Understanding Horse Racing Odds and Payouts

The Difference in Payout: 40/1 Horse vs. 9/2 Horse

When it comes to horse racing, understanding the odds and potential payouts is essential. The below example may be used to get a better idea for how a $50 bet to win on a 40/1 horse would differ in payout compared to betting on a 9/2 horse.

40/1 Horse

If you place a $50 bet on a horse with odds of 40/1 to win, it means that if the horse wins the race, you will receive a payout of $2,050. This calculation is derived from multiplying your bet amount ($50) by the odds ratio (40) and then adding your original bet amount ($50) to the result.

Here's the breakdown:

Payout = Bet Amount x (Odds Ratio + 1) + Bet Amount

= $50 x (40 + 1) + $50

= $50 x 41 + $50

= $2,050 + $50

= $2,100

9/2 Horse

On the other hand, if you bet $50 on a horse with odds of 9/2 (favored to win), the potential payout would be $275. The calculation is similar:

Payout = Bet Amount x (Odds Ratio + 1) + Bet Amount

= $50 x (9/2 + 1) + $50

= $50 x (4.5 + 1) + $50

= $50 x 5.5 + $50

= $275 + $50

= $325

Exacta Bet: Pros and Cons

Now, if you are one for parlays or extending your odds beyond a straight bet to win, below is an example of a $25 exacta bet involving the two horses (favorite to win, 9/2, and the long shot, 40/1). An exacta bet requires you to predict the first and second-place horses in the correct order. Here are the pros and cons of doing an exotic exacta bet versus a straight bet to win:

Pros of Exotic Exacta Bet

1. Higher Payout Potential: Exotic bets like the exacta often offer larger payouts compared to straight bets to win. This is because predicting the exact order of multiple horses is more challenging.

2. Excitement and Variety: Exotic bets add an extra level of excitement to horse racing, as you have the opportunity to predict multiple outcomes and potentially win BIG when your projected horses finish 1st & 2nd.

Cons of Exotic Exacta Bet

1. Higher Difficulty: Exotic bets, including exactas, are more difficult to win compared to straight bets to win. Predicting the exact order of two or more horses requires a greater level of accuracy, knowledge and a little bit of LUCK!

2. Increased Risk: With exotic bets, there is a higher risk of losing your bet. If you don't accurately predict the first and second-place horses in the correct order, you won't receive any payout.

Ultimately, whether you choose to place a straight bet to win or an exotic exacta bet depends on your risk tolerance and the level of excitement you are looking to experience throughout the duration and conclusion of the race.

Straight bets offer a simpler and more straightforward approach, while exotic bets like exactas provide the opportunity for larger payouts but come with increased difficulty and risk.

Deep Dive Example

Let's say your risk tolerance is high or has increased after a recent betting win and you want to dabble with an exotic bet - such as an Exacta. In addition, you would like to see the horse with 40/1 odds win the race while also including the race favorite (9/2) as part of your bet. You would have the ability to place an Exacta bet with the 40/1 horse identified as Horse 1 (winner) and the 9/2 horse identified as Horse 2 (to place).

To calculate the payout of an Exacta bet such as the one above, you multiply the amount wagered by the odds of each horse:

40/1 horse and 9/2 horse

Let's assume you place a $10 exacta bet, selecting the 40/1 horse to win and the 9/2 horse to place (finish 2nd).

The approximate calculation for such a bet would be: (bet amount) x (win odds) x (place odds + 1)

$10 Exacta = ($10) x (40) x (4.5 + 1) = $2200