Understanding Win Odds and Payoffs
Wagering on a horse race is very different to other forms of gambling. Horse racing payoffs are calculated using track odds.
What are Track Odds?
The odds on each horse to win are determined by the proportion of the total money wagered placed on that horse at the track. (The money we accept on a given horse does not enter the track pool and will therefore not influence the odds on a horse; we simply use the final track odds to settle bets).
The ‘favorite’, or the horse with the most money wagered on him to win by the public at the track, will have the lowest odds (for example: 3-1, 1-2).
The ‘long shots’ have the least amount of money wagered on them and therefore have the highest odds (for example: 15-1, 25-1).
The racetrack handles the money and calculates the horses' odds based on the public's preferences. This means that the track does not really care who wins a given race. To the wagering public, however, the result means everything!
$2 Standard Minimum Bet
Win, Place and Show payoffs are calculated based on a $2.00 wager because at most tracks this is the standard 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
Pay Ranges
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.
| Odds | PAY Range | Odds | PAY Range | Odds | PAY Range |
| 1-5 | $2.40 or $2.50 | 8-5 | $5.20 or $5.40 | 6-1 | $14.00-$15.80 |
| 2-5 | $2.80 | 9-5 | $5.60 or $5.80 | 7-1 | $16.00-$17.80 |
| 1-2 | $3.00 | 2-1 | $6.00-$6.80 | 8-1 | $18.00-$19.80 |
| 3-5 | $3.20 or $3.40 | 5-2 | $7.00-$7.80 | 9-1 | $20.00-$21.80 |
| 4-5 | $3.60 or $3.80 | 3-1 | $8.00-$8.80 | 10-1 | $22.00-$23.80 |
| 1-1 | $4.00 or $4.20 | 7-2 | $9.00-$9.80 | 15-1 | $32.00-$33.80 |
| 6-5 | $4.40 or $4.60 | 4-1 | $10.00-$10.80 | 30-1 | $62.00-$63.80 |
| 7-5 | $4.80 | 9-2 | $11.00-$11.80 | 50-1 | $102.00-$103.80 |
| 3-2 | $5.00 | 5-1 | $12.00-$13.80 | 99-1 | $200.00-$201.80 |
Understanding Payoffs
Below is a sample race result with Win, Place, Show, Exacta and Trifecta payoffs. In our example result the #3 horse won, the #7 was second, and the #8 was third.
| Finish Order | $2 Win | $2 Place | $2 Show |
| 1st - #3 | $10.00 | $7.40 | $5.20 |
| 2nd - #7 | $5.40 | $4.20 | |
| 3rd - #8 | $3.80 |
$2 Exacta #3, #7 $54.40
$2 Trifecta #3, #7, #8 $106.20
A $2 place wager on #7 would return $5.40 because the #7 did in fact finish either first or second (in this case he finished second). A $2 show wager on #3 would return $5.20, his show payoff. Remember that even though #3 won the race, if you have a show ticket on this horse you will only receive the show payoff.
As you can see, the win wager is the most risky because your horse has to win a given race. The show wager is the least risky because your horse can finish first, second, or third and you will still receive a payoff. The payoff on any given horse will nearly always be highest for win. With risk comes reward.
The winning exacta selection paid considerably more than the win, place, or show prices because it is much more difficult to hit. In a race with 10 horses there are 90 possible exacta combinations. In the same race there are 720 possible trifecta combinations.
