Saying that Kentucky has taken care of ranchers, owners and racers, a prominent lawmaker has voiced support for reducing odds on bets on state races, a move will increase payouts to winning equestrians.
Congressman Adam Koenig, co-chair of the Pari-Mutuel Payroll Tax Task Force, expressed support for reducing the breakdown rate during the group’s November 19 meeting in Frankfort. The task force was formed after the law protecting historic horse racing games when betting pari-mutuel was signed into law in February 2021.
Friday marks the fifth and final hearing of the task force on tax and pricing issues related to HHR and pari-mutuel bets.
“Over the last few months we’ve heard that there are really three things we need to make racehorses successful. We need breeders and owners, we need races and we need people. We were interested in the first two,” Koenig said of the money from HHR that has benefited Kentucky owners, ranchers and racetracks. “As far as I know, we’re going to take care of the last group. And this is one of the possible – and I think – easiest and best way to do it.”
Koenig offered that support after Pat Cummings, executive director of the Thoroughbred Ideas Foundation, which advocates for breeders and horse owners, outlined how Kentucky’s 10 cents win has become archaic in an era where many bookmakers place bets through accounts instead of live bets. Cummings notes that as the industry moves toward the current breakout system, it stands to reason that pari-mutuel traders won’t want to waste time counting every penny.
In determining winning payouts from pari-mutuel pools, the tracks rounded the payout — a process required in Kentucky and other states. Kentucky law now calls for rounding down to the nearest 10 cents for every dollar wagered. This results in a payout that will pay, such as $9.78, that returns only $9.60.
TIA supports the one-cent breakout level. In short, this means that the current winning bet payout that pays $9.60 could pay $9.78, with $20 the winning bettor will get an extra $18 and for the winning bettor. Winning $200 bet adds $180.
Cummings argues that not only has the need for bankruptcy gone, the sport’s business model has also evolved. With most betting taking place off-the-shelf, off-site bettors — deposit bets, off-the-shelf bets, and emulated shops — are the biggest beneficiaries of the coin model. cents with the fastest growing ADW in that group.
According to the TIA, in the most recent fiscal year, Kentucky racetracks withheld $310,000 from bets made on their races. But the bettors (OTB, ADW and other simulcast stores) kept $9.3 million from all those coins rounded to dimes. That means 96% of the money withheld from the winning payouts rounded down to the nearest coin is retained by the offline dealers. Remember that ADW already has lucrative deals — as a percentage of pari-mutuel revenue from takeout — in place.
Cummings says Kentucky can expect more bets from customers excited about the opportunity with increased winnings. He notes that low-paying bets like place bets and show bets will suddenly offer more value.
“Very aptly, Kentucky could be the first to get these well-rounded coins back into the hands of customers,” Cummings said. “Let the customer choose what the customer wants to do with it. Of course, having a strategic advantage comes first, giving the Kentucky race an edge as a state where the races are beneficial. to its customers — the betting public. Customers who bet on Kentucky racing will receive higher returns than those who do not make these changes.”
After voicing support for the idea, Koenig also called for further contributions on the topic from the Kentucky racetracks. That could be interesting as Churchill Downs Inc., besides owning Kentucky Thoroughbred tracks Churchill Downs and Lawn Park, which also operates the highly profitable TwinSpires.com pre-stake betting site.
