How To Bet On Horse Racing: Kentucky Derby Gambling Guide

The Kentucky Derby is the best betting race in America with 20 contenders generating boxcar payouts year after year. If you've never bet on a horse race but want to know all the different ways you can go for the gold, follow along with this handy how-to guide.

So, you watch this Kentucky Derby thing once a year, and it looks interesting and all. You are also known to place a bet once and a while, maybe when you're down in Vegas on a trip with the boys, girlfriend or wife. You're not averse to gambling, but you've never bet on a horse race in your life and the only thing you know is "Win, Place, Show".

You want to bet on the Kentucky Derby, or any other horse race? Below is everything you need to know but was afraid to ask.

First things first, it's entirely legal to wager on horse racing through the internet in the United States; you don't have to be at the track, OTB or Vegas. I know, I know, there's that internet gaming act passed a decade or so ago that rained on the parade. Horse racing is an exception to that law and is a completely legal method of on-line gambling in this country. What's the catch? The state you live in must permit such wagering to take place, and not all do. Most states do allow on-line wagering on horses (called ADW - Advance Deposit Wagering) which can be done through a variety of companies - TwinSpires.com, TVG.com, Express Bet.com, and DRFBets, are just a few of the U.S.-based companies that are licensed to provide ADW services. If your state permits you to bet through an ADW, you are free to bet the ponies from the comfort of your own home on your computer or mobile device.

How do you know if your state allows you to bet through an ADW? Simply go to one of the licensed ADWs and try and sign-up; if you live in a state where it's illegal (like Hawai'I or Georgia), you won't be able to create an account. if you can...well, it's time to fund the account and get down to the business of playing the horses. If you can't ... well, call a friend who lives in a state that can.

Betting Terminology

Okay, with that little bit out of the way, let's take a look at the betting lingo and the types of wagers one can make on an equine athlete. Below is the smorgasbord of wagering opportunities offered by Churchill Downs on Derby Day:

WIN: A bet on a horse to win (if you don't know this you probably shouldn't be betting)
PLACE: A bet on a horse to finish either 1st or 2nd.
SHOW: A bet on a horse to finish either 1st, 2nd or 3rd.

Those are the standard bets that everybody is familiar with. They are simple, straight forward, it's easy to calculate the cost, and they are easy to make. Where things start to become more complicated is with what are known as the exotic bets. Below are the exotic wagers offered by Churchill Downs this weekend:

EXACTA: A bet picking the 1st and 2nd place finishers in a race.
TRIFECTA: A bet picking the 1st, 2nd and 3rd place finishers in a race.
SUPERFECTA: A bet picking the 1st, 2nd, 3rd, and 4th place finishers in a race.
DAILY DOUBLE: A bet picking the winners of two races, usually two consecutive races.
PICK 3: A bet picking the winners of three consecutive races.
PICK 4: A bet picking the winners of four consecutive races.
PICK 5: A bet picking the winners of five consecutive races.
PICK 6: A bet picking the winners of six consecutive races.

The Odds - How Much Will You Win

Wagering on horses is done via pari-mutuel wagering, a system of wagering where each player is betting against other players, not the house. The track takes a percentage of the total pool (usually 15 to 20%) and the rest of the money is paid out to all players that hold the winning tickets. The odds represent what percentage of the total pool each horse is receiving. The total generally adds up to more than 100% because it includes the track take. Below is an odds-percentage conversion chart for typical odds in horse racing.

Odds

Win %

Odds

Win %

1/10

90.91%

4/1

20.00%

1/5

83.33%

9/2

18.19%

2/5

71.42%

5/1

16.67%

1/2

66.67%

6/1

14.29%

3/5

62.50%

7/1

12.50%

4/5

55.56%

8/1

11.11%

Even

50.00%

9/1

10.00%

6/5

45.45%

10/1

9.09%

7/5

41.67%

11/1

8.33%

3/2

40.00%

12/1

7.69%

8/5

38.46%

15/1

6.25%

9/5

35.71%

20/1

4.76%

2/1

33.33%

25/1

3.85%

5/2

28.57%

30/1

3.23%

3/1

25.00%

50/1

1.96%

7/2

22.22%

99/1

1.00%

To figure you how much you'll get paid if you hit your win bet, simply divide the numerator of the odds by the denominator, multiply that number by the amount bet, and then add the amount bet.

