TIF Reports: Penny Breakage Returning rightful winnings to bettors and stimulating North American tote pools

September 7, 2018

TIF Reports: Penny Breakage September 7, 2018

Preface The recommendations offered in this and The Thoroughbred Idea Foundation (TIF) was subsequent papers aim to serve as a starting recently launched to provide an active forum point for industry change. TIF welcomes your for the exchange, curation and advocacy of feedback via our website – ideas which will improve thoroughbred RacingThinkTank.com. racing for all stakeholders, and specifically its primary financial participants – horseplayers Introduction and owners.

The Club’s Round Table Conference Implicit in this process will be the discussion on Matters Pertaining to Racing in August of various industry policies and positions 2018 featured a presentation from McKinsey which may have existed, unchanged, for consultants in which they identified 15.8% as decades. The topic discussed in this paper is the “racetrack revenue-maximizing” takeout one of those. TIF believes the industry must rate for win, place and show pools (WPS). thoughtfully address matters which can help Unfortunately, for both horseplayers and stem the downward trends experienced the racetracks, the average takeout in WPS within the last decade. Foal crops are at all- pools across more than 60 tracks studied is time lows, handle dropped precipitously and 17.3%. has since flat-lined, while industry consolidation is an unavoidable result. But the reality is far worse for bettors in

those pools when factoring in breakage. Racing, as a whole, is incredibly reliant on past performance. For the sake of the Serving as an additional rake on winning industry’s future, we suggest that such bets, breakage increases the effective reliance be limited to the analysis of horses. takeout to near 20% or higher in some The sport’s existing model was developed jurisdictions, reducing the return to bettors decades ago, where elements of pricing, and thus reducing the amount of money that transparency and innovation were far less could be churned back into the pools, important to the sustainability of the increasing handle. business, especially while racing enjoyed a near-monopoly in the legal sports betting As handle on North American racing has environment. Our intent is not to shift pieces essentially stagnated over the last five years, of the proverbial pie from one group to and is down more than 20% for the last another, but rather to grow the pie for all. decade, racing operators and regulators

need to find ways to stimulate wagering. Given improvements in technology, changes One way to help the entire system would be in the way horseplayers bet on races and to return the rightly earned winnings to increased competition from other forms of bettors, without the burden of breakage. wagering, it is imperative the industry updates its model to keep pace with the current environment and then focus on getting ahead of the curve.

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TIF Reports: Penny Breakage September 7, 2018

What is breakage? That means that the total amount to be returned to winning bettors is $82,700 Breakage is the difference between what ($100,000 minus the $17,300 takeout). horseplayers should receive on a winning bet and what they actually receive. The favorite in this hypothetical race has $39,530 bet to win, which converts to an Essentially, breakage is a rounding down of a even money chance (1-1). Take the winning dividend in order to present a tidy returnable winning pool of $82,700 divided payout, eliminating the need for tellers to by $39,530 and the raw return for every $1 count and return pennies to winning on- wager would be $2.0921. Since it is track bettors. The concept has been ever- impossible to pay $0.0021, the rounded present in racing since the pari-mutuel tote amount bettors would be entitled to would system was implemented. Breakage impacts be $2.09 for every $1 wagered. With a $2 every pool in pari-mutuel wagering and can minimum bet, this horse should return never be fully eliminated as there will always $4.18, but yet nearly all jurisdictions in be some rounding required to the nearest racing return just $4.00 to the winning penny. bettor.

Penny breakage exists in various aspects of In this example, $3,640 is retained in daily life. The total you owe once filling your breakage from the race. When added to the gas tank is broken to the penny based on a $17,300 already withheld as takeout, the cost per gallon and the exact filled amount, total amount which did not get back into the using decimals beyond two points. The price hands of the winning bettors totaled of produce, meat or fish might be based on $20,940 – creating an effective win pool a pound, but the scale used to measure how takeout rate of 20.94% from the original much you are actually buying is often $100,000 wagered. (See Exhibit A in the calibrated to two or three decimals. The Appendix for more details) break on your payment goes to the penny. This effective rate is also 32% higher than the Unlike fuel or produce, North American 15.8% rate suggested to racetracks by horse racing does not break to the penny, McKinsey in their recent report to The but in most cases, the nearest dime on every Jockey Club. dollar. For horseplayers, breakage is most notable in pools where winnings are smaller Now consider that breakage happens in – such as WPS – as opposed to exotic pools every race across North America. The effect with higher payoffs. of breakage varies depending upon the particular rounding characteristics of a Here is a basic example of the impact of race’s pools, but the impact is the same – breakage in pari-mutuel tote pools. horseplayers do not receive their fair share of winning dividends. Take a race with $100,000 bet in the win pool where the takeout rate is the Based on a review of various racing aforementioned industry average of 17.3%. commission reports delineating breakage, the Thoroughbred Idea Foundation

