" The prospects for winning in the pari-mutuel markets, as in every other market, are fading because of rising taxes on winners.  From a microeconomic point of view, pari-mutuel taxes creep persistently higher steadily reducing the return to investors.   A high 10-percent when enabling legislation was first passed in the 1930s, the takes have almost doubled since then for regular betting and more than doubled on exotic wagers.  Their near confiscatory levels have sharply curtailed growth in racetrack attendance and betting and, in many areas, declines have set in."

Burton P. Fabricand, The Science of Winning (1979)

Takeout. Legislated thievery. Imagine a real business, where when you plopped down $10 to purchase a product that they start the transaction by taking $1.90 (19%) from the $10 to pay to their employees and owners. Now, what would you like to do with the remaining $8.10? Plain and simple, that dog won't hunt when we're talking about real business! The single most important reason that takeout levels are what they are is that they (the track owners and horse owners) can get away with it. The second most important reason that takeout levels are what they are is that we horseplayers let them get away with it .   And look at the quote above--this has been going on for 30 years since then!

When approached about lowering takeout most track owners' say, “We can't put it any lower. We'd have to go out of business.” Fine, given the quality of the product being presented at many tracks, that is what they should do: Go out of business. Look at tracks putting on a daily parade of 5- and 6-horse fields. Even more pathetic are the horseplayers who are supporting that menagerie. Isn't any horseplayer capable of saying, “No”, to an inferior product? Is the pressure to bet that severe? Look at the choices we have today as horseplayers. Is the compulsion so strong that we can't resist another bet on a crappy field at a crappy track?

Here are a some tables designed to compare takeout rates at various thoroughbred venues in North America.  The first table simply shows the takeout rates that are in play for the various wagers being offered.  (I don't claim that this table is 100% correct.  It's the best that I could do and I had to compile it using several sources.  And, my thanks to those sources for the info.)
Takeout Rates.

The next table shows the effect of takeout on a Win pool and the bets on one horse and how the different takeout levels affect both the odds and the $2 Win payoffs. 
Takeout Effect - Win.  To get some idea of how playing high-takeout venues affects your ROI, take a look at Columns E and F.  Do you t hink a couple points in takeout percent makes a difference over the long haul?

Finally, the third table shows the effect of takeout on a Trifecta pool and the bets on the winning combination and how the different takeout levels affect those odds and the $2 Trifecta payoffs.  Takeout Effect - Trifecta.  As in the Win payoff example, Columns E and F give you some idea of what you're surrendering by playing high-takeout venues.

.High takeout equals Horseplayer Robbery.  It's that simple!Still not convinced?  Read this!

HIGH TAKEOUT