Horse Racing Betting Basics

When going to the track, it is important to understand the different options available for placing wagers. In horse racing, there are three general ways that a punter can place a bet. 

Different Betting Options

Fixed Odds Betting

This type of betting is the standard for many sports, not just horse racing. It involves placing wagers with a bookmaker at set odds. This means that once you place your bet with the bookmaker, the odds at the time of wagering will remain the same.

If you win, your stake will be multiplied by those odds. With fixed-odds wagering, the player will put money on one horse to win the race. If the horse is able to finish first, then the player wins their bet. If the horse finishes in any other place, the bet is lost. 

Fixed odds betting is the most popular form of betting on horses, if you choose correctly the bookmaker will pay you, if not, you will lose your stake. There is one difference concerning fixed odds in horse racing. That is the possibility of taking the 'starting price’, or SP.

These are the odds that are calculated on each horse right as it begins the race. Once the starting price has been calculated, it will remain the same. It can be either higher or lower than the previous odds for that horse. The player will not know the odds of the starting price until the race actually begins.

Although this sounds like making a gamble on gambling and therefore is probably not advised, there are a couple reasons why punters would take the starting price over the current prices. The first reason would be availability, like if for some reason the player will not be at the track in time and by taking the default avoids a shortening of a particular market.

Another reason to take the SP is if the player believes that a bet will not drift any further but knows that the odds should be listed higher. In this case, they would take the SP for the chance of getting the odds they believe should be available. Recently, a promotion called Best Odds Guaranteed has been becoming popular at racetracks as more bookmakers are beginning to offer it.

What this means for the bettor is that if you take the current odds given on the winning horse, and the starting price was higher than the odds given to you the bookmaker will instead pay out your winnings using the starting price rather than the odds you took.  

Parimutuel Betting

Pari-mutuel is almost specific to horse and dog greyhound races, but can be used in other sports as well including golf. It is well-known form of betting at the track that translates “to wager amongst ourselves”.

Instead of dealing with a bookmaker and fixed odds, the player will instead wager against other attendees. The rules to win a pari-mutuel bet are the same as a fixed-odds bet. If the horse you wager on wins the race, then you will also win your wager and get money back.

However, the payout is a complete mystery, and could actually be less than you originally wagered. How it works is all of the money wagered on the horses will be pooled together. The money collected will be divided amongst the winners. Here is where your payout can drastically change.

If one of the horses was a clear favorite and 95% of the attendees bet on that horse including you, that can spell trouble. Trouble as in likely feeling as though you have lost the bet despite the fact that technically you have won it. This is due to the 95% of people who bet on the same horse that are all winners, and the payout will be coming from 5% of bettors.

A small amount divided amongst a massive group means that you could end up winning literal pennies on your dollar. It would not be a big surprise for a player to return ten cents or less on a $2 bet. 

However, if you are wagering on the horse that only five percent bet on, you would instead be looking at a massive payout. The pari-mutuel system can be used for other types of horse racing bets as well including exactas and trifectas.

If a player wagered money on a trifecta in the pool, then their payout would of course be substantially higher. The portions for different bet types will be different. The odds for the pari-mutuel will be recalculated every time a new bet is made.

It is important to understand when you are making a bet you are taking “probable odds”, meaning that they are subject to change. This is because the amount of money being pooled in is constantly changing. 

The company in charge will also take a percentage of all of the money wagered. This is usually from 10-30%, depending on the company or racetrack. At certain racetracks, the only option for betting is pari-mutuel, so make sure to check the rules before planning on a certain form of wagering.

Exchange Betting

The last type of wagering on horse racing takes place in the form of exchange betting. This can be used for any sport, but works especially well for horse racing. Like the Pari-mutuel, this takes the sportsbook completely out of the picture.

Exchange betting got fairly popular with the launch of online exchange sites, especially Betfair, which remains the most popular exchange site in the word today.

Also like the pari-mutuel, you will be betting directly against other bettors. Using exchange betting, you will end up agreeing to odds with another bettor and then separately deciding on your stakes. First you will choose a bet, set the odds and then wait for someone to take your bet. 

Basically, there are two ways to make an exchange bet. You will either back a selection or lay a selection. If you are backing a selection, it means you are betting on that horse to win the race.

Basically, there are two ways to make an exchange bet. You will either back a selection or lay a selection. If you are backing a selection, it means you are betting on that horse to win the race. However, if you lay a selection, then you are simply betting on that horse not to win the race.

The latter is obviously a much safer bet, however the payout stands to be much less. The bettors who lay selections are effectively taking the role of the bookmaker. Once you lay a bet, the expected payout you would receive if successful is immediately deducted from your account, as is the stake from the player backing a selection.

