Penny Breakage | Horse Racing Free Tips

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.”

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Better Than $1.1M Returned to Bettors Via Penny Breakage

Through the conclusion of racing at Keeneland Sunday Oct. 15, more than $1.1 million has been returned to bettors since the introduction of penny breakage–rounding pari-mutuel winnings to the penny and not the dime–less than two months ago, according to a blog post from the Thoroughbred Idea Foundation (TIF).

TIF was a vocal supporter and champion of the penny breakage provision, the first of its kind in North America as part of broader legislation designed to standardize pari-mutuel taxation.

“The total is even higher than $1.1 million, that is just in the Thoroughbred win, place and show pools” said TIF Executive Director Patrick Cummings. “The breaks from exotic pools and Kentucky's Standardbred races add even more to the total.”

According to the post, in previous times, if an unrounded $1 return for a bet was $5.0918, under the rules of dime breakage, an even $5 would be returned to gamblers. Under the new rules, a winning bettor receives $5.09.

“Based on observations across Kentucky's tracks and discussions with tellers, there has been a short acclimation period for everyone to get used to it,” Cummings added. “But now that customers receive a 'full' dividend, not only is there no going back, but we start looking elsewhere wondering why others are not as progressive as Kentucky.

“It's been seamless for ADW bettors and overall, the feedback TIF has received has been entirely positive.”

The penny breakage provision was included in Kentucky House Bill 607 and was passed by both legislative branches in March before being signed into law the following month.

“The legislative support to accomplish this cannot be understated, led by Representative Adam Koenig in the House and Majority Leader Damon Thayer in the Senate,” Cummings said. “They mustered the backing of a vast majority of their colleagues to be the first in America to right a multi-generational wrong.

“The penny breakage provision was a small part of a much bigger bill and it is paying back horseplayers that bet Kentucky races, enabling them to churn more across the sport.”

The Keeneland-hosted Breeders' Cup Nov. 4 and 5 will include the enhanced payouts for the first time, as will next year's Kentucky Derby and Kentucky Oaks.

“Other states and tracks should want the same, following Kentucky's lead. But until then, Kentucky pays you more,” said Cummings.

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United Tote Fined for Penny Breakage Miscalculations

After failing to properly calculate Kentucky's newly implemented penny breakage at two Standardbred race meets in July, the totalizator services provider United Tote Company has been fined and ordered to “seed” a future exotic wagering pool with $4,445.77, which equals the amount that the Kentucky Horse Racing Commission (KHRC) determined should have been paid out to bettors had the calculations been correct.

According to an administrative ruling dated Sept. 12 and signed by Waqas Ahmed, the KHRC's director of pari-mutuel wagering and compliance, United Tote “provided improper totalizator services” on races conducted at Oak Grove (July 17-19) and The Red Mile (July 31).

The first of those violations occurred two days after Kentucky first rolled out its mandate that dime breakage be replaced by bettor-friendly penny breakage.

According to the ruling, the mistakes also occurred despite the fact that United Tote “completed pre-meet totalizator tests with KHRC personnel using the correct breaks.”

The ruling stated that on July 20, United Tote submitted an Oak Grove incident report “showing that prices were calculated with ten-cent breaks instead of the required penny breaks, with a $1,916.56 liability owed to the public.”

Then on July 31, a separate incident report from The Red Mile stated “that prices were calculated with ten-cent breaks instead of the required penny breaks” but only for “remote sources outside of Kentucky that wagered on Race 2 onward on that date.” The liability owed to the public was $2.529.21, according to the KHRC.

According to the ruling, “ordinarily, the fine would total $1,000 for each day of violation; however, due to mitigating factors, that amount is reduced to $500 from July 17 through July 19 and July 31. According to the KHRC, those factors were:

“Oak Grove Racetrack has been conducting pari-mutuel wagering before the new breakage requirement that went into effect on July 14. The above events only impact the last three race dates of this track's 2022 race meet.

