# Horse Racing Betting Odds and Payout Calculator

Many horse racing tracks have a station where spectators can place wagers on the outcome of the race. Horse race betting is a form of parimutuel gambling, where the gamblers' money is pooled and distributed proportionally among the winners, after the track takes its cut from the pool. Typically, the track takes a cut of 10%-15% from the pool. The track's toteboard gives real-time updates of how much money is currently bet on each outcome. Some horse racing gambling terms and procedures are explained below the calculator.

### Toteboard Odds and Payout Calculator

 Track's Take = % Breakage:    None    Nickel (5¢)    Dime (10¢) Horse Bet (Pool) Odds Payout on a \$2.00 Bet 1 \$ \$ 2 \$ \$ 3 \$ \$ 4 \$ \$ 5 \$ \$ 6 \$ \$ 7 \$ \$ 8 \$ \$ 9 \$ \$ 10 \$ \$ 11 \$ \$ 12 \$ \$ PoolTotal \$ * An asterisk means the odds are actually less than 0.2, but the track pays out a minimum of \$2.40 per \$2.00 win wager (winning bet).

### How Parimutuel Horse Racing Betting Works

Suppose there is a race among three horses and \$100 is bet on Horse A winning, \$300 is bet on Horse B winning, and \$500 is bet on Horse C winning. The total pool is \$900.

Now suppose the track's takeout is 15%. This means the total pool of wagers is actually (\$900)(0.85) = \$765. To determine the odds for each outcome, subtract the amount wagered on an outcome from the total pool, then divided by the amount wagered. Using the numbers in this example we have:

Horse A odds: (765-100)/100 = 6.65
Horse B odds: (765-300)/300 = 1.55
Horse C odds: (765-500)/500 = 0.53

These odds do not represent the probability of a particular horse winning, but the payout ratio for a win wager. For instance, if you bet \$1 on Horse B and he wins, then you will make a profit of (\$1)(1.55) = \$1.55 from that wager. When you cash in your ticket, you will receive \$2.55. (\$1.55 plus the original \$1 you bet.)

Some Considerations: Because new players are constantly coming up to the counter to make their bets, the odds on the toteboard are constantly changing. Also, most tracks require a minimum \$2 bid. Another thing to keep in mind is that it is possible for the odds to be less than 0.2, but most tracks will payout a minimum of 0.2 on the dollar. This means if you make a win wager of \$2, your payout will always be least \$2.40. (\$0.40 plus the \$2 you originally bet.)

### Breakage

Tracks to do not give you the exact odds; they round down to either the nearest 0.05 or 0.1 (nickel or dime). This is called the breakage. Most tracks use a dime breakage system.

If you look at the example above, we gave exact odds. However, if we round them all down to the nearest tenth, we get instead:

Horse A odds: 6.6
Horse B odds: 1.5
Horse C odds: 0.5

This means that a \$1 win wager on Horse B only pays \$2.50, not \$2.55.

The effects of breakage are unpredictable since the toteboard is always changing. For every dollar bet, dime breakage takes off at most 9 cents. Nickel breakage takes off at most 4 cents per dollar bet.

### Another Way to Display Odds

Instead of showing the odds as decimals such as 1.5 and 0.5, the track may show them as ratios, such as 3 to 2 and 1 to 2. The table below shows the payout per \$2 bet on an outcome with a given odds ratio.

 Odds Payout on \$2 Odds Payout on \$2 1-5 \$2.40 3-1 \$8.00 2-5 \$2.80 7-2 \$9.00 1-2 \$3.00 4-1 \$10.00 3-5 \$3.20 9-2 \$11.00 4-5 \$3.60 5-1 \$12.00 1-1 \$4.00 6-1 \$14.00 6-5 \$4.40 7-1 \$16.00 7-5 \$4.80 8-1 \$18.00 3-2 \$5.00 9-1 \$20.00 8-5 \$5.20 10-1 \$22.00 9-5 \$5.60 15-1 \$32.00 2-1 \$6.00 20-1 \$42.00 5-2 \$7.00 30-1 \$62.00