#TheAction: Understanding Odds, Part I

10.18.2016

Basic Action: Reading the odds for horses in any given race can be a daunting task, at first. But learning what the odds represent — and how much money a horse will pay if it wins — is actually pretty simple. 

When you look at the odds board for any race, you’ll see the program numbers of all of the horses running in the race (like No. 1 for the 1 horse, No. 2 for the 2 horse, and so on) and another number immediately to the right of the program number. That second number is the horse’s win odds. If that number is “4”, then the win odds of the horse are 4-1. 

Advanced Action: Once you’ve figured out what the win odds are for every horse, you can determine how much (roughly) each horse could pay if it wins. Using the above example of 4-1, the horse will pay at least $4 to every $1 bet on it.

To figure out what a 4-1 horse would pay if you bet $5 on it, you would multiply 4 (the win odds) X $5 (wager amount) = $20, and then add $5 (wager amount/your initial investment, which you get back) for a total of $25 returned.

If you’re wondering what determines each horse’s win odds, it’s all dependent on how much money the general public is betting on each horse. Each wager type, including win, place and show, is defined by a pool in which all the money being bet on each horse goes. The more money bet into the pool on a certain horse, the lower the horse’s odds (and the lower the return). 

At the end of the race, the pool pays out to all those with winning tickets; if the horse is heavily bet, and the horse wins, there are more winning tickets to pay out, and hence a smaller share of the pool is divided up by the many winners. On the other hand, if there is very little money bet on a horse, it’s odds (and potential payout) will be much higher; the fewer winning tickets in the pool, the larger each winner’s share of the divided pool.

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