Understanding Horse Racing Odds
by Trevor Whenham
Betting on horse racing can be very intimidating to people that don't understand how it all works and what all the numbers mean, but once you learn the basics of understanding horse racing odds it really couldn't be simpler. If anything, it may even be easier than other forms of sports betting to understand because of the transparency - you know exactly how much is being bet on each horse at any time, so you can easily spot trends and opportunities.
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The first thing you need to know is how to read the prices. Horse racing odds are presented in two different ways at the track depending on where you look. The first way is as simple odds - 6/1, for example. Just as in other sports, that means that you would make a profit of six dollars for every dollar bet. People often get confused and that think that the total payout would be six dollars, but you get your initial bet back as well. You also need to remember that the minimum bet at any track is two dollars, so your profit will be at least twice the listed odds. When the odds are presented in this way they are rounded down, so your actual profit will usually be higher than the posted odds - 6/1 may actually pay out $6.30 in profit for every dollar instead of just six dollars.
The other way that odds will be presented is as the payout on a $2 bet. These are the odds that are listed on the big tote board in the middle of the track as well as in other places depending upon the track. If the listed price is $14.20 then that means that you will make that much on a $2 bet if your horse wins. Obviously, you can multiply that by any amount to figure out the payout if you bet a different amount - a $20 win bet would pay $142.00, for example. It's important to remember here that the listed prices aren't profit, but that they also include the two dollars you have bet. If you are more comfortable with straight odds then converting the posted prices is simple. It takes just three steps to get the approximate odds - drop the cents, subtract two dollars and divide by two. $14.20 = (14-2)/2 = 6/1. The prices on the tote board will change for the last time soon after the race starts to reflect the last second bets, and that final price is the payout you are guaranteed if your horse wins.
People who aren't familiar with the tote board will often look for where the payouts are listed for place and show bets. They are very difficult to find because, well, they aren't there. It's impossible to determine what the place and show prices will be until you know what three horses end up in the money. The place and show prices will be lower if the favorites all end up coming in, and higher if the longshots have a good race. With experience you will get pretty good at anticipating approximate payouts before the race, and very accurate at predicting them after the race is over but before the results are posted, but there is no way to know for sure what the prices are before they are posted.
The single biggest key to horse racing odds are that they are determined by what is called a pari-mutuel system, which is just a fancy French term for mutual betting. That means that the odds are determined by the bettors. When you look at a program you will see odds listed for every horse, but those are just the morning line odds that have been set by the track handicapper. Though they are usually fairly accurate they are just a guide and they ultimately have no impact on the final odds on a horse. Instead, the odds are set by the amount of money that is bet on each horse relative to how much is bet on each other horse. The more money the public bets on a horse, the lower the odds will be.
Because the odds are determined in this way, they will change throughout the betting period before the race. In many cases the odds will change a lot. It is not uncommon to see a horse that ends up as a longshot start off as the favorite if someone makes a large bet on him to win right when betting opens. Conversely, a favorite can look like a real bargain at the start of betting - he may be 30/1 20 minutes before the race, but end up at 2/1 by post time. The biggest thing to remember, and the biggest mistake novice bettors make, is that your payout will not be whatever the odds are when you make your bet. It will be whatever the odds are when the race starts. Every time I go to the track I inevitably hear novice bettors express frustration that the horse they thought was 20/1 ends up at 3/1. This is different than sports betting where the odds are locked in when you make your bet. Because of that it is important to not only look at where the odds are at the time, but to get an idea of where they are likely to end up at post time.