Winston Churchill famously declared, “There is something about the outside of a horse that is good for the inside of a man.” An inspired statement indeed, but put a few horses together for a race and Churchill might have said “There is something about the competition of a horse race that does something to the inside of a man’s wallet.” There is something beautiful about watching horses run, but most folks that are interested in horse racing have a penchant for placing a wager or two.
Of course, not everyone interested in racing gambles, but many do. The stereotype of the degenerate gambler portrayed on TV shows and movies doesn’t hold true when you get to know the majority of those who like to play the races. As long as you stay in your comfort zone and think about betting as the price of admission, wagering on a race can be one of life’s great pleasures. It only takes a few winners to realize what all the fuss is about.
In American racing, all legal wagering is based on the pari-mutuel system. Basically, this means that all money bet on a race minus the takeout (money subtracted from betting pools to pay the racetrack’s bills and fund purse money) is returned to the bettors, or more precisely, to the ones holding winning tickets. The amount returned to the bettor is based on how a race is bet. To use an overly simplified example, if 10 people bet $10 on a race and 9 of them bet on horse A and only one person bets on B, and horse B wins, then the lone bettor would take the entire pool ($100 minus the takeout which averages around 17%). If horse A wins, then the people who bet on horse A would split the bet of the loner who bet on horse B (approximately $11.10 minus the takeout). This same principle works when a race includes ten horses and thousands of bettors. Also keep in mind that this simple example does not factor in the takeout but, in a nutshell, this is how the pari-mutuel system works. Once you understand this example, then you can work to understand the effect of takeouts and how it varies among racing jurisdictions.
The odds that are posted before a race are a calculation of bets that have been taken and how much each horse would pay based on the betting to that point. The odds before a race will update and change for the entire period that bets are taken on the race. The final odds on a horse are usually not known until the race ends, but if you bet within a few minutes of the start of the race, you will get a good idea of the payouts. The reason that the odds change after the race begins is that all bets must be calculated before the winning wager payouts can be determined. That means bets made at the track, bets made from off-track betting facilities, and bets made from online wagering platforms must be pooled together before the correct payouts can be calculated.
Every type of bet you make on a horse race (Win, Place, Show, Exactas, Trifectas, Pick 3s, Daily Doubles, etc.) works on the pari-mutuel system. Understanding betting pools and how they work is one of the challenges when wagering on races. As your skills improve in reading the tote board, you will no doubt use the board to inform how you wager.
Be sure to check the rest of the Introduction to the Concepts of Wagering section to learn more about odds, wager types and how and where to place a wager.