Breakage in horse betting isn’t something that’s broken. It actually refers to the rounding down of the odds at the tote board in every racetrack in this country. In a pari-mutuel betting pool, breakage can affect how much payout you receive once you cash in on your winning bets at the window.
In the United States, a dime breakage is used. This means that the odds are rounded down to the nearest tenths. For example, if a fair odds on a particular horse are placed at 5.73/1, it would be rounded down to 5.7/1 before the payoffs are calculated. Following the usual computation, dime breakage would usually round down payouts to the nearest multiple of 20 cents. So instead of receiving a payout of $15.33, you will receive only $15.20 when you cash in your winning ticket.
How does breakage affect your bets?
Depending on the type of bet you place, breakage can either have no effect or take out a huge dent from your winnings. You won’t know ahead of time how much a breakage is going to cost you since in a pari-mutuel pool, the amount can’t be determined until the windows close. However, a safe assumption would be that your payout can reduce by as much as 19 cents and about 10 cents on the average depending on the odds
When you think about it, 10 cents isn’t much when you’re expecting a payout of say, $12. However, when you’re talking about winning minimum wagers such as $2.40, then a breakage of even 5 cents can be very steep.
One interesting thing to note about breakage is that it’s better to play a horse with odds placed at 1/9. This is because for win wagers, the minimum payout is $2.40 and even if the payout is supposed to be lower for a 1/9 odds, the track is required to give the minimum payout, so there’s no breakage to worry about here.
How do you get your wagers from getting affected by breakage?
There’s really no way you can avoid it. You can simply choose to bet in situations when breakage won’t figure in heavily, for example, in longshots or in exotic wagers like trifectas. Breakage is an issue in favorites and in place and show pools. But this approach would severely limit your betting. It’s much better to simply view breakage as part of the whole process and that while it could cost you heavily on certain days, it will also not matter much in others. Eventually, it will just even out.
Breakage shouldn’t take the fun out of betting.