Q: Please explain to me how horse racing odds are figured. I’ve always wondered.
— Danny Coulthard, North Tazewell, Va
A: Danny, it’s not as mysterious as it seems. Basically, the odds are set by the bettors themselves. The track is in business to make money, and it covers its bases by ensuring that equal amounts are bet on all horses, so the more money bet on a horse, the lower its odds, and hence, the lower the payout. The odds for an individual horse are determined by taking the total amount of money bet on all horses in that race and figuring what percentage has been bet on the horse in question, minus a portion for the track’s take. Here’s a scenario that may explain it more clearly: $1,100 has been bet on all horses in a given race, and of that total, $375 has been bet on Horse A to win. Let’s say that the track takes 15 percent as its cut, so $1,100 multiplied by .85 equals $935. Subtract the $375 bet on Horse A, leaving $560. Then, divide the total remaining pool by the amount bet on Horse A, $560 divided by $375, giving you $1.49. That’s rounded up to $1.50, so Horse A’s odds to win are set at 1.5:1. Of course, at the beginning the day, no money has been wagered, so the initial odds are set by a handicapper who provides a baseline for the day’s odds.
— Nathan Rush, Editor
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