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TIF Reports: Penny Breakage September 7, 2018 estimates breakage at roughly 0.45% of total Should you have wagered $20 to win on handle. That suggests breakage totals at in the Preakness, the return was least $50 million per year. With this money $28.00, not $28.80. A $200 wager would returned to horseplayers, we estimate the have yielded $280, not $288. The difference betting churn from breakage to total at is breakage. See Exhibit C in the appendix for least an additional $200 million in annual additional details on the calculation of win- handle. pool breakage from the Preakness.

Breakage in the 2018 Triple Crown The impact stretches to the place and show pools as well. Below, find the place and show The 2018 Triple Crown serves as a useful payouts from the Preakness, along with example of the impact of breakage. what the payouts would have been with breaks to the penny. Notably, Justify Justify returned victorious in all three legs as returned $2.80 to win and place in the the favorite. Each of the win payouts on Preakness, but if penny breakage was Justify were impacted by breakage, with just implemented, he rightfully would have over $1 million retained in total breakage rewarded place backers more than those in for the three wins. the win pool.

Effective takeout was highest at Pimlico, not Preakness Win Pool Breakage $ 355,755 Pay merely because the track has the Place Total Horse Without highest win-pool takeout of the three Triple Payout Breakage Breakage Crown venues, but also because Justify’s Justify $ 2.80 $ 2.94 $ 86,860 actual payout was lowest. The lower the Bravazo $ 7.60 $ 7.72 $ 15,815 payout, the greater the impact of breakage Tenfold because the more money bet on a winning Preakness Place Pool Breakage $ 102,675 return will increase the number of occasions Pay Show Total on which breakage is retained. Horse Without Payout Breakage Breakage Pay Justify $ 2.60 $ 2.64 $ 19,556 Win Total Race Without Bravazo $ 4.80 $ 4.88 $ 11,475 Payout Breakage Breakage Tenfold $ 6.80 $ 6.98 $ 15,704 Derby $ 7.80 $ 7.86 $ 264,413 Preakness Show Pool Breakage $ 46,735 Preakness $ 2.80 $ 2.88 $ 355,755 TOTAL PREAKNESS WPS BREAKAGE $ 505,165 Belmont $ 3.60 $ 3.68 $ 384,863 Breakage in the WPS pools for the Preakness Triple Crown Win Pool Breakage $ 1,005,031 totaled more than $500,000 – the equivalent Win Effective of 2.45% of the $20.59 million bet in those Race Takeout Takeout pools. While the advertised takeout for WPS bets at Pimlico is 18%, the total amount Derby 17.5% 18.17% withheld from horseplayers in those Preakness 18% 20.69% combined pools was nearly 14% higher - a Belmont 16% 18.12% blended WPS takeout of 20.45%.

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TIF Reports: Penny Breakage September 7, 2018

Where does breakage go? breakage is retained by the bet-taker. Place that bet via an ADW and the ADW retains the As with many issues related to North breakage. Place that bet at Keeneland and American thoroughbred racing, individual Kentucky’s breakage rules apply. state or provincial regulations dictate the recipients of breakage. Some are fairly Actions taken to return breakage to its straightforward, others are more complex. rightful owner, the horseplayers, could (See Exhibit B in the Appendix for a selection generate some negative sentiment from its of breakage policies) current recipients. However, the total breakage for a particular track’s races are As betting on horse races in North America now divided across a far larger set of bet- has changed, so too have the recipients of takers, suggesting that the significant breakage. In reality, breakage no longer portion of breakage that may have once flows to its once intended beneficiaries - it is trickled-down to purse funds or horsemen’s no longer serving its original legislative groups from on-track wagers is far smaller in intent. the present than the past.