“[United Tote] calculated and paid the correct prices for all Kentucky sources for the wagering conducted on Red Mile Racetrack's meet. However, the penny break was not applied to Race 2 onward for all other sources due to a software defect.

“The violations were not intentional [and] the [United Tote] fully cooperated with the KHRC on determining the liability due,” the ruling stated.

Bettors will theoretically get repaid through the mandated pool seeding, which must occur “at a harness racetrack in the calendar year 2022 [with] all details…approved by the KHRC.”

In addition, United Tote “must submit its process for complying with regulatory requirements related to providing totalizator services,” the ruling stated.

It was unclear at deadline for this story whether United Tote is appealing the penalties.

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NY Equine Medical Director Scott Palmer Talks StrideSafe Technology On Writers’ Room

As the New York State Gaming Commission's Equine Medical Director, Dr. Scott Palmer is responsible, more than anyone else in the state, for horse safety. It's a responsibility Palmer takes very seriously, and with new wearable biometric technology called StrideSafe, Palmer and his team are doing revolutionary work in detecting potential musculoskeletal injuries, which lead to the majority of horse fatalities, in their earliest stages. Tuesday, Palmer joined the TDN Writers' Room presented by Keeneland as the Green Group Guest of the Week to explain the technology and process of a program that, if adopted nationwide, could help get the U.S. Thoroughbred fatality rate as close to zero as possible.

“As we know from our 20 years or so of research in this area,

85% of the horses that break down have preexisting musculoskeletal disease or damage, and if we can identify that damage early, we can intervene and take care of it,” Palmer said. “You've probably heard a lot about PET scans and CAT scans and advanced imaging. These are great diagnostic tools, but they're not great screening tools because first of all, they're not readily available. Second of all, they're not inexpensive. Third of all is that they are not necessarily accurate as to what we're measuring. So they're terrific, but we need a screening device to identify horses that need to go get that imaging, because we can't do a PET scan on every Thoroughbred racehorse. It's just not practical.

“[StrideSafe] is like a check engine light in your car. When you're driving down the road and the check engine light comes on, that doesn't mean you have to stop the car immediately, but it means you're going to get this thing looked at because something's going on here. If you don't do that, something bad is going to happen. So that's what we've got here is a check engine light, and with that kind of information, that's going to help us to identify these horses at risk of injury, because we can see lameness before a human being can see it or before the jockey can feel it.”

The StrideSafe device is about as big as a cell phone and is put in the saddle cloth of racehorses at New York tracks when they run. It detects any deviation in each facet of a horse's stride and labels that horse in the colors of a traffic light–green, yellow and red. From their pilot study last year, Palmer and his team found that horses labeled red were much less likely to run back in the same amount of time as green or yellow horses.

“If a horse is a red-flag horse, it means this horse has got something significantly abnormal about his gait. And that is meaningful,” Palmer said. “That's a danger sign if we see these red signals. A horse can have a different degree of variation from normal, and we're not too worried about the yellow horses. The yellow means okay, caution light, slow down. Take a look. The red light means you really have to get this horse looked at because something's going on here. And maybe it's not obvious to the human eye right away. The horses that were red [in our study], only 40% of those horses made it back to train or race within four months. Almost 80% of the greens and yellows did. So in other words, what this means is that I can accurately tell a trainer, if you get a red alert, you've got a 40% chance of making it back to race in four months. That's a really bad business model, if nothing else, and it also means that your horse is likely at risk of injury. So we're going to record every horse in every race at Saratoga, and we've been working with Joe Appelbaum and NYTHA, where for all the red reports, I will notify Joe and he's going to send an email to the trainer of that horse, saying this is what it means, this is what it doesn't mean, this is what you need to do.”

Elsewhere on the show, which is also sponsored by Coolmore, the Pennsylvania Horse Breeders Association, XBTV, West Point Thoroughbreds and Legacy Bloodstock, the writers previewed the highly-anticipated Saratoga meet, discussed the suspension of Juan Vazquez and celebrated the penny breakage era starting in Kentucky. Click here to watch the show; click here for the audio-only version or find it on Apple Podcasts or Spotify.

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