Courtesy Thoroughbred Idea Foundation
Winning horseplayers at Churchill Downs and around the world betting into the pools across Kentucky Oaks and Kentucky Derby days enjoyed more than an additional $1 million in winnings thanks to an amendment to Kentucky law which now rounds winning bets to the penny.
The practice, known as breakage, has been in effect across all of American racing, relatively unchanged, for more than a century. But Kentucky's legislature passed an amendment to existing laws in March 2022. The measure took effect in July of last year, making Saturday's Kentucky Derby won by Mage the first in modern history to pay winning bettors to the penny.
Mage returned $32.42 to win, $14.58 to place and $9.08 to show for every $2 bet.
A $100 place bet on Mage this year returned bettors an additional $9 in 2023 compared to what would have been paid to them under the old breakage calculation.
For the Derby itself, more than an additional $318,000 was paid back from just the win, place and show pools thanks to penny breakage. The total amount across all pools is even higher. Traditionally, winnings have been rounded down to the dime and that amount was retained by bet-takers, either on-track or by account wagering operators.
“This amended law puts the entirety of a winning bet back in the hands and accounts of horseplayers, where it has always belonged,” said Patrick Cummings, executive director of the Thoroughbred Idea Foundation, which first advocated for the shift to penny breakage in a 2018 white paper.
“Breakage has skimmed billions of dollars off the top of winnings that should have been paid to horseplayers. Decades ago, it might have been slightly more understandable why such a law existed, but not today, and Kentucky's legislators recognized that and made a meaningful change that will benefit those that support racing through wagering.”
Perhaps not surprisingly, total wagering on the 2023 Kentucky Oaks and Kentucky Derby days were both record highs, as was all wagering across the entirety of Derby week.
“Breaking to the penny, enabling customers to churn those additional winnings ,undoubtedly played a role, no matter how small it might seem. Kentucky's continued success should serve as an example for other states, tracks and horsemen to advocate for penny breakage, following Kentucky's lead.”
Click fo read this story on the TIF website.
The Thoroughbred Idea Foundation advocates for sustainable improvements to the Thoroughbred racing industry for all stakeholders, especially its primary customers–horseplayers and horse owners–through the exchange, curation and advocacy of sound, data-driven ideas, shared with and implemented by the sport's existing entities.
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