Breakage
Breakage is a rounding down method that all Pari-mutuel racetracks use
before figuring the final dividend to be paid to the winners. Most breakage
is rounded down to the nearest $.10 on the dollar and this is called dime
breakage or 10-cent breakage. The state of New York will round down on
lower odds horses to the nearest $.05 on the dollar and this is referred
to as nickel breakage or 5-cent breakage. The idea behind breakage was to
round down the winning payout to a number that was quick and easy to
handle for the mutual clerks. Breakage helps offset overhead and gives
the racetracks and OTB parlors added revenue.
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