If you are new to horse racing, placing a bet can seem like a daunting task. There is a lot to learn when you are first discovering the sport.

All questions are good ones when it comes to betting, and America’s Best Racing has answers below to five of the most commonly asked questions as it pertains to wagering on horse racing.

Odds change in pari-mutuel betting. (Eclipse Sportswire)

1.) How does betting work? Racetracks and online betting on horse races use pari-mutuel wagering, a form of wagering in which all of the money bet is divided up among those who have winning tickets after taxes, takeout, and other deductions are made. The takeout pays for race purses, track operations, and other expenses, and it can be significant. It generally varies from 12% to 25% for specific bet types.

So in pari-mutuel wagering, you bet your opinion against the opinions of others into the same pool of money, which is then divided up among the winning tickets.

People interested in placing a bet have two primary options: visit the racetrack (local tracks allow people to wager on other tracks as well) or bet online via what is called an advance-deposit-wagering platform. Online horse racing betting sites are like online sports betting platforms – you deposit money online that you can then use to bet on a game or, in this case, a horse race. It’s safe to make a deposit and has gotten much easier in recent years. Most of betting sites offer incentives to those opening new accounts. It might take a day or two to get everything up and running with the initial deposit, so don’t wait until the last minute.

Once everything is set up, the betting part is mostly straightforward. Select the racetrack you want to bet and pick the race number that you want to bet (e.g. Saratoga Race Course, Race 1 for the first race on June 7, Belmont Stakes Day). Then, select the type of bet you would like to place (more on that at the bottom), the amount of the bet, and the horse(s) you would like to wager on.

2.) How are odds determined? As explained above, Thoroughbred racing in North America uses pari-mutuel betting, so the win odds are determined by how much money is bet on each horse. The more money the public bets on a horse, the lower the odds drop. Likewise, horses with less money bet on them have higher odds and thus larger payouts.

The horse with the most money bet on it to win is called the favorite.

An easy way to look at the odds and determine what the payout would be for a win bet is to multiply the odds by the amount of the bet, and then add back the initial bet. For example, if you bet $2 to win on a horse at 10-1 odds, you would win 2x10 or $20, plus the initial $2 wager for a total of $22. If you bet $5 or a horse who was 5-1 odds, you would win $30 or 5x5, plus the $5 wagered. Keep in mind, the odds can change after you place your bet. Sometimes, most of the money bet on a horse race comes in the last few minutes before it starts. The odds can shift significantly in the final minute or two before the horses leave the gate.

3.) What does “scratch” mean? When someone says a horse was scratched or will be scratched, it simply means the horse will be withdrawn from a race before it starts. Horses can be scratched for any number of reasons. Trainers will often scratch horses due to adverse track conditions or a horse’s health. A racetrack veterinarian also can scratch a horse at any time because racehorse and jockey safety is paramount.

4.) How do you read a racing program? There is so much information in so little space in the program (or past performances) for a race. Contained within one small rectangle of real estate is a horse’s breeder, owner, trainer, and jockey (called connections); the horse’s pedigree (father/mother), earnings, and race record; and detailed race-by-race information from past starts … and we really are just scratching the surface. It can be intimidating. Below is a quick and helpful video that should provide a basic guide for how to read a racing program.

5.) What are the different types of bets? There are many different types of bets in horse racing. You can keep it really simple or get creative. For many people, the allure of horse racing is the opportunity to bet a little to win a lot. Of course, those types of bets are more challenging to win. Below is a quick overview of the basic bets in horse racing:

Across the board bet at Saratoga. (Eclipse Sportswire)

Win bet – A bet on a horse to finish first.

Place bet – A bet on a horse to finish first or second.

Show bet – A bet on a horse to finish in the money; third or better.

Across the board – A bet on a horse to win, place, and show. If the horse wins, the bettor collects three ways; if second, two ways (place, show); and if third, one way, losing the win and place bets. It's actually three bets.

Exotic (bet) – Any bet other than win, place, or show that requires multiple combinations. Examples of exotic wagers are double, exacta, trifecta, Pick 4, Pick 6.

Double (or Daily Double) – Type of bet calling for the selection of winners of two consecutive races.

Exacta – A wager in which the first two finishers in a race, in exact order of finish, must be picked.

Box – A betting term denoting a combination bet whereby all possible numeric combinations are covered for certain horses.

Trifecta – A bet in which the first three finishers must be selected in exact order.

Superfecta – A bet in which the first four finishers must be selected in exact order.

Pick (3,4,5, or 6) – A type of multi-race bet in which the winners of all the included races must be selected. Pick 3, Pick 4, Pick 5, Pick 6 are commonly used by tracks in the United States.

Note: It’s more difficult to pick the winner of six straight races than it is to pick the winner of three straight races, so Pick 6 payouts typically are much higher than Pick 3 payouts. Likewise, it’s tougher to predict the top four finishers in a race than the top two, so superfecta payouts are higher than exacta payouts.