While on-track breakage is allocated as In 2017, wagers via three of the largest regulators intended, often to different ADWs (TVG, TwinSpires and Xpressbet) 1 parties within a particular jurisdiction, the totaled over $3.57 billion , or nearly 33% of breakage accumulated by internet-based all American handle. While these entities Advanced Deposit Wagering (ADW) entities enjoy the spoils of breakage from their is retained by the ADWs. What was once a winning customers, they would also reap the significant total, the breakage from all bets benefits of increased churn from those on live racing from an on-track audience, the customers enjoying a more sizable winning origin of a race’s bets have been spread far dividend. In other words, bet-takers are and wide thanks to the proliferation of legal currently dividing a pool of $50 million internet wagering. If anything, this should annually. Were that money returned to provide an impetus for racetracks and their horseplayers, the churn could yield more regulators to pursue much-needed changes. than $200 million in new handle. It is beyond time to examine racing’s breakage model. Breakage is retained by the bet-taker. While racetracks adhere to their Actions and jurisdiction’s rules regarding the distribution of that breakage, ADWs retain Recommendations all of the breakage from their customers’ bets. The Thoroughbred Idea Foundation suggests states amend their breakage A $2 win bet on the 2018 policies such that all breaks revert to the won by Justify returns the same $2.80 no nearest penny. matter where it was made, but the $0.08

1 https://www.oregon.gov/Racing/docs/Hub_Data/2018/Handle/ 2018_June__hub_handle_2nd%20QT.pdf

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TIF Reports: Penny Breakage September 7, 2018

Current policies in most states dictate breaks encumbering bettors with cent revert to the nearest dime, although New pieces. Why not? And what York breaks to the nearest nickel for legitimate claims have the State or winnings under $10. In the earlier example the tracks on these moneys? used, a winning return of $2.0921 would be rounded down to $2.09. This is a just and None whatsoever.”2 equitable result for horseplayers. Breakage will never be completely eliminated as Steven Crist, former chief executive of the fractions of pennies still accrue, and these Daily Racing Form, made the only noticeable could continue to be divided as the states improvement on breakage in the 1990s see fit. when a member of New York Governor Mario Cuomo’s Advisory Commission on The battle to revert to penny breakage has Racing in the 21st Century. Among the been a long one, and a review of several recommendations floated by the points from the past lend crucial perspective Commission included a shift in the breakage to this quest. formula.

A noteworthy element in the rationale for Crist strongly advocated for penny breakage, converting to penny breakage is that the but the group settled on a change whereby cited reasoning for implementing breakage – breakage on bets returning between $2 and customer service, moving betting lines and $10 would go to the nearest nickel per $1 helping the racetracks – is no longer relevant bet, as opposed to the nearest dime. This given the nature of wagering in the current result is reflected in the returns one sees in day. New York – mutuels of $3.90 or $5.10, for example. In nearly all other jurisdictions, Fighting for Penny Breakage such returns would reflect as $3.80 and $5.00. The switch has yielded millions more Herbert Bayard Swope, a Pulitzer Prize returned to winning horseplayers in New winning journalist and former chairman of York over nearly 25 years. the New York State Racing Commission, lobbied the New York legislature to revert to Still, Crist suggested in 2014 that penny penny breakage. His comments were breakage was the obvious, righteous path. recorded in the New York Times of March 27, 1940. “The first state that switches to penny breakage will reap a huge “The public should not be illegally bounty of goodwill and loyalty from plucked of its pennies by a scheme its customers. Imagine betting a race invented several years ago and given tomorrow and getting across-the- the specious label of efficiency on the board payoffs of $9.78, $4.31, and plea of saving time and not $2.79 instead of $9.60, $4.20, and $2.60.”3

2 “Urges breakage to cent.”New York Times. 27 March 1940. 3 “Steven Crist: A penny won should be a penny received.” Daily Obtained via ProQuest Historical Newspapers. Racing Form. 9 January 2014. Obtained via DRF.com

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TIF Reports: Penny Breakage September 7, 2018

The state of modern racing wagering is such Among the details in a six-page decision that the “convenience” created by the from the 1947 case of State v. Garden State advent of “this method of computation and Racing Association, the broad purpose of payment” – breakage – is no longer breakage was outlined. justified.

