Via the DRF:
The business world generally agrees that the last option for a struggling industry should be raising prices. But the California racing industry is contemplating just that option in legislation that would boost the takeout on exotic and superexotic wagers by 2 or 3 points.
Economists who have studied takeout increases have contended that raises lead to depressed handle, at least when takeout rises above a certain rate. Most significantly, economists say, an increase in takeout reduces the amount of churn, or money available to bettors to wager back into pools, because payoffs are reduced.
more at link.