How much would a typical horse track take in on an average day? An above average day? Would an important race be more profitable? Are horse tracks operated like a casino “house”?
The answer to your first two questions is beyond my knowledge. Certainly, it would vary tremendously from track to track and also from day to day, depending on the race card. An important race is more profitable because more people bet more money, and also eat and drink more.
As for your last question, yes a race track is like “the house”. The track takes all of the money bet on a race (actually in each pool of bets within a race) and subtracts their take off the top. The rest is paid out to winners. The track doesn’t care at all which horse wins, as it takes its money off the top. Odds for each bet is based on the amount wagered on each horse and bet combination. A quick look shows that most tracks around the country extract 15 to 25 percent, and the rest is paid out to bettors. So, from a gambling perspective, horse racing has a huge house advantage compared to most table games or even slot machines.
Another difference is that the track is essentially guaranteed their profit as the take is a given fraction of the total bet.* But a casino wins only because its average take is a certain percentage. It would be possible for a casino to have a run of bad luck and someone could “break the bank”.
- One small proviso. There is a minimum payout on a $2 track bet. I believe it is $2.20. So if everyone bet the favorite, for example, the track would have to payout 10% more than it took in. The track could lose but only if too many people bet on the same thing that wins.
Right process, wrong word.
The casino is guaranteed it’s revenue as a fixed percentage of the handle. Many, many tracks fail to make a profit because their total revenue is less than their total expenses. Despite their guarantee of revenue as a percentage of the handle, tracks are going bankrupt all over the country because the handle is too small to cover their nut.
Back to the OP, there’s no such thing as a “typical track”. They vary all over the map from small town operations to the nationally recognized big names.
A little Googling will get you the handle numbers for any track you know the name of.
This depends on whether the track breaks to the nickel or the dime. My local track breaks to the nickel, so payouts on a $2 wager can be as little as $2.10.
More importantly, what you’re referring to is known as a “negative pool,” or one where the pari-mutuel pool cannot cover the winning wagers, after the track takeout. The track will make good on all winning wagers, but it will have to dig into its own pockets in order to do so.
Minus pools are very rare, and only occur in show betting, where the pool is split three ways. If there’s a heavy favorite, people will bet him to show and it’s possible for the track to lose money, but I doubt this happens more than once or twice a month, and the other money bet on the race covers the loss.
Tracks take a percentage of every bet off the top. You can get a rough idea of their income for a day using the published handle and attendance figures (rough because the percentage is different for different top types of bets. If you assume all bets are b win place and show, you can get a minimum.)
I’ve only been to a couple horse races in my life, but I know the difference between a win bet and a place bet.
Yes, but they run a limited number of races a day. By contrast, casino patrons make many bets per day - often hundreds.
This turns a small house odds advantage into the likelihood that the house will wind up with a good percentage of the patron’s gambling stake.
Certainly. There is about 20 minutes between horse races. I’d wager you could hit the “bet” button on a slot machine 150 times in 20 minutes. Slots are by far the most profitable for casinos. Even though the amount wagered is often relatively small, the number of wagers per hour dwarfs table games and horse racing.
Still, as Old Guy pointed out, the house edge on table games and machines is based on long-term mathematics, not a guaranteed take off the top. Poker games (the real ones where players sit around tables and play against each other) are more like horse racing. The casino rake for such poker games and tournaments is a percentage of each pot, not a mathematical house edge.
Not all that rare according to The Lady in Red: A story of a woman and bridge jumpers which I really enjoyed a few months ago. Great story.
The figures don’t tell the whole story … an astute punter with relevant knowledge can offset the “over-round” percentage if he bets knowledgeably and selectively.
Just because the tote machine says the odds against a certain horse are , say, 5/1 , it doesn’t mean that the true odds might not be significantly less than that.
In a casino game, there is of course no knowledge to be had about the event (unless the table is fixed) therefore the punter is always betting with a negative expectation.
Very edifying answers. Thanks all.
Question Part Two: Beyond how the system whacks up the money generally, what is the procedure on placing bets? Is it done electronically? How was it done in the old days?
Also, with the daily handle of some tracks being quite large, do race tracks have their own vaults? What’s physically done with all that dough, flowing between the pony-player and the betting establishment?
Track betting is handled electronically (I’m speaking about California tracks). You can go to a window and tell an attendant what kind of bet you want to place and for how much, she will punch it into a computer and issue you a bar-coded ticket. Or there are self-service machines; you feed in some cash, select your bets, and are issued a bar-coded ticket and a bar-coded voucher for the unplayed balance. You can feed winning tickets back into the same machine and get either a voucher for your winnings, or you can apply some/all of the balance to new bets.
I’m going to get the details wrong on this, but my FIL is a long time horse bettor. In the old days (I’m talking about the 1970s, but maybe later) paper betting tickets were punched by hand. Different windows had different maximum bets, and I believe the largest was $50. He and a friend used to be railbirds and knew a lot of the people who worked at the tracks. Jockeys were not allowed to bet, but sometimes they would ask a friend like my FIL to lay money for them. One day all the jockeys for one race came to him asking to lay bets on a particular horse; clearly the fix was in. My father in law got in the $50 line and told the clerk to keep punching tickets until the race went off.
Nowadays you can make big bets at special windows.
Note that most of that cash is one-way – coming in.
Bets are made in cash, but winnings (above a small amount) are paid out in checks written by the track (with the IRS portion helpfully already deducted for you). Bettors get back cash only for small bets, or are paid in credit slips, which are usually used to place more bets on later races. Eventually, bettors can ‘cash out’ their unused credit slips for cash, but if it adds up to a large amount, they get a check instead. And tracks make a small but steady additional profit from bettors who forge to cash out before they go home at the end of the day, and then can’t find their unused credit slips to bring with on their next trip to the track.
Not necessarily. I’ve seen a few negative pools on win wagers at Woodbine, for example. Mind, those have been heavy favourites against has-beens or never-wases, but I’d suggest it can happen in any pool.
Here in Canada, racetrack winnings are not taxable. We can bet on American races, but because our winnings are not taxed, our pools on American races are separate–the odds are close to American odds, but not always the same. Sometimes they pay more than American prices, sometimes they pay less. Regardless, we don’t have any government tax on our winnings.
For large winnings (say, over $1000), you can request a cheque. But most winners take their winnings in cash. The largest ticket I’ve ever cashed was about $300, and I took it in cash.