Strategy and Odds in Horse Racing

[Parimutuel Betting]  [Types of Bets]  [Strategies for the 10 cent Superfecta]

 

Parimutuel Betting

Parimutuel betting (from the French language: pari mutuel, mutual betting) is a betting system in which all bets of a particular type are placed together in a pool; taxes and a house "take" or "vig" are removed, and payoff odds are calculated by sharing the pool among all winning bets.

The following is an example adapted from Wikipedia:

Consider a horse race with 8 horses.  Suppose the bets on these horses are as given in the following table.

Horse Amount Wagered
 #1 $30
 #2 $70
 #3 $12
 #4 $55
#5 $110
#6 $47
#7 $150
#8 $40

The total amount wagered is $514.  First, the wagering company or the track host will take a certain percentage from the total wagered.  This is called the "take" or "vig".  For example, suppose the take was 14.25%.  This amounts to $73.25 and therefore the remaining pool of money is $440.76. 

Now suppose horse #4 won the race.  The amount bet on this horse was $55 and therefore the payout (for each dollar bet) will be 440.76/55 = 8 (approximately).

At any given moment (prior to the start of the race) the odds posted on the board are estimates of this final payout.  For example, odds of 8 to 1 translate to a payout of $8 for each $1 bet. 

 

Types of Bets

First, there are the "straight bets":

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