If you understand the basics of horse race betting, you’re probably ready to find out how to win at horse betting. In this guide, you’ll learn how the horse track makes money, and what you can do to gain an edge in horse racing.
How the Track Makes Money on Horse Races
As with the “house edge” in casino gambling, horse racing tracks need to make money to stay in business. In order to determine your payoff, consider this example of how the track makes its money:
Let’s say you and a friend want flip coin. For every heads that comes up, you win $5; for every tails, your friend wins $5. The coin you use is completely fair, and you each have a 50 percent chance of winning on each toss. You’re happily flipping and exchanging money with each other when another friend comes along. Let’s call this friend PM. PM wants in on the action, but doesn’t want to lose any money. PM wants $2 per flip, without making any bets. So every time a heads come up now, your friend loses $5. You’ll get $3 and PM gets $2. For every tails, you lose $5, your friend gets $3, and PM gets another $2.
Because of this setup, PM is going to come out ahead in the long run, regardless of how long you and your friend keep flipping the coin. PM stands for pari-mutuel, and is the betting system a racetrack uses.
Every flip of the coin, you’ll either win $3 or lose $5, but PM always gets $2. Racetracks use a pari-mutuel system to make their money; tracks take a percentage of every dollar wagered on a race before making any payouts. The percentage is usually higher on exotic bets than it is on win, place and show bets, and is always set by the gambling commission of the state where the racetrack is located. The percentage allows the track to pay its operating expenses, provide purses to the owners, and cover any government taxes. The track usually has a take between 15 and 20 percent of all money wagered by the bettors.
How to Get an Edge at Horse Races
Betting on horse races can be murky territory in a pari-mutuel system. The best way to win is to bet judiciously to stay above water when wagering on the ponies.
In fact, betting on horse racing is almost like playing the stock market (talk about gambling!). Winning at horse betting will take a bit of luck and the careful use of the information you have on the horses. You either must have superior evaluation skills or information not available to other bettors.
The most likely way to gain an edge is with the former—evaluating public information—is known as handicapping. To handicap a race, you must closely examine all the information you can, and assign probabilities on a horse’s chances of winning a given race. The official track handicappers do an excellent job of this when setting the morning line odds. But they can only go so far. Once the morning line odds are set, odds shift to public hands, changing based on the wagers made by the bettors.
The best way to get ahead is by looking for horses that are likely to win despite other bettors’ opinions. An “overlay” is the term used to describe a horse with a higher probability to win compared to the implied probability of its win by the posted odds. A horse with a lower chance than the bettors think is known as an “underlay.” You can usually profit by betting against an underlay.
Look for horses with a large overlay or a large and clearly ludicrous underlay to give yourself an edge at the races. Let’s go over the ways to figure out which horses fit into which category.
How to Find an Overlay
The odds set forth by the public bettors are generally a pretty good estimation of how a horse will perform in a race. Your job is to find major mistakes made by the betting crowd for your wagers to be profitable, since the track’s take is so large. Most handicapping systems require a lot of time and effort reviewing daily race statistics. Casual bettors need an easier, more practical route to take.
Finding a bias is the best way to find a large overlay for an occasional fan. The bias is found in the track itself, and gives one horse a greater advantage over its competitors. Bias arises when a horse is more likely to win racing on a specific section of the track. Bias is separated into two categories: a slow rail and a fast rail. A slow rail means horses racing away from the inside rail have the advantage; a fast rail is the opposite, giving the advantage to horses running nearer to the rail.
The weather is the biggest factor in the condition of the rail. Wet tracks can change the bias as they dry, and as more races are run throughout the day. The bias will usually stay the same if the moisture level in the track remains constant from race to race. A dry track caught in a rain shower changes the bias just like a drying track that started the day wet. You may notice a strong bias in the first couple of races. If you do, watch a few more to check whether the bias shifts. Stick to betting the last few races, when you can be a little more certain about the bias, or just watch the races today and try again tomorrow.
A Fast Rail
A fast rail gives an advantage to the inside horses. Any track can, and some tracks always, have a fast rail. You can tell there’s a fast rail if most of the horses with an inside post position win the races. A fast rail usually gives inside horses an early lead, even if the track newspaper says other horses often have early speed. Horses will appear to run more strongly on the inside rail during the race than those in an outer position. If a horse near the rail takes an early lead, it can usually hold on to it all the way to the finish.
