Types of Horse Bets
If you go to the race track or to any race book, the range of betting propositions available to you will fall into two main categories: straight bets and exotics. A straight bet is that a given horse will win or place or show in a given race. Exotics are combination bets, either concerning more than one horse in a given race, or maybe even linking bets on the outcomes of several races. They have their own unique vocabulary, but are fairly straightforward conceptually. A third kind of bet offered in race books is the futures bet, usually some proposition about a big race coming up in several weeks.
Types of Horse Bets
Betting comes in a couple of different flavors. The traditional, and still the preeminent bet, is the "straight bet" to win, or place or show. These bets are usually cited as if they were in a $2 denomination. So if someone says that a horse paid $52, it means that a $2 bet "to win" paid back $52 (including the return of the original $2) if the horse finished in first place. A bet "to place" means that it will be "a winning ticket" if the horse finishes either first or second. A bet "to show" means that the bettor wins if the horse comes in first, second or third. A horse that finishes in the top three is said to be "in the money."
Suppose that your handicapping homework disclosed that the 6th race at Pimlico (for example) features this speed horse (let's call him "Death and Taxes" - the name for the closest thing a horse can be to a sure thing). Death and Taxes has little competition in the race, and the distance is 6 furlongs, short enough that he surely will not tire. This may be a candidate for a "prime" or maximum bet. This is a straight bet designed to maximize income to the bankroll because the chance of having a winning ticket is good.
Unfortunately, if handicapping the race is too easy, the horse may not be overlaid enough in the pari-mutuel pool to provide value for a prime bet. It may just be an "action" bet, or worse, Death and Taxes may be underlaid, so that any straight bet would be foolish. In this case, while the chances of holding a winning ticket remain high, the payoff will be so low as wipe out any edge advantage you may have had.
Death and Taxes might be a candidate to enter into the planning of an exotic bet instead.
Prime bets are really the result of clever handicapping, where the analyst is reliably more informed or more clever than the rest of the wagerers. It is the non-obvious angle that creates overlays. Of course this is hard to achieve as a newcomer. It may be that no prime bets appear in a given day at the book. It is not shameful to make minimum bets in the face of less than complete conviction about a race. In fact, there is no obligation to bet at all. Remember, betting without information on your edge makes you an ignorant and emotional player in the same way as when you knowingly bet with a negative edge.
On the other hand, there is no shame in betting favorites in straight bets, assuming that the handicapping confirms the wisdom of doing so. Be aware that the public can favor a horse for many different reasons, some of them silly. The public's love for a particular horse may just be the name (like "Death and Taxes"), the silks worn by the jockey, or on account of some track tout's rumor. In such cases, betting against the favorite may be a smarter wager. Throughout the wagering experience, the constant objective is to bet only when the pari-mutuel pool will pay you for winning at a greater rate than the risk taken to place the bet. Surely a few bets will be lost, but at the end of the day, or the year, the net will be positive, unless your handicapping was poor.
The tot board in the infield of a track will provide updated information on the pari-mutuel pool. The simulcast will also echo this information. The tot board data include, for each horse in a race, how much has been wagered to win, to place and to show, and the number of $2 bets (or equivalent). The track odds are also provided, and they are simply the result of a calculation based on all the betting so far. By now it should be obvious that the less money bet on a horse, the less likely the public thinks this horse will perform well. "Dead on the Board" means that a negative opinion has emerged in the betting, further discouraging anyone else from making more bets. If the reason for the public's distrust of the horse is incorrect, there may nevertheless be value in a long shot. Handicappers understand that when the herd mentality or mob psychology is working against a horse, there may be a good value bet in there.
Whether the money is placed to win, place or show is itself a decision that also must be based on what the tot board says about the track odds. For example, when the track odds are strongly against a specific horse, the "show" bet might make the most sense. The payoff will not be as great as a win, but still it will have value, and there will be a payoff for being "almost right." Another example is if a favorite is severely underlaid (over bet). In such a situation, a second horse may be a contender, justifying a bet "to place" and paying out more for the money risked.
