by Jeff Parsons

Created on: July 23, 2010   Last Updated: July 25, 2010

Horse racing has been a popular sport ever since the days of ancient Rome chariot races, and, maybe even before that, for there’s nothing like the exhilarating rush of an all-or-nothing competition literally occurring at breakneck speed. Spectators can get a vicarious taste of this excitement by placing bets on their champion. If their horse wins or loses, so do they – it becomes very personal.

The many methods of betting were established long ago, but, essentially, the basic rules still applies: the racetrack always wins. To provide this amazing spectacle, the racetrack has to stay in business, which means that they have to pay for general overhead, expenses, fees and profit. This necessity is specifically accounted for in every race so that the remaining funds can be used to provide a payout for those betters who chose the winning horse.

The betting odds for each horse are displayed on the racetrack’s huge lighted tote board. The odds are given as a ratio of X to 1, or, the amount of money you’d get back for every dollar you bet. So, for example, your $2 bet on the winning horse at 3:1 odds would give you a $2 x 3 = $6 payout. The numbers can fluctuate wildly just before the race starts, with last minute betters lowering the odds for favorite horses, much to the dismay of the grumbling crowd.  

How do they come up with the odds so quickly? A computer provides an ongoing tally by using the amount of placed bets for each horse to make various calculations. The final odds are set when the tickets sales are stopped just before the race starts. The money spent on the non-winning horses are used to cover the money paid for the winning horse, of course, minus the racetrack’s take. Racetracks need to recoup their expenses before each race, so, to be successful, they could claim anywhere from 10% to 25% of the pooled money. For example, if the racetrack crowd bet $1000 total on all of the horses in the race, the racetrack would take their cut from the total, say 20%, thereby leaving $800 available for payouts. If the crowd bet $200 on your winning horse, then $800 - $200 = $600 would be available for payout for your horse’s win, so, the odds for your horse would be $600/ $200 = 3:1, or, 3 to 1. The odds reflect the confidence of the racetrack betters on how well certain horses will do in the race.

There’s another type of racetrack odds. They are calculated by professional horse racing advisors and published in various racing newspapers and syndicated columns. Essentially, they’ll tell you their best guess on what horse will win. They look at the history of the horse’s racing, the jockey’s riding, the track conditions and the competition. For example, a horse may like running on a slightly rainy track, on a cool day, for a full furlong race, against horses of its age and sex, and with a certain jockey on board. If these conditions are met, the horse will probably do well in the race. The advisor’s odds don’t tell you how much money you could win, but they do provide an informed opinion about what horse should win the race.

Either way, your choice for a winning bet can be based upon the general crowd consensus (the track odds), the opinion of one or more learned advisors, or, going with your own instincts. The racetrack’s odds will tell you how much you’re going to win – have fun! 

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