A $2 win bet on a horse at 4/1 odds:
4 x 2 + 2 = $10

A $10 win bet on a horse at 7/2 odds:
3.5 x 10 + 10: $45

Place and Show payouts are more difficult to calculate since tracks don't display the odds on those bets. Usually, they pay less than half what the winning odds play (unless the horse is a huge longshot and the favorite doesn't finish in the top three).

Figuring out the payouts on exotics are a mixed bag; tracks display the "Will Pays" for exactas and daily doubles, but you won't have a clue as to what your trifecta, superfecta, Pick 3, etc., will pay until the sequence is over. Generally speaking, trifectas and superfectas will return larger amounts, but be careful, playing all the favorites in a trifecta is likely going to return a small amount especially when compared to how much your bet cost. If you spend $120 on a superfecta box that includes a bunch of low priced horses, you're going to be very disappointed if it hits. The key to hitting larger scores is to find some longer priced horses to play along with shorter priced ones.

How Much Will It Cost? - Bet Calculation

Okay, so we've got all of these exotic bets where you're trying to pick the order of finish or the winners in multiple races. Many first time bettors think that to play a exacta (or tri or any other exotic) requires you to use just two (or three or four) horses in your play. You can select as many horses as you want but the more horses you select, the more expensive your ticket becomes. The first step in determining what a specific bet will cost is to know the minimum amount required for each bet. At Churchill Downs tomorrow, here are the minimum amounts required for each bet offered:

Win, Place, Show: $2
Exacta: $2 Straight; $1 Wheels and Boxes
Trifecta: $0.50
Superfecta: $1.00 on Derby Day (All other days the minimum is $0.10)
Daily Double: $1
Pick 3, Pick 4, Pick 5: $0.50
Pick 6: $2

Two additional exotic betting terms that are relevant to wager cost are "BOX" and "WHEEL", and they apply specifically to exactas, trifectas and superfectas.

A bet that is BOXED means that your selections can finish in any order. For example, say you like the #1, #2, and #3, you want to play them in an exacta but you don't know which one you want to pick on top (to win). You could "BOX" those three horses in an exacta and you would win if any of those three finish first and second.

A WHEEL (or PART WHEEL) is different than a box in that it involves selecting different horses in each position of the wager. For example, let's say you like the #1 to win, but think the #2, #3 and #4 might finish second. In that situation you would bet an exacta wheel where the bet would be set up to pay if the #1 wins and either 2-3-4 finish second. If any of 2-3-4 win and the #1 finishes 2nd, you would not win with that exacta wheel.

You might be thinking, "Why would anyone NOT box an exacta, trifecta, or super since my picks can finish in any order, while with a wheel there is less margin for error?" The short answer: because boxing a bet costs more.

Straight wagers are easy to calculate: a $20 win bet costs $20. No issue there.

A box bet is calculated by multiplying the bet amount by the total number of horses selected, and then multiplying that by the total number of horses selected, minus one. Or, stated another way:

Selections: 1-2-3-4-5 (five horses)
$1 Exacta Box Cost: $1 x 5 x 4: $20

Make sense? For trifecta and superfecta boxes you calculate the cost the same way but keep subtracting one from the total number of horses in each leg. For example:

Selections: 1-2-3-4-5
$1 Trifecta Box Cost: $1 x 5 x 4 x 3: $60

Selections: 1-2-3-4-5
$1 Superfecta Box Cost: $1 x 5 x 4 x 3 x 2: $120

You can see how the costs start to escalate in a box situation since you're playing every possible combination with those numbers.