Whether it makes sense to restrict the bet "to win" or to be less demanding and go for either first or second ("to place") or even for third place ("to show"), depends a great deal on the shape or contour of the race and the chance that one of the contenders might under- or over-perform the expectation.
In any event, straight bets are the bread and butter of the horse player. Strategically clever straight bets can pay several times over and repair any damage to the bankroll caused by handicapping goofs in previous races. When betting in exotics, do not forget to place straight bets (when warranted), since the odds of winning are usually much more favorable in straight bets, even though the payoffs may also be smaller.
Combination bets, called "exotic bets," usually pay very high odds when they "hit." For this reason, the treatment of exotics requires mentioning the Internal Revenue Service. The IRS requires that tracks send a W-2R form to anyone winning a pari-mutuel bet where the winning odds are 300 to 1 or greater. This is called a "signer" as the bettor needs to fill out and sign an IRS form at the time of cashing in the ticket. (The IRS taxes gambling winnings as ordinary income, but permits the deduction of gambling losses against them, so the losing tickets do have a potential tax value.) One other detail: regardless of the odds, if the track has to give a winner more than $5,000 in winnings, a withholding is made at the time of payment, so that the winner has to wait to see that money (if ever) until the tax refund check arrives. (Race books in casinos do not follow the same 300 to 1 rule, as the wagers are not pari-mutuel, but other withholding and reporting practices may be in effect.) The $5,000 rule does apply to all casino winnings.
When you make a straight bet, the payoff odds are very seldom as high as 300 to 1. Twenty-five to one is considered an uncommonly good result on a straight bet.
On the other hand, exotics do reach the kind of odds that might interest the IRS. For a relatively low amount of a bet, the possible rewards can be very large (with a correspondingly low percentage that the bet will win). The common advice of the professionals with regard to exotic bets is to do the homework, the handicapping, and then make straight bets accordingly. Only on occasion should a person with a limited bankroll try for a "home run" with an exotic bet.
The decision to make an exotic bet should be based on the expected shape of the race or races and the way the participants promise to interact. The decision has nothing to do with anything exogenous to the races themselves (like your desperate need for a big score.)
It is also recommended that you always put down a straight bet on favored horses, even if they are also being bet in the exotic, as the chance of winning an exotic is always more remote. Another piece of advice with exotics is not to "bet chalk," as the rewards are seriously curtailed, but the risk is still higher than straight bets. (Recall that "betting chalk" is putting money on the favorites, referring to the fact that the betting action on favorites always caused a lot of erasures and re-writes on the chalk board on the old-fashioned infield tot board.)
Exotics are combination bets. They can be described as vertical (more than one horse in a given race) or horizontal (more than one race). As in sports betting, there are parlays, in which the outcome of bet 1 is rolled into bet 2, and so on. Other combination bets include daily doubles, exactas, trifectas, superfectas, pick 3, pick 4 and even higher picks. The takeout on each of these may be a little different. Also, tracks sometimes offer better value (lower takeout) in some of the exotics than in others. The calculations on exotics can become quite complicated. Many types simply were impossible to imagine before the era of computers
Vertical Bets ("Multi-Horse, Same Race")
The standard vertical bets are the exacta (two finishers in order), trifecta (three finishers in order) and superfecta (four finishers in order). Individual tracks may have different names for these bets and perhaps some other variations, but these are the "hard core" of vertical or "multiple-horse" bets.
A quinella is an exacta, but without the restriction of order. The bet is essentially on two horses "to place," and the ticket wins no matter whether one or the other came in first. Not all tracks offer quinellas.
The "exacta box" is a multiple bet in which all combinations of horses and out-comes are covered. For example, one could bet an exacta with three horses, covering outcomes AB, BA, AC, CA, BC, CB. The minimum bet denomination is usually $1 per combination, and the number of combinations is six (three horses times two spots). So this exacta box would cost $6. If any two of these three horses finishes in order of first and second, the ticket wins. The amount of the payoff is also related to track odds, so again, betting the obvious may not result in much value. If two horses are equally likely to win, so that the order is a tossup, the quinella may be a bet with a better financial prospect, as it will be cheaper to buy, but the outcome will be covered just as well. If, however, one of the horses is a long shot, the exacta payoff "to win" will be a lot higher than the quinella payoff "to place" involving the same animal.
