Through the Keeneland races on Sunday, October 16th, more than $1.1 million has been returned to horseplayers from the first 49 Kentucky race days of rounding pari-mutuel winning dividends to the penny.
The penny breakage provision, supported by the Thoroughbred Idea Foundation (TIF), was the first of its kind in North American racing and went into effect in mid-July following passage of broader legislation designed to standardize pari-mutuel taxation.
“The total is even higher than $1.1 million, that is just in the Thoroughbred win, place and show pools” said TIF Executive Director Patrick Cummings. “The breaks from exotic pools and Kentucky’s Standardbred races add even more to the total.”
For nearly the entire history of pari-mutuel wagering in Kentucky, and practically every other jurisdiction in the U.S. and Canada, if an unrounded $1 return for a winning bet was $5.0918, that would be rounded down to $5.00. Now, for races in Kentucky, a winning bettor in a similar situation would receive $5.09.
“Based on observations across Kentucky’s tracks and discussions with tellers, there has been a short acclimation period for everyone to get used to it. But now that customers receive a 'full' dividend, not only is there no going back, but we start looking elsewhere wondering why others are not as progressive as Kentucky.
"It’s been seamless for ADW bettors and overall, the feedback TIF has received has been entirely positive.”
The provision, which was discussed in legislative hearings from a previously-formed task force to review pari-mutuel wagering taxation following the legalization of historical horse racing machines in the state, was included in Kentucky House Bill 607 and passed by both legislative chambers in March before being signed into law in April.
“The legislative support to accomplish this cannot be understated, led by Representative Adam Koenig in the House and Majority Leader Damon Thayer in the Senate. They mustered the backing of a vast majority of their colleagues to be the first in America to right a multi-generational wrong.
"The penny breakage provision was a small part of a much bigger bill and it is paying back horseplayers that bet Kentucky races, enabling them to churn more across the sport.”
The 2022 Breeders’ Cup at Keeneland will feature payouts down the penny thanks to the revised law, while next year's Kentucky Derby will be the first with penny breaks.
“Other states and tracks should want the same, following Kentucky’s lead. But until then, Kentucky pays you more.”