WTF?
My suspicious were quickly confirmed when I Googled what might he going on with pari-mutuel payouts in Kentucky. Penny breakage.
Huh?
Believe it or not, it's a good thing for the bettors. A payout is increased because the rounding determination for the payout is rounded to the nearest penny, not the nearest nickel or dime. New York had dime breakage for years; then nickel. Canada always had nickel breakage.
With dime breakage, when the payout is computed it is rounded to the lowest ten-cent number. If the calculation says the payout should be $2.36, then the payout is rounded down to $2.30 for a dollar. Not a great deal, but an erosion of a return.
In the old days in New York, when all betting was done through a clerk at a window, The Seller punched out your bet. On the other side of this bank of windows were the Cashiers, those that cashed your ticket if you won something.
With dime breakage, the tellers on the Cashier side only ever had to have dimes and quarters ready to hand you. There was no need for nickels, and certainly no pennies.
You had to be careful when you got a payout. Mutuel clerks sometimes would short you some change if they could get away with it. Everyone was on the hustle.
And if you had a previous day's ticket to cash, you had to go to a special window where the clerk looked up the payout in a ledger of green-bar IBM paper. If you didn't know what you were supposed to get, they might try and gyp you there too.
Racing would have died a long time ago if it weren't for computers and satellite telecasts. The computer makes all kinds of bets possible. The numerous multi-leg wagers, the rolling Daily Doubles, Exactas, Quinella, Trifectas, Superfectas, The Grand Slam.
The Grand Slam is a NYRA bet devised decades ago that requires you to have picked any horse that finishes first, second, or third in the three races prior to the feature, and couple those selections with the winner of the feature. It's the strangest bet I know of, and they still use it in New York, even to the tune of there being a $72,605 Grand Slam pool Saturday at Saratoga. It paid $23.50 for a $1. I might have played it once.
This year NYRA introduced a Triple Play which involves three designated races on Friday, Saturday or Sunday's card at Saratoga. The bet is a minimum of $3 with a lower takeout of 19%. So far, I'm not having much luck on looking up how that bet has been going and what its payouts have been.
On July 15 Kentucky introduced "penny breakage" which in effect means there is no rounding down—the calculated payout is made however the calculation comes out, even if it involves pennies, like $18.74, $8.04, $4.16...etc.
This does put a few more cents back in the bettors' pockets, and with the voucher systems, and online betting, does not really introduce physically pushing small change back to the bettor.
Dime and even nickel breakage was a subtle way of taking even more money off the top—MOTT—I always like to say. In addition to the takeout, which can vary based on the type of bet, with multi-leg bets being assessed the highest takeout, breakage could amount to 1.2% of the day's mutuel handle. A small percentage of a large number will still be a large number. Otherwise known as gravy. The crumbs can be nutritious.
I can't imagine penny breakage back in the old days when there were no vouchers or online betting. It would have meant the cashiers would have had to have all denominations of coinage available, and would have to dish out payouts like you were getting change at the supermarket.
They would have never stood for it. They would have gone on strike. Mutuel clerks of old were not a friendly lot, unionized over the years by a variety of organizations. At one point I think they were part of the electricians' union in New York.
As I've stated in prior postings, I pretty much stick to win and exacta wagering. I disdain multi-leg wagering because you can really start to bet a lot of money trying to hit one of those, and get blown out very easily. Also, your carefully crafted handicapped long shot that wins, but is inside a multi-leg wager, will reward you with bupkus unless you've separately played it. More money laid out.
Personally, I'm waiting for "build-your-own" multi-leg bets. You pick the races for a personalized Daily Double, Pick 3, 4, 5, 6, etc. Of course this would introduce an incredible number of extra pools into the system, and might be seen to cannibalize the well-liked consecutive multi-leg bets that can build to large carryover pools and life changing payouts with the right mix of long shots.
But if I put together a Pick-3 ticket on three races I pick, then I still think there's a terrific chance that others will pick the same three races, and we will in effect create our own intermittent race pool. Payouts could have wild anomalies to the individual prices, both high and low.
It's a radical thought, but one I could look forward to. And if NYRA wants to climb on board with penny breakage, I'll accept it. Anything that gives you more money back is a good thing.
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