Lower wagering thresholds are very helpful for taxation purposes but there is sometimes a concern that by lowering the bet amount the payouts will suffer.  If more people hit the wager then, in turn, the amount returned would be less.  Of course, the goal of the track differs slight to that of the players.  The track seeks higher handle and handle churn; more people cashing winning tickets increases the chances that those same people will re-invest those funds in additional races.  Players, on the other hand, want the biggest bang for their buck.

The practice of reducing minimums for exotic wagers has swept over the industry the past five years.  Whether its $0.10 Superfectas or $0.50 Tris, Pick 3s and Pick 4s, tracks have begun to offer many exotic wagers for a mere fraction of what those bets used to cost. 

Last summer, my home track of Emerald Downs reduced the minimum amount of their early and late Pick 4s from $1.00 to $0.50.  The change took place at the start of September and continued for the final month of the 2010 meet.   I decided to take a look at the Emerald Downs Pick 4 payouts by comparing the month prior to the change (August) with the payouts after the change (September) in order to determine the difference, if any.

Methodology

Continue reading this post »