Penny Breakage Increased Profits for Breeders' Cup Players

Courtesy Thoroughbred Idea Foundation

Horseplayers at the 2022 Breeders' Cup enjoyed more than $545,000 in additional winnings from just the win, place and show pools thanks to the revised Kentucky law that pays pari-mutuel winnings down the penny.

“The two days of racing at Keeneland were sensational, but it was made that extra bit better thanks to penny breakage increasing payouts to players,” said Patrick Cummings, Executive Director of the Thoroughbred Idea Foundation (TIF).

In no race was the impact greater than the Breeders' Cup Classic won by Flightline.

Under the previous provision, and across nearly every American jurisdiction now other than Kentucky, Flightline would have paid $2.80, $2.80 and $2.20 for each $2 stake in the win, place and show pools, respectively. Instead, winning bettors received $2.88, $2.92 and $2.30 from those pools.

“The penny breakage law meant that a $2 bet across the board on Flightline returned a profit 16% larger than it would have under dime breakage,” Cummings said.

Altogether, the win, place and show pools from the Classic returned $240,000 more than with traditional rounding to the dime.

“The wins from Modern Games ($4.76) and Malathaat ($7.76) carried an extra boost too, accounting for an additional $131,000 from the win breakage alone going back to horseplayers.

“Hopefully winning players churned some of that into Rebel's Romance and Flightline.”

Overall, through just 64 days of Thoroughbred racing in Kentucky since the revised law went into effect, total breakage returned to horseplayers from the win, place and show pools is now more than $2.13 million.

Factoring in exotic pools as well as Standardbred racing in Kentucky, the total returned is higher.

“Pricing matters and racing wagering's overall takeout rates, already too high, are inflated by rounding down to the dime. Kentucky took a bold first step and other states and horsemen's groups should follow their lead and support such initiatives.

“Clinging to this antiquated practice is bad business and keeps racing wagering less competitive. We hope racing adopts sustainable practices to build its customer base and 'grow the pie' for all stakeholders.”