Saturday marks the launch of the Golden Hour Double, a two-race bet requiring winners to pick the winners of last races of the day at both Santa Anita and Golden Gate Fields. Takeout will be a friendly 15% and perhaps more interesting, the bet minimum increases to $5.
This is a laudable experiment, deserves horseplayer support and is one that hopefully gets time to evolve in the market. Replication by other jurisdictions would make sense.
The Breeders’ Cup attempted something similar in 2018, although the execution reminds that best intentions don’t always yield the optimal result.
With just a 10% takeout and a $10 minimum, its head-to-head wagers were an attempt at sports betting-like props. The higher minimum would also have the concurrent effect of reducing breakage when calculating returns at that stake level.
Once the returns came through, however, it appeared something was awry. Despite noble intent, Kentucky requires bet returns to be calculated to a $1 base stake, which yielded increased breakage and lower returns to customers. Five of the seven head-to-head bets paid lower because the stake calculation method was to the lower number, despite the minimum bet being $10.
In one example, effective takeout (which includes breakage) was actually 15.96%, or nearly 60% higher than the advertised rate which does not include breakage.
The Thoroughbred Idea Foundation has advocated for racing to consider measures to better price its product to benefit horseplayer participation. It is estimated that roughly $50 million a year is withheld by bet-takers – tracks, ADWs, simulcast sites – as breakage. If that money were returned to players directly, as opposed to being retained by bet-takers, we estimate the subsequent churn could yield an additional $200 million in handle.
What might be the impact to handle if horseplayers did not have to shell-out for data?
Look back at our white paper on the topic which recommended a shift to penny breakage.