Horse Racing Betting Odds

Odds are an approximation of how much a horse will pay to win a race. You will notice that as wagering on a race progresses closer to post time, the odds will change. Why is that you ask? The monies that are wagered in a race are counted up and put into Pools. What is a Pool? A Pool is where the total amount of money that is wagered on a specific type of bet is held to be redistributed to patrons that have correctly selected the outcome of the specific wager they have placed. Out of these pools certain percentages are subtracted. Why is that you ask? The reason being, a percentage of all money wagered go to governments, racetracks, and Horseman.

The Government receives a percentage (for tax purposes) for allowing conduct racing in a certain jurisdiction. The Race Tracks receive a percentage for promotions, maintaining the racetrack, and paying employees. The horsemen receive a percentage that makes the Race Tracks able to offer purse money to the owners and trainers for racing horses. If there were no money, there would be no races. After the percentages are removed, the remaining money is paid out. This is where we get our payoffs for winning tickets.

The odds are usually of the form x/y (e.g. 5/1, 9/5). Dividing x by y gives a ratio to 1. The smallest ratio or the largest amount of money on a number represents the favorite.

Winning odds of 2/1 will pay $6.00 for a $2 bet, while 5/1 will pay $12.00 for a $2 bet.

Payout is calculated by (odds ratio to 1) x bet amount + bet amount.

e.g. For odds of 5/1, the approximate payout for a $2 bet is 5 x $2 = $10 + $2 = $12.

Some tracks allow different minimum amounts on each bet type. Throughout the USA, $1 bets tends to be the minimum on most bets, while in Jamaica $4 is the minimum on all bets.

The odds are computed based on the sales on the bet less a government and handling tax. These deductions vary and are usually controlled by a regulatory body. Deductions may vary at the same track if there are simulcast races.

In addition some tracks tax payouts in excess of a specified limit. Throughout the USA this limit is 600/1.