This type of bet also gives the player a new option to choose from when making an exchange bet. When the player is debating laying or backing a certain selection they can either accept the proposal with the current odds or propose a new wager with different odds. The player here is in more control of what happens with their wager.  

Types of Horse Racing Bets

There are also some different markets available that you can bet on when at the racetrack. These range from straightforward, general bets to bets that are specific to horse racing.

It is always important to understand the bets you are making so as to not end up with a losing ticket that not only dampens your spirits but also confuses you.

Or worse, a bet you would have won if you knew more about it. A terrible feeling to be sure. Therefore, to help bettors on their first trip to the racetrack, we have compiled the most important types of horse racing bets necessary to know. 

The terms may be different depending on the country, so the terms listed here will only pertain to horse racing in The United States. 

Straight Bets

Win - This is the most straightforward and popular type of bet. Simply choose a horse, and if the horse is the first past the post you win; if the horse finishes in any other place you will lose your stake. This would be the same as the Moneyline in other sports. 

Place - A wager on a horse to finish in one of the top two positions, if the horse finishes in any other position it will be a loss. This bet is only available in races with five or more horses competing.

Show - This takes the first two and predictably adds a third place finish. Here you are betting on a horse to finish in the top three positions, in order for a show bet to be available, there must be at least eight horses running.

Across the Board - This versatile bet is a combination of the first three straight bets. It is a wager that includes the win, place and show finishes all in one bet. You will pay for all three when you make a bet. So, a $2 bet will cost $6.

All of the bets will be on the same horse. If the horse wins the race the player will win all three bets, if it finishes second you will win the place and the win, if third you will win the show. As expected, if it finishes outside the top three then the player will lose the entire stake.

Exotic Bets

The wagers here are more complicated and the payouts can be huge. Some of them may seem impossible to win, but take comfort in the fact that they have all been done before. These bets can be very exciting and can turn a couple of dollars into thousands. Make sure to know what you are looking for before arriving at the track. 

Here is a list of the different markets that we will be going over:

  • Exacta 
  • Quinella
  • Trifecta
  • Superfecta
  • Daily Double
  • Pick 3/ Pick 4/ Pick 6
  • Prop Bets
  • Matchups
  • Lay Wagers

Exacta - An Exacta is a bet on which two horses will finish in the top two spots. The player will need to get both horses correct as well as the place they will finish. That means you need to correctly predict which horse will finish first and which will finish second.

The standard cost for an exacta bet is $2, though you can bet more if you believe it to be necessary. It is also possible to make multiple exacta bets with different horses.  

Quinella - This bet is a little easier to predict than the Exacta. Here you will still pick which two horses will finish first and second but it is not necessary to predict the exact order. The payouts here are smaller than the Exacta because it is easier to win.

Trifecta - One of the more difficult bets to make here. The Trifecta challenges the player to correctly choose the top three finishers. To win this bet you need to predict which three horses will finish in the top three spots and in what order. Naturally, payouts for this are quite high.  

Superfecta - Why not take it one step further? Here is the grand-daddy of horse racing bets. For this bet to win the player must predict the top four finishers all in the correct order. This is not a bet for the faint of heart. If you do win a Superfecta though, you will be rewarded with a massive payout.

Daily Double - Although this rules originally dictated that this bet must be made on the first two races only, the rules have since been changed. Now, to win all the player has to do is correctly guess the first-place finisher in two consecutive races. The writing makes it sound like a simple wager, and in some cases it may be. However, it can be hard for many bettors to correctly predict even one race so it is certainly not the easiest in this list.  

Pick 3/ Pick 4/ Pick 6 - This takes the Daily Double bet and gives a few different options to extend the number of races, if the player is feeling lucky of course. The rules are the same however you will have to correctly predict three, four or six consecutive races in order to win. The standard bet is usually two dollars. 

Prop Bets - This is any bet that is not directly involved with the outcome of the race. Some examples include: Which jockey will win the most races at a competition, which trainer will have the most successful season, etc. Prop bets are available for almost any sport you bet on, so it is a good idea to get familiar with them.  

Matchups - The only bet here that is likely to consistently win, besides lay bets. Matchup bets can also be profitable in the long run. The player simply must pick which horse out of two will finish ahead of the other. The horse does not need to win the race, rather it just needs to finish ahead of its competitor. 

Lay Wagers -  The player here will take their chances betting against a horse to win a race. If the horse that the player lays finishes in any position outside of the top spot, then the bet will be successful. This type of bet can be done through a betting exchange. Quite obviously, this bet is much easier to win than purely betting on one horse to win.