Trifectas and superfectas work the same way, but may not be useful betting arrangements for the person who is new to handicapping. One possible exception, however, is the concept of "keying" a horse. Going back to the example of "Death and Taxes" (under "Straight Bets"), it was assumed that this horse outclassed the rest of the field and was a heavy favorite, justifiably so. If everyone else agreed with this assessment, there would be very little money in the pari-mutuel pool on other horses. One way to bet on "Death and Taxes" without facing an underlay would be to include him in an exacta box or a trifecta. In the case of the exacta, you would bet the combinations as before, but on the assumption that Death and Taxes would always be in the first spot. Thus the combinations would be AB, AC. Instead of six combinations, there are only 2, and the ticket costs $2. A trifecta, with the winning horse keyed, has six possible combinations: all with Death and Taxes to win, and three other horses fighting for two other money wins (three times two). The un-keyed trifecta box costs $24 (four times three times two). Even though the keyed horse is underlaid, causing the payoff to be less than it would be for a longer shot, the cost of the ticket is cut by a factor of 4, so the margin or edge is greatly improved.
As an opening proposition, the person with the $100 bankroll should not make complex, exotic wagers often. The unkeyed trifecta costs 12 times the $2 minimum bet and represents almost 25% of the whole bankroll. This is not recommended. A nice, modest, promising, keyed trifecta at $6 is close to the limit of prudence, except possibly in the face of some enormous opportunity, when $12 might be the ceiling (12% of the bankroll!).
Horizontal Bets (Multiple Races)
Exotic betting opportunities also involve betting in more than one race, and linking the bets together. The two-race link is the daily double. Pick 3, Pick 4, and Pick 6 are other common options. (Pick 5 is often available, and "place pick all" is an option exclusively at California tracks.) The multiple picks are the same structure as the daily double, with just more races included. Tracks may designate which races can be included in the multiple race bets, so the selection of races is not always up to the free choice of the horse player. Like the multiple horse bets, the multiple race bets become geometrically more expensive as additional races are included, and they quickly blow the top off the maximum bet rule of the player with a modest bankroll.
The essence of the bet is to pick the winner of two or more races. To understand the betting strategy of the multiple race ticket, think of a parlay. This wager risks the winnings from the first bet on the second. If the first bet is lost, the whole operation is over. The payoffs on a parlay reflect the additional risk of making the second bet contingent on winning the first one. Yet most people bet safely on the first race in the parlay. An example would be money on the clear (and reliable) favorite. Then the second bet can be a little more risky. The "place" and "show" options are not available in a structured parlay, nor are they available in the other multiple race bets.
The daily double is different from the parlay, in that it will pay more generously if the first race involves a bet against a favorite. The estimated payoff for the double is displayed on the screens, so the value of the ticket can be compared to its cost. In the case of the parlay, just the first race odds are visible at the time the bet is made.
The cost of a double with two horses at $2 per combination will be $8. If both races have a couple of strong contenders, then betting two horses to win the same race is not foolish. A race can be "keyed" for a horse as well. The same daily double ticket, but with just one horse in the first race, costs $6. It is possible to add horses to the betting in each race. For example, the same daily double ticket, but with three picks per race, would be $12 (three horses in two races gives 6 possible combinations, times $2 per combination).
It is possible to add races to the ticket. Instead of two races, it could be three. In such a case, two horses per race would yield a ticket costing $16 (two horses in each of three races yields eight combinations, times $2 per combination). A $1 ticket would be $8, and more within the minimum betting rules of the disciplined player with a $100 bankroll.
Combinations and keying of horses can be altered in accordance with the handicapping. If one race has a clear favorite, but another is iffy with up to four possibilities, and the third with two, then the ticket would have one horse, then 4, then 2. That is 8 possible combinations, or $8 at the level of $1 per combination. This improves the value of the ticket by reducing its cost without reducing its prospects (assuming accurate handicapping).
These combinations are called "part wheels." They can be thought of as incomplete "boxes." Instead of creating a "box" or matrix of horses and races (multiple races) or horses and finishes (multiple horses), a wagerer can "take a stand" on a specific horse and reduce the cost of the bet.
