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How to Calculate Betting Odds and Payoffs

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Jockey riding thoroughbred race horse
Chuck Eckert/Photographer's Choice RF/Getty Images

Do you know how to read the toteboard? You would be surprised how many people don't understand it at all, even though they are still betting. The most basic information there are the win odds quoted on each horse. Those don't tell you what the horse will pay, but the amount of profit you will get and the amount you have to bet to get it. 6-5 means you will get $6 profit for every $5 wagered. 20-1 means you get $20 profit for every $1 wagered (i.e. bet $2 and get $42 back). Since most tracks have a $2 minimum bet, below is a handy chart look up the payoff for a $2 bet at various odds. Remember, your actual payoff may differ from this chart as the odds on the toteboard are rounded off, so 2-1 odds on the toteboard may actually be 1.9-1 or 2.2-1. Payoffs use the actual odds and are rounded down to the nearest nickle or dime depending on the rules at that track. This rounding is called breakage which can be a complex topic for beginners. Those who want to know more should read this article.

If you want to calculate the exact win odds on a horse, you will need to use a couple of other figures from the toteboard: total win pool and amount bet on that horse. The total pool is all the money bet on all the horses to win, but it is NOT the amount that will actually be paid out to the holders of winning tickets. Before the track pays off the winners they deduct the "take" which is generally between 14%-20% and is different for every state. You can look up the take at your track here. This money goes to pay state and local taxes, purse money for the horsemen, expenses at the track, and the track's profit. To calculate the exact odds on your horse, just subtract the take from the total pool then subtract the amount bet on your horse to give you the amount of cash to be paid out. Divide that figure by the amount bet on your horse to get the exact odds. This figure will always be rounded off to the nearest dime (usually) or nickle as mentioned above before the payoffs are calculated. Again, those who want to know more about breakage and how it affects your payoffs should read this article. Here is a simple example of win odds calculation:

Total pool: $900
Amount bet on horse #1: $300
Take amount: 15%
$900 - 15% = $765
$765 - $300 = $465
$465 / $300 = $1.55

Round this off to $1.50 for breakage and you get odds of 1.5-1 or 3-2 as it would normally be written which yields a payoff of $5.00 on a $2.00 wager.

Pay-offs for $2 win bets:

ODDS PAYS   ODDS PAYS   ODDS PAYS
1-5 $2.40   8-5 $5.20   6-1 $14.00
2-5 $2.80   9-5 $5.60   7-1 $16.00
1-2 $3.00   2-1 $6.00   8-1 $18.00
3-5 $3.20   5-2 $7.00   9-1 $20.00
4-5 $3.60   3-1 $8.00   10-1 $22.00
1-1 $4.00   7-2 $9.00   15-1 $32.00
6-5 $4.40   4-1 $10.00   20-1 $42.00
7-5 $4.80   9-2 $11.00   30-1 $62.00
3-2 $5.00   5-1 $12.00   50-1 $102.00
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