In Canada, bettors wager into a pari-mutuel system for which each particular bet type [Win, Exacta, Pick 4, etc.] has its own pool and takeout rate. For every dollar wagered into a pool, a specified percentage ‒ known as takeout ‒ is deducted, and the remaining amount placed in the pool is split among all winning tickets.
Essentially, horseplayers are not playing against ‘the house’ but instead are matching wits – and wallets – against their fellow players. A track does not make any more profit from a favourite winning versus a longshot.
To simplify, imagine a track has a 15% takeout on Win, Place, and Show wagers. In a race of five horses, an individual $50 Win bet is placed on Horses 1-3, one $100 Win wager on Horse 4, and Horse 5 receives three individual Win bets of $50 each.
If the dollars wagered to Win totaled $400, the effective takeout (15%) would be $60. The remaining $340 in the pool would be split by the bettors holding tickets on the winning horse. If Horse 1 were to win, then the single bettor who wagered $50 would be returned $340, for a profit of $290. A win by Horse 4 would return $340 to the bettor of the $100 wager, netting them a profit of $240. If Horse 5 won, then the three bettors who each wagered $50 would split the pool, receiving $113.30 for a profit of $63.30 each. Any remainder is referred to as breakage, or what is left over after rounding off the payout.
Takeout rates vary track to track and wager to wager across the country. For example, Century Mile in Alberta offers a nation-wide low 14.75 percent takeout rate on Win wagers, compared to the 19 percent Win takeout rate offered by Assiniboia Downs at the high-end of the spectrum. Using the example above and applying it to Assiniboia Downs, the adjusted takeout on $400 in Win wagers would be $76, leaving $324 in the pool to be split among the winning tickets.
For horseplayers, the lower the takeout rate the better. A higher return on winning wagers also contributes to an increased churn, or rollover of gambling dollars into other wagers. An increase in betting volume is a positive for horse racing across the board.
A reduced bet minimum is likely to increase the overall pool size, however there is the probability of a higher number of winning tickets, reducing the margins of profit.
Takeout Rates across Canada
(ASD = Assiniboia Downs; CTN = Century Mile; FE – Fort Erie; HST = Hastings; WO = Woodbine)
Bet Minimums across Canada