When you go to spend a day betting on the ponies, you want to maximize your chances at winning. But one little-discussed way to add to your expected value is to find a track that has the lowest takeout rates.
All commercial betting requires paying for the privilege and convenience of placing a wager. For those involved in sports betting, you often hear terms like the household or the vigorish. When it comes to horse racing, the correct term is takeout rates.
By finding tracks, races, and operators with lower takeout rates, you can ensure larger profits when you cash winning tickets.
What Are Takeout Rates?
Simply put, takeout rates are the cost of betting on an event like horse racing, and how much the racecourse or track takes from betting pools.
Horse racing is run on a pari-mutuel basis. Unless and until fixed-odds horse racing is legalized in more places in the United States (it is currently only offered in New Jersey), bettors need to familiarize themselves with the pari-mutuel system.
Pari-mutuel is a French term that literally translates to mutual stake. It equates to a betting pool for each horse race. Horse Racing bets require picking a horse to win, place, or show, ie. finish first, second, or third.
Pimlico’s takeout rates differ from Churchill Downs, which differ from Belmont Park, etc.
In pari-mutuel betting, all the bets on a single race are pooled together. Then, the odds are calculated based on the amount wagered on each horse. Odds constantly shift until post-time.
This contrasts with fixed-odds betting, as seen in most other sports. When you pick a team to win a moneyline bet, you lock in your odds. This allows you to know your winnings once your wager is successful.
When you bet at a pari-mutuel track, your odds can shift. Say you got a pony at 20-1 odds to win. If you place the bet a few hours in advance of the post, your odds could decrease to 10-1. This would cut your winnings in half!
Does Every Bookmaker Use Them?
But pari-mutuel horse tracks do not calculate the betting pool on exactly the total amount wagered. Instead, the pool is actual total wagers minus takeout rates. The track takes a percentage of every dollar wagered to fund things such as operations and pay taxes.
While larger tracks also cash in on concessions, merchandise, and even ticket prices for premier races, smaller tracks mainly get by through takeout.
via GIPHY (that feeling when you find the lowest takeout rates)
While every horse racing track uses takeout, the amount will vary between operators. Takeout rates do not affect you upfront. You place a $2 exacta the same from track to track. However, you will notice a difference when you win!
The higher the takeout rate, the lower the amount you will get back in winnings! That’s why it is vital to shop around for the lowest takeout rates before you place any of your wagers.
Do Takeout Rates Only Exist in Horse Betting?
Takeout rates are particular to pari-mutuel betting. Because in pari-mutuel betting you are betting against other bettors and not the house, takeout is not the correct term for sportsbooks.
However, there are other sports that exist on a pari-mutuel basis. Handicapping dog racing is usually run on a similar pari-mutuel system. Likewise, if you can find a jai alai fronton, you will likely see pari-mutuel odds. Operators of these sports will set their own takeout rates to cover operations.
However, that does not mean you do not pay for the privilege of betting on other sports. The hold is very similar to takeout rates. Quite simply, it is the percentage of every dollar bet that the house keeps for itself. However, you are betting against the house in sports betting, not a pool of players like in pari-mutuel betting.
Vigorish is a little different from hold rates, and typically refers to making bets that are not exactly legal. However, commercial sportsbooks do collect a vigorish commission.
Similar to takeout rates, the sharpest sports bettors will shop around to find the lowest hold percentages to maximize the winnings.
Read our reviews of the best, safest online sportsbooks to find the lowest holds. Then compare each site’s pros and cons, welcome bonuses, and offerings to find the best sports betting experience for your style of play.
