Source This
A players guide to source market fees

Before we can understand source  market fees, we need to understand takeout. When you place a bet a portion of that bet is set aside or taken out. This amount is supposed to pay for the purses, the track, the state and anyone else who maintains the bettor owes them something.
Now this is not a totally outrageous notion. The owner of the winning horse is owed something and to a lesser extent the second and third horses. It costs something to manipulate the track surface so the player doesn't know whether to bet speed or stamina, so the guy on the tractor should get something. You need someone who can't pronounce the word "length" to call the races and he's got to get at least $50. All of this adds up and it's paid for from the takeout.

So you go to the track, walk up to the window and buy a $2 ticket and the takeout is removed. If  the takeout is 17% then your $2 bet has just turned into a $1.66 ($2 - .34) bet. But that's OK because you're paying for everything.  Let's assume that's fair. (It's not, but let's assume it is so we can move on to source market fees.)

Local horseman feel they are owed a percentage  of your action even when you're betting somewhere else. They feel they are owed this even when they have no connection to the activity. It's a type of extortion.
So lets take a look at how this works:  In August, Colonial Downs was running in Virginia. Whenever someone bet on Colonial Downs, the Virginia horseman got part of the takeout. Fine.  That's good as they are running the horses, they deserve  to make money.

It's now October and Colonial Downs is closed, but people still live in Virginia and some of them like to make bets. OK.  So today, October 14th, someone in Virginia wants to turn on their computer and play Santa Anita. This activity has nothing to do with the Virginia horseman. I checked and not even a single Virginia-bred was entered in Santa Anita for that day.  What percentage should the Virginia horsemen get when a Virginia resident places a bet that the Virginia horsemen have absolutely no connection with?
  1.)  Zero
  2.)  1% or less
  3.)  2% or less
  4.)  3 to 3.5%
  5.)  4%
The correct answer is #1. They are entitled to zero. Zip. Nada.

But, lets say you're a very generous person, the kind who gives his spare change to bums on the street (probably down-and-out horseplayers); maybe you could go with #2. Now if you were part of Mao's Red Guard and you were high on crack and it wasn't your money anyway, then #3.   Clearly #4 is unacceptable and #5 is a joke. The correct answer is and will always be #1. They are entitled to zip.

But, this is what the slothful socialists demanded:

These guys demanded 11% of your money for doing nothing. They want it because you happen to have your Internet connection from a certain circuit.  Right about now, some of you are saying, "OK they ripped me off for 17%--what do I care how it's divided?"

You should care BECAUSE it's your money!  You should be getting it back in the form of rebates or free downloads; free past performances or even a cheap 3-piece ashtray set.

If I haven't made myself clear, source market fees are theft.

The next time someone says source market fees are needed for the poor horsemen, point out that if these guys trained horses to run double- digit Beyers, maybe they wouldn't be so poor.  Point out that it's short fields and non-competitive racing that dilutes the handle and leaves less-than-enough takeout for everyone.  And, point out that when horsemen have no stake in the outcome (as in the example I've used) they don't deserve any income from the event.

Richard Young
October 16, 2007