A wager on a horse race is very different than many other forms of gambling. Horse racing payoffs are calculated on a Pari-mutuel basis. Basically this means that the house (the racetrack) does not care who wins a given race. The odds on each horse to win are determined by what proportion of the total money wagered is placed on that horse.
The “favorite“, or the horse with the most money wagered on him to win by the public, will have the lowest odds.
The “longshots” have the least amount of money wagered on them and therefore have the highest odds.
Delaware ParkThe racetrack handles the money, keeps a percentage, and calculates the horses’ odds based on the public’s preferences. The remaining money is then paid back to the players who hold winning tickets. To the racetrack, the result of a given race is usually insignificant. To the wagering public, however, it means everything!
Understanding the odds and payoffs can be intimidating, but it’s actually quite simple. Win odds on the tote board are displayed based on $1.00 unless otherwise noted. A “3” displayed next to a horse’s number indicates that the horse is 3-1. An example of an exception to this general rule is when “5/2” is shown. This simply means that the odds on this horse are actually 5 divided by 2, or 2.5-1.
Win payoffs are calculated based on a $2.00 wager because at most tracks this is the minimum bet. A horse that wins at 3-1 will return $3.00 for every $1.00 wagered. For example, a $2.00 wager on a horse at 3-1 would return approximately $8.00:
$2.00 x 3 = $6.00 + the $2 wagered = $8.00
Generally, when calculating a horse’s win price, multiply 2 times the horse’s odds and add $2.00.
Notice that some odds pay through a range. Our horse with odds of 3-1 could pay anywhere from $8.00 to $8.80 in 20 cent increments. This occurs because the tote board can only display rounded odds. In reality, a horse listed at 3-1 on the tote board could be anywhere from exactly 3.0-1 to 3.4-1.