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The Pari-mutuel Tax

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The Horesplayers Association of North America ("HANA") (website: http://www.horseplayersassociation.org/) formed several years ago in order to bring a voice to the concerns of the player.  One of the biggest issues that HANA attempts to bring awareness about is the pari-mutuel tax, or "track take".  Track take is a serious issue for any player that wagers on a regular basis, as that percentage in many ways determines whether you will walk home a winner or a loser. 

If you are new to the game of horse racing, the pari-mutuel tax is the percentage of the wagering pool that the track removes prior to any winning tickets being paid.  This is essentially where the track makes the majority of its revenue, from a percentage take of the daily wagering handle.  

Unlike playing blackjack or craps in Vegas, the track doesn't care which horse wins so long as people are betting.  In sports betting, while the casino takes bets on both sides of the outcome (and adjusts the line accordingly in an attempt to have 50% of the wagering on each outcome), there is a risk to the house if their line is wrong and an overwhelming majority of bettors hold winning tickets at the conclusion of a game.  With horse racing, the risk to the house is very low as they will get their money every single time.  The size of the cut will vary depending on the specific wager and the amount of money in the pool, but the track gets its percentage regardless of which horse wins. 

For players who wager on a daily basis, the pari-mutuel tax is one of many obstacles we must overcome in order to turn a profit.  Fortunately, through the wonders of technology and multi-track simulcasting, a player isn't forced to play a track where the take is particularly high or unreasonable; he or she can shop around for the track that offers the most value based on how they play the game.

Over at HANA's blog there is a link to a spreadsheet that summarizes the pari-mutuel tax for every thoroughbred track in North Ameirca.  A link to the complete chart can be found here.  I've summarized the lowest and higest pari-mutuel percentages by wager in the table below.

Track_take_medium

A few thoughts on the assortment of takes around North America:

-Assiniboia Downs is located in Winnipeg, in case you were wondering (I had to look it up).

-I suppose it shouldn't be surprising that most of your "big" tracks lead the way in a least some of these categories for lowest takeout; while many "minor" tracks are on the high side.  One can argue that there is sort of a circular situation with many of these tracks in that the small tracks don't have the quality product or the big handle so they need a higher take to make ends meet.  Of course, the higher take potentially drives away additional dollars as players look for better value....which makes it harder to keep purses high and to lure quality horses to the track. 

-The California tracks have the lowest take on WPS wagering, with New York right behind at 16%, according to the HANA chart.

-With the start of the Monmouth Park meet this Saturday, I think it's relevant to point out their "lowest in the industry" Pick 4 take of 15%.  The next lowest Pick 4 takes in North American, according to the HANA chart, are Keeneland, Churchill, and Tampa Bay, all at 19%. 

That's a pretty big advantage that Monmouth has over a lot of tracks around the country.  My home track of Emerald Downs has a 22.1% take on Pick 4s, while New York rolls in at a ridiculous 26%.  A seven to eleven percent difference between Monmouth and other tracks in Pick 4 take could be the difference between a winning meet and a losing meet, if you are a serious Pick 4 player.

That 26% take in New York on Pick 4s really surprised me as I would never have guessed that it was that high.  It's tough to make a profit on your wagers when over ¼ of your money is going to The Man.  New York also takes 26% on Pick 3, Trifecta and Superfecta wagers.

-You'd think with the amount of money put into the California Pick 6 pools on a daily basis that they would have the lowest take in the country, but Gulfstream has a 5% lower take than they do.  California tracks, however, are clearly where it's at for the Pick 6, followed by New York, in terms of the dollars wagered on a daily basis.  Tracks in both states (DMR, HOL, SA, GG, AQU, BEL, and SAR) take an average of 21% out of the Pick 6 pool.