“It is apparent that this method of The advent of $0.10 minimums for computation and payment is for the superfecta wagers has exhibited racetracks’ convenience of the permit holder willingness to begin paying down to the [racetrack] in the operation of the penny. A superfecta returning $125.60 for a pari-mutuel system of wagering.”4 $2 bet would yield $6.28 to the winning $0.10 bettor. If the industry can accept The retention of breakage remains paying a portion of its customers to the unchanged to this day, but the way a bet is penny, it should accept paying all of its made, either on track, off-track or customers as such. electronically, has very much changed since the above comments from the 1940s and Impact of Penny Breakage even from Crist’s work in the 1990s. In other words, breakage policies have not been The effect of breakage on a single winning formally revisited in the internet era. bet is small, but because breakage occurs in every pool, in every race, the annual total is The vast majority of handle now comes from significant. As place and show bets return remote sources. On-track attendance has smaller overall dividends to winning bettors, dwindled and even those making bets at the breakage in those pools represents a higher racetrack often do so with cash equivalents, percentage of the overall pool. such as betting vouchers via self-service wagering machines, rarely involving a As stated, we believe total breakage human teller doling out pennies to queued equates to roughly one half of one percent customers. Nearly all ADW betting is entirely of total handle in America, at least $50 cash-less, with transactions effected through million per year on roughly $10 billion. The bank transfers. Players in live-money win pool from the Triple Crown races handicapping contests such as the Breeders’ previously cited generated $1 million in Cup Betting Challenge bet millions in a day breakage alone. without ever handling cash. Computer- assisted wagering teams often have direct At $50 million per year, we believe electronic access to the tote pools and can horseplayers could churn through place hundreds of bets in an instance. subsequent bets worth more than an additional $200 million annually,5 a figure

5 $50 million wagered with a blended 20% takeout yields $40 million in return to bettors. $40 million wagered yields $32 million 4 “State v Garden State Racing Association.” 136 N.J.L. 173 (N.J. returned. A total of eight instances from a $50 million base yields 1947). Obtained via Casetext.com/case/state-v-garden-state- $208 million in additional handle if all returns were reinvested. racing-assn

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TIF Reports: Penny Breakage September 7, 2018 which represents an increase of more than customers’ breakage, these programs 2% of nationwide handle. The handle should be expected to experience ongoing generated through additional betting churn declines, particularly in jurisdictions with would represent the largest single year lower handle which have experienced the percentage rise in handle over the last 15 industry’s greatest handle declines. years. The state of New Mexico splits breakage A shift to penny breakage will also enhance with half being retained by racetracks and the attractiveness of place and show betting, the other half going to New Mexico-bred increasing the probability of having a purse supplements. From 2014 to 2016, the winning day at the races – an essential when state of New Mexico saw total breakage it comes to retaining newer, casual racing revenue drop 31%, from $881,663 to fans – and incentivizing more professional $608,751.6 Maiden special weight races for players to dip into these pools. Place and New Mexico-bred horses at Sunland Park in show pool payouts are naturally smaller than January 2017 offered a purse of $24,500 their exotic counterparts as the chances of compared to $23,400 one year later, a 4.4% winning are much greater. Breakage in its decline in prize money. While this cause and current form savages the profits of these effect is not direct, the trend is hardly smaller payouts, reducing churn even positive for the future. further, and essentially serves as a regressive tax on newer or casual horseplayers. Negative Breakage

The churn created by returning breakage A by-product of a shift to penny breakage produces diversified revenue for more could also yield the elimination of stakeholders as a result of additional requirements to offer a guaranteed gambling by horseplayers – more revenue minimum return – often $2.10 or $2.20, for racing operators (through takeout), for depending on the jurisdiction. horse owners (through additional funding for prize money via takeout) and for As it stands under current protocols, when regulators (through taxes via takeout). the calculated, pre-payout dividend falls under $2.10 or $2.20 (a result of an At a time when all betting was conducted on incredibly short-odds favorite winning or track, and thus all breakage was divided as landing a first-three placing), the winning the host track’s regulators dictated, some payoff must be rounded-up to this pre-set jurisdictions where purse funds or state minimum, leaving bet takers to foot the bill breeding programs gained a cut of the for this anomaly. breakage benefitted from such funding. A shift to penny breakage would eliminate Negative breakage is also known as a “minus most of such funding. However, with an pool” – where the amount required to pay ever-growing percentage of wagering the minimum return as dictated by the shifting to ADWs, which retain their