With a WHEEL bet, the cost is kept down but you need to decide which horses you like in certain positions. Let's take the above situation again. Let's say you like the #1 and #2 to win, but think any of those five could finish 2nd. Here is how you would calculate that bet cost:

Selections: 1-2 to finish 1st, 1-2-3-4-5 finish 2nd
$1 Exacta Wheel Cost: $1 x 2 x 4: $8

Because you are using the 1 and 2 in both the win and place slots, you calculate the wager by multiplying the number of horses in the first leg by the number of horses in the second leg, minus one. If you excluded the 1 and 2 from the second position but still used five horses, the bet would calculate as below:

Selections: 1-2 to finish 1st, 3-4-5-6-7 to finish 2nd
Cost: $1 x 2 x 5: $10

Right away you can see that an exacta wheel bet costs about half as much as the box situation since you are playing less combinations. There's a higher risk, but the rewards (and profit margin) are better since you are not wasting money on combinations that you don't believe will come in.

(Side note: if you were at the track or an OTB and wanted to make either of those exacta bets in person, you would walk to the window and say: "Track Name, Race Number: $2 Exacta Box, 1-2-3-4-5" or "Track Name, Race Number: $2 Exacta, 1 and 2 with 1-2-3-4-5". Saying "with" is how you separate horses from the first, second, third or fourth positions to the clerk. And always check your ticket before you walk away.)

Calculating trifecta and superfecta wheels follows the same formula as the exacta bet above. However, if you want an easier way to calculate your wagers, you can find a variety of waging calculators on the web, including a nice one at WinningPonies.com.

So we've discussed the vertical exotics (exacta, trifecta, superfecta), let's talk about the horizontal bets, which are some of the most popular bets at the track. A horizontal wager is any bet that involves betting on a series of races, rather that just one specific race. A Pick 4, where you try to pick the winners of four consecutive races, is a horizontal wager and can pay very nicely, depending on the odds of the horses that win during the sequence. As with all wagers, you can select as many horses as you want but the cost of your ticket increases with every horse added into the mix.

Let's say you are looking at a four race sequence where you like the following horses in each race:

Race 1: 1-2
Race 2: 1-2-3-4
Race 3: 1
Race 4: 1-2-3-4-5-6-7

To collect on a Pick 4 wager using the horses above, you would need at least one of your selections to win in each leg; pretty simple. Using only one horse in a specific race, as is done in the 3rd race in our example, is called "singling" a horse. Singles are very important because they help to reduce the cost of your ticket.

Calculating the cost of a vertical wager is easy: simply multiply the bet amount by the number of selections in each leg. Using our above example, that Pick 4 ticket would cost the following amount.

$0.50 Pick 4: $0.50 x 2 x 4 x 1 x 7: $28

The power of the "single" should be obvious; if we had selected two, three or four horses in that 3rd race, our ticket would have doubled, tripled or quadrupled in cost. It's not required that you use a single; if you have the money to spend and you want better coverage, spend away. But most players like to try and find one race where they have a prime single so they can use more horses in the races where things appear more wide-open.

Additionally, you don't have to play each wager to the minimum amount. Our Pick 4 example above could be played to a $1 base, or $2, or whatever you want. Of course, the higher the base amount, the more expensive your ticket becomes.

Selecting The Right Wager

If you're a little overwhelmed with the sheer amount of betting options you can take heart with the fact that you don't need to play them all. In fact, the best wagering strategy usually involves finding a solid win bet before doing anything else. If you can't figure out which horse is going to win a race, you probably shouldn't be diving into bets requiring you to also pick horses in 2nd, 3rd or 4th. But if you find a solid play for the win, then you can start to branch out into the more complicated wagers. Like in poker, you need to go "all in" when you feel you have the advantage, not because you want the action.

Our horse racing blog And Down The Stretch They Come has two must-read resources for Derby fans: A Beginner's Guide To Following Horse Racing and a glossary of horse racing terms.

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