One example is a five-horse trifecta. The cost of a $1 box of five horses to win, place and show is $60 (the number of combinations are five times four times three, as the same horse can not both win and place or show). Suppose that three of the horses have little or no chance of winning. The number of combinations drops from 60 to 32 (keying each of two horses, plus the four remaining horses in the two finishing positions, give 2 times 4 times 4 or 32).
If this part wheel does not sacrifice a perceptible probability, then the reduction in cost of almost 50% makes the bet that much more valuable.
Another example is the pick 3. Picking three horses in each of three races is $27 at the $1 level (three times three times three). If the first race does not really have three contenders, perhaps a pick of only two horses in the first and second races can be made without materially affecting the "true odds" - the real expectation of the outcome. In such a case the price of the ticket drops substantially, as there are only 12 possible outcome combinations (two times two times three), and the ticket is more than half the price.
An unusual form of constructing a part wheel would be to bet on all the horses in one race and on only one or two in the others. Suppose that the first two races had clear favorites, but the third race was totally up for grabs. Perhaps there's a big gap in the handicapping for the third race. There are 8 horses in race three. By creating a part wheel of one horse in each of the first two races and all horses in the third race, the pick 3 ticket has 8 possible combinations and costs just $8 at the $1 level. (At the betting window this is understood to mean using "the all button" on race three.)
Whether one "boxes" the horses or uses a part-wheel is a decision based on the handicapping, and whether you can rule out certain of the combinations with confidence. The part wheels save money only when some candidates can be discarded without compromising your expectation of the outcome.
In the Vegas sports book you can make a “future bet.” The common example is placing a bet on the Super Bowl months before the game takes place. This same approach is possible in the race book with certain events. For instance, it is November, and a horse that has just run in the Breeders Cup Juvenile championship (the class race for two-year-olds) has impressed everyone. He shows promise as a possible Derby winner (for three-year-olds) in the following May. The race book may have a “line” on this colt’s prospects to win the derby. This is called a future bet.
Many experienced handicappers call these sucker bets. Since handicapping is mostly about races rather than an individual horse, and since any futures proposition is invariably linked to a race in which the field is unknown at the time, horse players leave futures for the squares, the people who knowingly risk money against a negative edge or bet without concern as to whether they have an edge at all.
In the example provided, it is not only true that betting on the likely winner of the Kentucky Derby requires knowing who will run it, but there is no guarantee that this horse will even be in the race at all, let alone win it. Most horses who run the Breeder Cup Juvenile championship do not even go to the Derby, and since the race has been running (1984) no BCJ champion has ever won. Maybe this will be the year. Who knows? A small bet on this colt might be fun for sentimental reasons, but there's no rational justification for taking the bet.
Placing a Bet and Hanging on to the Ticket
The way a bet is placed at the track is similar to the process at a race book, except there's no need to specify the track, obviously. Courtesy requires being prepared and betting quickly, particularly if there's a line. Everyone is trying to meet a deadline. The bettor hands the clerk the money and announces the bet -- usually loudly because of the racket all around: race [number], amount of bet, type of bet [win, place, show], horse number [from the program or updates]. The ticket will be handed back. Experts always caution the bettor to look the ticket over at the window, as it can not be "corrected" later. If there was a mistake (and this can easily happen due to haste and background noise), the clerk will void the ticket and issue a new one.
The payouts on the ticket will be displayed on the board in the infield and on screens around the track. It's simple, unless you lose your ticket. Then you had better hope the ticket was no good anyway. No ticket, no payout. It is not a good idea to throw away bad tickets. For one thing, it is always possible that there was a disqualification, or a scratch, or some other event that might cause the outcome of the race to be revised. If the stewards (the three judges who determine if the race was fairly and properly run) disqualify a horse that was in the money, perhaps the losing ticket will have some value as the other horses move up one position. If the horse on the ticket scratches or is declared a non-starter, the wager is returned to the ticket holder. Even the rare dead heat for first can alter how a ticket pays (win and place bets collect on either horse). Even totally dead tickets are useful for tax purposes.
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