If you notice a fast rail is present, you should either bet on an inside horse or hang on to your money. A quick glance at the Daily Racing Form can give you some insight, too. If an inside horse isn’t listed as having early speed, or it’s just not the better-looking horse, don’t bet on the race.
On the other hand, you might consider making an exacta or quinella bet if the two best horses have the two inside posts.
A Slow Rail
A slow rail gives the advantage to the outside horses instead of the inside ones. An outside horse sprinting to the front of the pack, or the field bunching together during the race, is an indication there’s a slow rail on the track. The field will bunch if the lead jockey moves his or her horse to the inside rail (because the distance around the track is shorter), causing the horse to slow down and making it difficult for other racers to pass by. If the outside track allows more speed than the inside, it’s easy for a horse to catch up to the inside post, even if the inside horse doesn’t lose speed.
Favorites seldom win when the rail is slow. The leader at the top of the stretch can rarely pull through to win, unless it’s running far from the rail. Most races are with a slow rail are won by long shots, and half or more by the outside third of the participants.
Bet on the outside horse if the odds are 2 to 1 or higher. If the odds aren’t that good, wait for another race, or even another day.
Capitalizing on a Situation That’s Too Good to Be True
To bet against the underlay—the horses with more money wagered on it than it truly deserves—you’re on the lookout for the horse that’s too good to be true. It’s not exceedingly difficult to figure out whether the horse is truly too good to be true; you can determine its status with minimal analysis. If the horse really is too good to be true, don’t make a bet. On the flip side, if it’s not too good to be true, bet on all that horse’s opponents. Pay special attention for any opponents that are likely to win at higher odds, because those are the bets you really want!
The easiest place to find too-good-to-be-true horses worth betting against is in a claiming race. The cheaper the claimer, the better for you! Here’s an example: You’re checking out a $3000 claiming race, and a horse is entered that’s had good performance in the past. She’s even beaten some $30,000 horses. It doesn’t seem like she belongs in a race with $3000 claimers. Would her owner be willing to sell her for $3000 if she could still win against $30,000 horses? It’s not likely, but bettors wagered on her like she could still beat out a $30,000 opponent and would surely dash her way to first against lower $3000 horses. Her odds finished at 3 to 5, and she only came in third.
The bettors thought of her as the $30,000 horse she started, rather than the $3000 claimer she’d turned into over time. Cheap claimers shouldn’t bet down to 3 to 5. If you happen to find one that gets that low, it’s a good bet that horse is too good to be true! Spread your bets on the opponents of any too-good-to-be-true horse you find. That way, whichever horses wins, you can still walk away with a healthy chunk of winnings!
Hunting for Treasure Among Horses
Races with a purse near or equal to the claiming race are the best places to find too-good-to-be-true horses. Check the official program to find races with cheap claimers and approximately equal purses. Once you do, keep your eye on the tote board to see if any horse is being bet down, meaning the odds drop below even money. If you see a horse’s odds drop to 4 to 5 or lower, take a look at the Daily Racing Form and find out if the bettors have the wrong idea, thinking the horse is the best bet on the field. The following information can help:
- Purse and claiming price for the last few races
- Finishing order
How fast the horse actually runs influences how fast people think it can run, which in turn determines the value of the horse. Losing a race can lower a horse’s value, just like winning can raise it. A horse can be too good to be true if it wins a claiming race, but reappears later at the same claiming price and purse. Under normal circumstances, it would’ve moved higher after winning. It may also get bet down if it won its last race by wide margin against the same quality of horse it’s up against today. Older horses aren’t likely to be claimed at any price, because it may not have too many races left in it. Watch out for this, because if an older horse is bet down, it may just mean it’s of better stock than its opponents, but it’s not going to be purchased because of its age. When this happens, that horse is definitely not too good to be true.
Don’t bet too early on a horse you think is too good to be true! It’s possible the horse may not get bet down enough, but even worse, it may be scratched, or removed, from the race. Betting down doesn’t mean a horse will be scratched, but it might be at such a low claiming price because of infirmity or age. It may have a limp, and the track vet will have to kick it out of the race. The value of bets will be greatly reduced if the horse you thought was too good to be true is scratched.