6 New Mexico Racing Commission Annual Reports. http://www.nmrc.state.nm.us/about-the-commission.aspx

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TIF Reports: Penny Breakage September 7, 2018 jurisdiction exceeds the size of the pool to by NYRA after state taxes. In the same year, make the payout. NYRA paid out $1,846,438 in minus pools, or negative breakage.8 The net revenue to the Steve Crist’s logic, offered in his previously track (after-tax breakage less the minus pool cited 2014 article, serves as the standard on payouts) was only $101,954, or just 3.3% of negative breakage whilst advocating for a the original breakage collected. change to penny breakage. Smaller tracks cannot bear the higher “Going to penny payoffs would mean burden of a particularly large minus pool. the end of the ‘bridge-jumping’ era, The same New York State Gaming as a minimum payoff of $2.01 instead Commission report which provided the of $2.10 would make show bets on NYRA figures above showed two of the supposedly sure things unattractive. state’s smaller standardbred tracks paid out You would have to be right 200 times more in minus pools than they collected in out of 201, instead of the current 20 breakage in both 2016 and 2017. The times out of 21, just to break even. perceived positive benefits of breakage to racetracks may not be as significant as once “It’s an era worth ending. There is considered in light of their need to fund absolutely no logic to having an minus pools, which could be eliminated with artificial, guaranteed minimum penny breakage and a cancelation of which, in fact, violates the whole mandatory minimum payout requirements. point of the pari-mutuel system and the neutrality of the stakeholder. Operational Adjustments with Penny Breakage “Some players may lament the absence of the occasional Without doubt, on-track operations require opportunity to play against a bridge- an adjustment should penny breakage be jumped horse, but they will do far adopted. While lower bet limits, such as the better in the long run by getting the $0.10 superfecta, have yielded some 7 payoffs they deserve on every race.” payouts to the nearest penny, most tellers in on or off-track wagering facilities do not The elimination of minus pools is a carry pennies and choose to round these meaningful benefit to bet-takers following payouts, on their own, to the nearest nickel a switch to penny breakage and the or dime. Anecdotally, we are confident some subsequent elimination of a mandatory customers have no issues with this status minimum payout. quo.

In 2017, the three tracks of the New York Should penny breakage be adopted, brick- Racing Association (NYRA) generated and-mortar facilities on or off-track handling $3,061,894 in breakage revenue for the host, but of which only $1,948,392 was received

7 “Steven Crist: A penny won should be a penny received.” Daily 8 New York State Gaming Commission Annual Report – 2016, Racing Form. 9 January 2014. Obtained via DRF.com 2017. https://www.gaming.ny.gov/about/index.php?ID=3

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TIF Reports: Penny Breakage September 7, 2018 cash could adjust their mutuels operations in When the raw dividend for a horse falls at a several ways: certain point or below, the rounding account accepts the breakage. When the raw  Pennies could be added to the cash dividend is at or above a certain point, the drawers (this exists in some dividend is rounded up with the difference jurisdictions already); coming from the rounding account. This breakage accounting method is applied in  Select windows with coin dispensing Hong Kong,9 without controversy, where all machines, similar to those in use at bets are broken to the nearest HK$0.50 retail points, could be used to (US$0.06). facilitate payments of coins; If the regulatory environment renders it  Tracks could pay odd cents in impossible to shift to penny breakage, vouchers, enabling customers to rounding accounts could take all raw collect them throughout the day for payouts as follows: later collation, betting or eventual payment, potentially from a  $.0001 - $.0499 = round down to designated window; $0.00 (this portion = positive breakage for the bet-taker)  A “cash-out” machine, similar to those in use by casinos, could be  $.0500 - $.0999 = round up to $0.10 enabled to cash vouchers, perhaps (this portion = positive breakage for limited to those only under $1.00 or the bettor) even for larger payouts. The technological development required to Options are available to the industry to effect the fluctuations of a rounding account adopt minor adjustments to the payout would likely require more investment than process without a substantial disruption to an outright shift to penny breakage, and thus the status quo. As cited previously, a may be considered an inferior alternative. growing percentage of customers’ wagering Still, the rounding account should be given via ADWs will dull the operational impact of consideration as a viable option given its penny breakage. effective use overseas and representative of some degree of compromise between bet- Alternative to Penny Breakage takers and bettors.

