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The Beginners Guide for Betting Horse Racing

Betting on horse racing, now more convenient than ever due to the advent of, is often viewed as complicated and too complex for a relative newcomer to understand. In reality, while there are number of ways in which to play an individual race, the basic wagers that have been the sport’s backbone for decades are fairly simple and an easy introduction to the “Sport of Kings.”

Straight Wagers

The basic or “straight” wagers newcomers generally become familiar with upon their first exposure to horse racing are Win, Place, and Show. Historically, all three required a minimum bet of $2, but these days they can be had for a minimum of $1 in most places. Here’s a closer look at the three wagers.

WIN: This wager, as its name implies, requires that your selection finish first. The takeout rate on a Win bet (as well as Place and Show wagers), that is the amount of money the track removes from each pool to cover expenses, is generally 15-20% depending on the track. The remainder is then distributed to those that hold Win tickets on the first-place horse. (The Win pool is separate from the Place and Show pools.)

Unlike Place and Show bets, Win odds are freely available by viewing the tote board, TV monitors, or on your screen if using an internet device. They are often calculated with the horse’s odds.

In this example, with seven minutes to post, the #6 horse is the favorite at 8-5, or 1.6-1. If the horse wins, you would earn $1.60 for every $1 wagered, plus earn your stake back. The payoff for a $2 Win bet would thus be $5.20.

On the other end of the spectrum, if the #4 horse wins at 29-1, the payoff would be a minimum of $60 and as much as $61.80, depending on breakage. Breakage is a device tracks use to compute payoffs so they can be rounded to the nearest, lowest 20-cent increment (10 cents in New York) rather than paying in exact amounts (e.g. a calculated $60.94 payoff would instead pay $60.80).

As Win odds are determined by the level of play each horse receives, it’s hard to quantify the level of difficulty of this wager, though it’s harder than either Place or Show wagers as we will see. If you strictly bet the favorite to win every race, you would, on average, cash on one out of every three races. That average goes down the more higher-priced horses you bet to Win, although the rewards are higher.

PLACE: The Place bet requires your selection to finish first or second. It’s easier to cash than a Win bet, but the payoffs are typically smaller due to the Place pool being divided two ways rather than one (bettors with Place money on the first horse and second horse divide the pool).

Place odds and likely payoffs are not readily available to the public because they are dependent on who runs first and second. Though there are ways of determining approximate payoffs by calculating the amount of money bet on each horse in the Place pool, newcomers to the game are advised to enjoy the experience and not get too hung up on the mathematics. That’s what the track’s mutuels department is for.

SHOW: The easiest of the three straight wagers to cash, it requires that your selection finish first, second, or third. Because it’s the easiest, and the fact the pool is divided among three groups of ticket holders, the payoffs can be very low. If you’re betting favorites, the Return on Investment (ROI) can often be less than $1 for every $2 wagered. As is the case with Place bets, odds and likely payoffs are not readily available but an approximate return can be computed.

While Show bets are good ones for beginners with a low-risk threshold, winning the equivalent (sometimes) of pocket change will not be terribly exciting for some.

A race has been run and the payoffs have been posted. How much have we won? Based on the above graphic:

$2 Win on #1$7.40
$2 Win on #4$0
$2 Win on #3$0
$2 Place on #1$4.00
$2 Place on #4$12.80
$2 Place on #3$0
$2 Show on #1$2.80
$2 Show on #4$9.20
$2 Show on #3$6.20

Any straight bets made on horses besides these three are losing ones.

Newcomers are often interested in putting $2 to Win, Place, and Show (“across the board”) on their horse for a potentially greater return. In the above example, that $6 investment on #1 would have returned $14.20, on #4 $22, and on #3 $6.20. And, yes, you could lose money betting across the board if your horse finishes second or third and the cumulative payoffs are less than $6.

Exotic Wagers

All non-straight wagers are referred to as “exotic” bets and are typically difficult for a newcomer to horse racing to win unless they have astounding beginner’s luck. The easiest of the so-called exotics to cash on are the EXACTA (pick the first two finishers in one race in exact order) or QUINELLA (pick the first two finishers in one race in either order, though this bet is not widely available), and the DOUBLE (picking the winner of two consecutive races).

The best way to attack either the Exacta or Double would be to wheel a number of horses in multiple combinations for the lowest stated minimum, typically $1. For example, a $1 Exacta wheel of horses 1 and 2 in first place over horses 3, 4, and 5 in second place would cost $6 ($1 for each combination). Likewise, a $1 Double wheel of horses 1 and 2 in Race 1 with horses 1 and 2 in Race 2 would cost $4.

One popular betting technique newcomers to horse racing often embrace, individually or in a group, is the SHOW PARLAY. Say a group of four friends decides to invest $10 each in a Show Parlay and then collectively choose which horse to put $40 to Show on. If the horse finishes in the top three and pays $4 to Show, the group now has $80 to invest in the next race’s Show pool. They will keep re-betting their winnings until they are unsuccessful (where the most each individual loses is their initial $10 investment) or voluntarily choose to stop, preferably the latter after the original $40 has ballooned to several hundred dollars.

There is certainly luck involved in this technique, but it’s a good way for the risk-averse to get their feet wet in horse race betting without risking a vast sum. It’s also a way to make the low-risk, low-reward Show wager a lot more interesting and, if successful, can generate a lot of excitement during your first horse racing experience.

Learn more with our free Beginners Guide to Betting Horse Racing PDF Download.

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