SAM players the track can save money by having to put on less live tellers.

What about this idea. Tracks get rid of announcers and take the savings and put on new player seminars where you give the new players $20 to wager.



Eventually you will attract more people to the races and nobody will miss anything.

[v j stauffer]

Originally Posted by chiguy

What about this idea. Tracks get rid of announcers and take the savings and put on new player seminars where you give the new players $20 to wager.



Eventually you will attract more people to the races and nobody will miss anything.

Who gets to host the seminars? A days pay for each player seems high.

[whisperlunch]

Vic surely you are not defending the current breakage? Without a doubt the tracks need to pay to the penny. To this day I can’t beli the horse player including me has allowed the tracks to round up on payouts. It’s 100% theft.

[Tom]

How about this - no cash bets allowed.
Vouchers only.
Then pay to the penny.

[Andy Asaro]

Worrying that the tellers would have to pay out pennies is ridiculous. I've suggested that the tracks give the tellers a couple rolls of nickels and round up if they don't want to pay pennies. My suggestion to the Stronach Group who I met with on Pacific Classic day was to start with nickel breakage on WP and penny on show to see how it goes. And to lower exacta takeout to 17.75%. They agreed to take a serious look at it. With Craig Bernicks group pushing for the same thing it may put the idea over the top. Whichever track does this first will get a ton on new business.

Just to give people an idea they feel these things are a big risk even though I and others believe it's a no brainer. One of the things they always want to do is raise the take on another wagers. They mentioned raising the 3 horse bets from 23.68% to a flat 24%. I don't believe that's necessary plus it puts kind of a negative spin on a great idea.

These things are just part of an integrated plan to increase churn and grow the Customer Base.......IF DONE CORRECTLY

[AltonKelsey]

imo breakage is a hangnail compared to the cancer of high takeout.



Let's be distracted by this for the next decade.

[AltonKelsey]

They talk about how NYRA paid out 1.8 million in minus pool money.



First of all, did they add in the extra money made when the chalk runs out ?



Not sure it happens often enough to make a big diff, but still.



And are they implying these show bettors are net profitable ?

[ReplayRandall]

Originally Posted by AltonKelsey

imo breakage is a hangnail compared to the cancer of high takeout.



Let's be distracted by this for the next decade.

If you can't get "them" to do the small stuff, how will they ever address high takeout?.....Fat chance either happening from fat cats with Big Egos...

[jimmyb]

Free parking, free admission, free programs and give us back the breakage. Tracks have been screwing us for years, time for them to give back.

[Andy Asaro]

Originally Posted by ReplayRandall

If you can't get "them" to do the small stuff, how will they ever address high takeout?.....Fat chance either happening from fat cats with Big Egos...

Right. It has to be done incrementally.

[Tom]

They talk about how NYRA paid out 1.8 million in minus pool money.

Card better races.