An alternate course of action to adopting Additional Considerations penny breakage could be the establishment of rounding accounts, which serve as a The current system of breakage has long middle ground for breakage. been implanted to the business model of bet-takers. A shift to penny breakage would

9 https://special.hkjc.com/racing/info/en/betting/guide-flexibet- Dividend.asp

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TIF Reports: Penny Breakage September 7, 2018 likely impact some of the current operating practices of ADWs, likely more so than A variety of options to minimize or eliminate traditional brick-and-mortar locations. breakage are available to racing operators Rebates received by some customers could and their regulators for consideration. Given be reduced. Signal fees may change. These the prominence of ADWs, which by their side effects have not gone unnoticed, but very nature do not require the counting or should be measured in light of the physical delivery of cash, most wagers are increasingly competitive legal wagering often just numbers on a screen. marketplace. Retaining breakage in its current form is an The rising presence of fixed-odds sports opaque practice at a time when pricing wagering, and the existence of exchange transparency is essential to customers. It is wagering in racing, albeit with limited also an antiquated concept in an age where distribution at present – both products the modern customer experience has little without breakage – should serve as bright to do with standing in line to collect cash. alternatives to price-sensitive players Switching to penny breakage is an obvious, enabled to access such markets. but much needed change.

The overall takeout on both forms of Racing operators and regulators should pave wagering is lower, and while the legal the way advocating for breakage reform. exchange wagering offering via Betfair does Early actors would likely gain some short- offer a funding model back to the industry, term benefit given these actions. In the long- the path is less clear at present with fixed term, however, racing as a whole will benefit odds wagering. by a concerted effort from all involved to address long-standing but solvable Penny Breakage - challenges that a modern sport, benefitted by modern technology, should tackle. The Way Forward All stakeholders in racing should desire an Racing’s pricing model is far from ideal. increase in handle and revenue. Adopting Overhead for operating the sport is these recommendations seeks to grow the significant. But when compared to the pie for the industry, not just shifting slices pricing model of alternate forms of gambling between stakeholders. Penny breakage – particularly sports betting, with an gives more money to horseplayers to churn, approximate takeout rate 4.76% (with no increasing handle. Modernization in racing is breakage), and which is poised to explode a necessity, advocating for and adopting across America – a modernized approach to penny breakage would be a meaningful step eliminating breakage should be a priority to in that long-overdue process. enhance racing’s attractiveness and sustainability to bettors.

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TIF Reports: Penny Breakage September 7, 2018

APPENDIX

Exhibit A – Sample Race Breakage Calculation

A Total win pool handle $ 100,000

B Average win pool takeout rate $ 17,300

C Total pool remaining to calculate winning dividend $ 82,700

D Total win pool on Horse XYZ $ 39,530

E Raw return on every $1 bet on Horse XYZ (C/D) $ 2.09

F Actual return on every $1 bet on Horse XYZ $ 2.00

G Breakage on every $1 bet on Horse XYZ $ 0.09

H Total breakage (D*G) $ 3,640

J Takeout + Breakage (B+H) $ 20,940

K Effective Takeout Rate (J/A) 20.94%

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TIF Reports: Penny Breakage September 7, 2018

Exhibit B - Breakage Distribution by Select States

**Details in above table were collected from varied publicly available online sources. Some details may have changed since the time such sources were originally published. Breakage from ADWs is retained by the ADW.

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TIF Reports: Penny Breakage September 7, 2018

Exhibit C – Preakness Win Pool Breakage Calculation

A Total Preakness win pool $ 13,226,989

B Pimlico win pool takeout (A*18%) $ 2,380,858

C Total pool remaining to calculate dividend (A-B) $ 10,846,131

D Total win pool on Justify $ 7,493,126

E Raw return on every $1 bet on Justify (C/D) $ 1.4475

F Actual return on every $1 bet on Justify $ 1.40

G Breakage per $1 bet on Justify (E-F) $ 0.0475

H Total breakage (D*G) $ 355,755

J Total retained out of Preakness win pool (B+H) $ 2,736,613

K Effective Takeout Rate (J/A) 20.69%

Note Lines E&G – Raw return has $.0075 remaining. Even with penny breakage, the return would round down to $1.44 and the $.0075 would remain as breakage.

Acknowledgements

The Thoroughbred Idea Foundation would like to thank several experts for their input, specifically Marshall Gramm, Professor of Economics (Rhodes College – Memphis, Tennessee) and Maury Wolff, racing economist and horseplayer. Thanks to Josh Carter for identifying the Illinois breakage rules as shown above, a change from our original publication.

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TIF Reports: Penny Breakage September 7, 2018

Board of Directors Rory Babich, Craig Bernick, , Catherine Donovan, Lesley Howard, Corey Johnsen, Paul Matties, Justin Nicholson, Tom Reynolds, , Jack Wolf

Executive Director Patrick Cummings

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