Betting on horse racing
Betting on horse racing or horse betting commonly occurs at many horse races. Gamblers can stake money on the final placement of the horses taking part in a race. Gambling on horses is, however, prohibited at some racetracks; one such is Springdale Race Course, home of the nationally renowned Toronto-Dominion Bank (TD Bank) Carolina Cup and Colonial Cup Steeplechase in Camden, South Carolina, where, because of a law passed in 1951, betting is illegal.
Where gambling is allowed, most tracks offer parimutuel betting where gamblers' money is pooled and shared proportionally among the winners once a deduction has been made from the pool. Parimutuel betting also provides purse money to participants and a considerable amount of tax revenue, with over $100 billion being wagered annually in 53 countries.
In some countries – notably the UK, Ireland, and Australia – an alternative and more popular facility is provided by bookmakers who effectively make a market in odds. This allows the gambler to 'lock in' odds on a horse at a particular time (known as 'taking the price' in the UK).
Types of bets
In North American racing, the three most common ways to bet money are to win, to place, and to show. A bet to win, sometimes called a "straight" bet, means staking money on the horse, and if it comes in first place, the bet is a winner. In a bet to place, you are betting on your horse to finish either first or second. A bet to show wins if the horse finishes first, second or third. Since it is much easier to select a horse to finish first, second, or third than it is to select a horse just for first, the show payoffs will be much lower on average than win payoffs. If there are a small number of horses in the race, show or place bets may not be offered (or if bets have already been made, they are cancelled and the wagered amounts refunded).
In Europe, Australia, and Asia, betting to place is different since the number of "payout places" varies depending on the size of the field that takes part in the race. For example, in a race with seven or less runners in the UK, only the first two finishers would be considered winning bets with most bookmakers. Three places are paid for eight or more runners, whilst a handicap race with 16 runners or more will see the first four places being classed as "placed". (A show bet in the North American sense does not exist in these locations.)
However, one popular form of sports betting in the UK is Tote Betting. While it encompasses several different types of bets, the most popular is a Placepot which works similar to a lottery. As part of the bet, punters select one or more horses for each of the six races taking place and, depending on the number of horses running, must predict whether their horse will finish within the top three or four places. Unlike traditional horse bets, Placepots take into consideration more than just the top two finishers. The bet is so popular, in fact, that a Placepot at the 2015 Cheltenham Festival broke records with a dividend of £91,774.50 to a £1 stake.
The term each-way (E/W) bet is used everywhere but North America, and has a different meaning depending on the location. An each-way bet sees the total bet being split in two, with half being placed on the win, and half on the place. Bettors receive a payout if the horse either wins, and/or is placed based on the place criteria as stated above. The full odds are paid if the horse wins, (plus the place portion), with a quarter or a fifth of the odds (depending on the race-type and the number of runners) if only the place section of the bet is successful. In the UK some bookmakers will pay for the first five (some independent firms have even paid the first six) for a place on the Grand National. This additional concession is offered because of the large number of runners in the race (maximum 40). Occasionally other handicap races with large fields (numbers of runners) receive the same treatment from various bookmakers, especially if they are sponsoring the race.
The rough equivalent of the each-way in North America is the across the board (win/place/show) or win/place bet, where equal bets on a horse are made to win, place, and show (or just win and place). Each portion is treated by the totalizator as a separate bet, so an across-the-board bet is merely a convenience for bettors and parimutuel clerks. For instance, if a $2 across-the-board bet (total outlay of $6) were staked on a horse which finished second, paying $4.20 to place and $3.00 to show, the bettor would receive $7.20 on what is essentially a $6 wager.
In addition to straight wagers, "exotic" wagers offer bettors an opportunity to incorporate the placement of different horses in one or multiple races. The two broad types of exotic wagers are horizontal and vertical. Horizontal exotic wagers are bets on multiple horses in one particular race, while vertical exotic wagers involve predicting results across multiple races. Both have specific options for which bets are available and are detailed below.
In the most basic horizontal wager, an exacta, the bettor selects the first and second place horses in the exact order. Picking the first three finishers in exact order is called a trifecta and a superfecta refers to the specific finishing order of the top four horses.
Boxing is a tactic that increases the odds of winning an exotic wager by removing the need to choose the exact order. A quinella, which boxes an exacta (allowing the first two finishers to come in any order and still win), is the basic box, but boxing can be applied to the trifecta and superfecta as well.
A wheel is a bet on a single horse is to finish in a specific position, with multiple horses finishing ahead and/or behind it. In a sense, a win bet can be thought of as a specific type of wheel bet.
Vertical bets are spread over different races. A daily double is an exotic wager placed on the winner of two consecutive races. Picking the winner of three, four, five or six straight races is referred to as a pick-3, pick-4, pick-5 and pick-6 respectively.
In addition to traditional betting with a bookmaker, punters (bettors) are able to both back and lay money on an online betting exchange. Punters who lay the odds are in effect acting as a bookmaker. The odds of a horse are set by the market conditions of the betting exchange which is dictated to by the activity of the members.
In the United States, the states with the largest pools are California, New York, Kentucky, Florida, Maryland and Illinois in no particular order.
Hong Kong generates the largest horse racing revenue in the world and is home to some of the largest horse betting circles including the Hong Kong Jockey Club founded in 1884. In 2009, Hong Kong generated an average US$12.7 million in gambling turnover per race 6 times larger than its closest rival France at US$2 million while the United States only generated $250,000. Betting on horse racing is ingrained in local culture and is seen as an investment.
During the 2014-2015 racing season the Hong Kong Jockey Club attracted about HK$138.8 million (US$17.86 million) per race more that any other track in the world. The revenue the club generate from various wagers makes it the largest taxpayer for the government. Hong Kong Jockey Club broke its own record during the 2016-2017 season with a turnover of HK$216.5 billion and paid the government HK$21.7 billion in duty and profits tax, an all-time high.
- Parimutuel gambling
- Mathematics of bookmaking
- Zeljko Ranogajec
- Bill Benter
- Alan Woods (gambler)
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