If you bet on horse racing, there may be one essential thing you are overlooking in your betting strategy – takeout rates.
Many bettors don’t know what takeout rates are or how they affect winnings, so we’ve put this guide together that explains everything you need to know.
What Are Takeout Rates?
In short, takeout rates are pre-payout taxes applied by a horse racing track on every bet made at a race meeting.
For example, if you make a $100 bet on a horse to win a race at odds of +1,000, and the horse wins, your profit before the takeout rate is applied would be $1,000.
But, before you decide how you’re going to spend your $1,000 profit, you have to factor in the cut the track will take.
For our example, let’s say the track has a 10% takeout rate on single bets; in this case, your winnings would be $900.
Racetracks have to apply takeout rates to survive. It’s an essential part of the sport.
Owners, trainers, and jockeys take their wages via takeout rates, and the tracks fund maintenance and upkeep of their grounds with their percentage.
However, this doesn’t make it any less impactful on your bottom line.
Additionally, the 10% we used in the example above would be on the extreme low end of the rates and some tracks can charge as much as 25%, depending on the type of bet.
How Do Takeout Rates Affect Payouts?
Takeout rates affect payouts in a pretty severe way, especially if the track can take as much as a quarter of your winnings.
If you’re working with a specific betting strategy and on a set budget (which you should), it’s important to factor this in.
If you don’t know the takeout rate at a particular track, it’s essential to try and find out. Good luck, though – often, tracks try to keep this information as quiet as possible to avoid turning bettors off.
It definitely won’t be advertised at the cashier’s desk when you go to make a bet. The best way to find takeout rates is to do your own research. Often, the information is available online with a bit of digging.
Takeout rates also vary depending on the type of bet you’re making.
For example, a single bet (straight bet) on a horse to win will have a different rate to a pick 4 (exotic bet) where you have to combine four winning bets into one.
In general, the bigger the odds of the bet, the higher the takeout rate will be.
There are some exceptions, though.
Some tracks encourage bettors to combine multiple bets, offering discounted takeout rates for pick 5 or 6s, making their potential payouts much larger, but of course, there is much less chance of them landing.
An example would be when in 2017, Kentucky Downs racetrack in Franklin, Kentucky, applied a rate of 16% on bets to win, place, or show (all single bets).
But for Pick 4 and Pick 5 bets, the track only had a takeout rate of 14%, giving a small but welcome bonus for successful bettors.
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Takeout Rates Compared State By State
Takeout rates are generally set at state level and are consistent for each racetrack within a particular state.
Also, note that some states have different rates depending on whether the race involves Thoroughbred horses.
Arizona
- Up to 25% on win-place-show wagers, up to 30% on two-horse wagers, up to 35% on wagers involving more than two horses in one or more races.
Arkansas
- 17% on single wagers and 21% on multiple wagers.
California
- 15.43% for win-place-show and 20.18% on exotic wagers for Thoroughbreds.
- 15.63% for win-place-show and 20.38% for exotic wagers for Quarter Horse meetings.
- 16.43% for win-place-show wagers and 24.18% for exotics at Harness meets.
- 16.77% for win-place-show and 21.52% for exotics at Fair meetings.
Colorado
- 18.5% on straight wagers, and 28% on exotics.
Delaware
- 17% on straight wagers with an additional 2% on daily doubles and exactas, plus 8% on other exotic wagers for Thoroughbreds.
- 18% on straight wagers, 20% on multiple wagers on an 8-horse field, and 25% on multiple wagers on a 9-horse field for Harness.
Florida
- Set by individual tracks.
Idaho
- 23% on straight wagers, 23.75% on exotics.
Illinois
- 17% on straight wagers, 20.5% on two-horse wagers, and 25% on three or more horse wagers.
Indiana
- 18% on straight wagers, and 21.5% on exotics.
Iowa
- Up to 18% on win-place-show, 24% on wagers involving up to two horses, and 25% on other wagers.
Kansas
- 18% on win-place-show and 25% on multiple wagers if authorized by the racing commission.
Kentucky
- At tracks with over $1,200,000 daily average, 16% on straight wagers and 19% on exotics for Thoroughbreds.
- At tracks under $1,200,000 daily average, 17.5% on straight wagers and 19% on exotics for Thoroughbreds.
- 18% on straight wagers and 25% on exotics for Harness.
- 18% on straight wagers and 25% on exotics for Quarter Horse, Appaloosa, and Arabian.
Louisiana
- 17% on win-place-show, 20.5% on two-horse wagers, and 25% on three-horse wagers.
Maine
- 18% on straight wagers, and 26% on exotics.
Maryland
- 18% on straight wagers, 21% on two-horse multiples, and 25.75% on three-horse multiples for Thoroughbreds.
- 25% on all wagers at Fair Hill.
- Tracks over $600,000 daily, 17% on straight wagers, 19% on two-horse multiples, and 25% on three-horse multiples for Harness.
- Tracks under $600,000 daily,18.75% on straight wagers, 20.75% on two-horse wagers, and 26.75% on three-horse wagers for Harness.
Massachusetts
- 19% on win-place-show wagers, 26% on exotics.
Michigan
- 17% on straight wagers, up to 28% on multiples.
Minnesota
- Not to exceed 17% on win-place-show wagering, 23% on exotic wagering.
Montana
- 20% on straight wagers and up to 25% on exotics.
Nebraska
- Not less than 15% or more than 18% on straight wagers. Up to and including 24% on exotic wagers.
New Hampshire
- 19% on win-place-show wagers, 26% on multiple wagers for Thoroughbreds.
New Jersey
- 17% straight wagers, 19% on two-horse selections, and 25% on three-or-more-horse selections.
New Mexico
- 19% on win-place-show, 21%-25% on exotic wagers for Class A tracks.
- 18.75% to 25% on win-place-show, 21% to 30% on exotic wagers for Class B tracks.
New York
- 14% on straight wagers, 17.5% on multiple wagers, 25% on exotics,15% on pick 6 with no carryover – 25% with carryover at NYRA tracks.
- 18% on straight wagers, 20% on multiple, and 25% on exotics for Harness.
Ohio
- 18% on win-place-show wagers, and 22.5% on all other wagers.
Oklahoma
- 18% on win-place-show wagers, 20% on multiple-horse wagers, and up to three-race wagers. 25% on multiple race wagers involving more than three races.
Oregon
- 19% on wagers with one wagering interest, 22% on wagers with two or more wagering interests for commercial meets. Up to 22% at fairs and non-profit meets.
Pennsylvania
- 17% on regular wagering pools, 19% if the average daily handle is less than $300,000, 20% on exactas, daily doubles, quinellas, 26-35% on trifectas.
Texas
- 18% on regular wagers, 21% on two-horse wagers, and 25% on wagers involving three or more horses.
Virginia
- 18% on straight wagers, and 22% on all other wagers.
Washington
- 16.1% on win-place-show wagers, 22.1% on all other wagers (1.1% less for non-profit meetings).
West Virginia
- 17.25% on win-place-show wagers, 19% on two-horse wagers, and 25% on wagers on three horses or more.
Summary
As you can see, different states, racetracks, bet types, and races have different takeout rates.
As a bettor, knowing exactly what the rate is before you start is crucial.
Knowing what your return will be is must-know information before making any bet, especially if you have a target number of returns or a set amount of money to wager.
Use this guide as a starting point, but complete your research to ensure you know exactly what takeout rate a track will charge in your next bet.
Lead image: Philippe Oursel/Unsplash