What are Mandatory Payout Transfers and Why Are They Valuable?

So you’ve probably heard horse players buzz every time a racecourse announces the mandatory payout of a jackpot transfer. You may be wondering, what is all this excitement about?

Well, the excitement is justified. Mandatory jackpot transfer payouts represent some of the best theoretical betting value in horse racing.

What is a mandatory payout?

Before we can define mandatory payouts, we need to summarize the definition of a jackpot transfer.

A jackpot transfer is generated by jackpot style bets, which pay out their transfers only on days when a single winning ticket is sold. If you create a unique winning ticket, congratulations! You win the entire jackpot. But if multiple winning tickets are sold, consolation prizes are paid out and some of the day’s fresh money is added to the jackpot.

A mandatory payout occurs when a racetrack hosting a jackpot-style bet decides to end the jackpot supply for just one day and enforce a transfer payout. This usually happens on the last day of a match, but mandatory payouts can also take place during a match or on big match days.

Let’s give an example. Suppose Gulfstream Park has a $560,000 Pick 6 jackpot scheduled for a mandatory payout. On the day of the mandatory payout, this $560,000 jackpot will be paid in addition to the day’s fresh bet money – no unique winning ticket is required. All winning bettors will split the total pool equally. If no winning tickets are sold, players who select the highest number of winners will split the pool.

Non-jackpot bets may also include mandatory payouts. In these cases, there may not even be a transfer up for grabs – the mandatory payout simply means that the day’s betting pool (plus any transfers) is spread regardless of whether someone lands a winning ticket. If no one collects a perfect ticket, the closest bettors share the pool.

Why are mandatory payouts valuable?

There are two reasons why mandatory payouts are so attractive to gamblers. For starters, they tend to attract large pools (often totaling millions of dollars), and large pools have the potential to generate much higher payouts than small pools. After all, a Pick 6 pool with $2,000 can’t pay out more than $2,000, even if you have a lone winning ticket stacked with 99-1 longshots.

Second, the addition of the jackpot to the daily pool serves to offset the effects of withdrawal, which is the amount taken from the betting pool to pay taxes and fund racing activities. Suppose there is a $200,000 Super High 5 jackpot scheduled for mandatory spread, which attracts $1 million in new bets. If Super High 5’s takeout rate is 20%, only $800,000 of the $1 million remains to be distributed to winning bettors. But once the $200,000 jackpot is added, the pool is back at $1 million and the takedown is essentially eliminated.

So the next time you hear about the mandatory jackpot transfer payout, join the excitement! It’s a great opportunity to play for an excellent wagering value.

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