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Horse racing betting: Terms, tips, and explanations

Here’s everything you need to know about how to pick ‘em and how to bet ahead of the Kentucky Derby.

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138th Kentucky Derby Photo by Michael Heiman/Getty Images

Everyone’s mind turns to the three Triple Crown races — the Kentucky Derby, the Preakness Stakes, and the Belmont Stakes — as they get ready to follow horse racing, if only casually for several weeks over May and June. So it occurred to us that if you're a casual observer of the sport that it could be a little tough to know where to find all the information and data. Consider this a little bit of a primer to help you look you look smart, impress your friends, and maybe even make a few dollars profit.

How to choose your Triple Crown race horse

There are many ways to handicap a horse race in order to pick a winner. Some players rely exclusively on past performances, others are pure physical handicappers (meaning they watch the horses prior to the race to pick out which ones look the best), some play pedigrees, others compile their own speed and pace figures, and others find new and inventive ways to select their horse. There is no one way to handicap a race, but there are some basics that every player usually develops.

If you're looking for the raw data that is the lifeblood of handicapping the horses, you're going to want to get familiar with several websites: the Daily Racing Form, Equibase, and Brisnet. At each of these websites some of the data is free and some of it requires you pay a fee. Generally, entries (with morning line odds), scratches and changes, and results charts are free. If you want Past Performances and other handicapping products (clocker reports, pedigree data, etc.) you will have to pay a fee.

At Equibase, you can access entries, changes/scratches, and results charts without registering. Brisnet and the DRF generally require that you register to access the basic data. The registration is free.

The Daily Racing Form is pretty much the Bible for many horseplayers — it provides past performances for almost every race around the country. You can buy a Racing Form in print at your local newsstand or gas station (there's a Form Finder on their website), or download the Form over the internet at their website using their Formulator program. Equibase and Bristnet also sell past performance information; we've used Brisnet PPs in the past but have never tried out the ones from Equibase. Most of these sites will have samples of what their PPs look like and it's a good idea to see what's out there and what works for you if you want to buy this type of information.

Horse racing, more than any other sport, lends itself to many people trying to sell a potpourri of information to players. Tip sheets, data programs, betting strategies, pedigree analysis, and on and on and on. Some of the information that is out there is great and some is pure crap. If you are just starting out in this game, start slow. Pick up a Form and take it piece by piece. As you get more into the game you'll start to know what information you want to have and what information is just a waste of money.

4 pillars of handicapping horse racing

In our opinion, learning to read the form is the first step in the birth of a handicapper. Even if in the future you utilize other methods than past performances to handicap a race, the foundation of handicapping knowledge can be built by learning how to read a racing form — whether it's a form by DRF, Brisnet, Equibase, or something entirely different.

All of the companies that sell past performance usually have "How To" guides explaining what all the symbols and numbers on their forms mean. A form can be very intimidating if you have no idea what any of the names and numbers represent, but once you learn the vocabulary it can be as beautiful as a priceless work of art.

Learning to read a racing form will help you to understand the four basic pillars of handicapping: speed, pace, form, and class. Simply put, "speed" is related to how fast the horses run the entire race; "pace" concerns how fast the horses run at different points of a race; "form" is related to the current condition of the horse and whether it has been running good or bad in its recent races, and "class" relates to the level of competition a horse has been competing against. A set of past performances provides clues to all four of these handicapping pillars, clues that the player must decipher in order to place a winning bet.

Learning to read a set of past performances isn't difficult but it's also something perfected over time. Once you master an understanding of what the data means, you then can move on to determining how much weight you want to give certain factors in making your wagering decisions. You'll also start to develop you're own handicapping style, which is when the game starts to become a lot of fun — when you start picking winners based on your own theories and conclusions.

How to watch or stream live horse racing

If you want to watch live racing from the comfort of your own home you've got essentially two options: you can watch on one of the two TV channels that cover racing, or you can watch live streaming video over the internet.

The two horse racing channels are Television Games (TVG) and TVG2. Both networks broadcast the live simulcast feeds from the tracks and have on-air personalities that handicap the races throughout the day. Most cable companies offer TVG, although many have it as part of a sports pack or something similar.

If you don't get TVG from your cable or satellite provider, you can still watch all the action through the wonderful world of the internet. Live video streaming is provided free by a few tracks (too few, if you ask me). Tampa Bay Downs, for example, is one track where you can go to their website and watch all of their races live. They also provide free replays. Keeneland also provides live steaming during their spring and fall meets.

If you want to watch the action from all tracks over the net you can usually watch through a wagering website if you are a registered member. The next section deals with wagering websites, or ADWs.

Where to bet on horse racing

Just watching horse racing is great, but the true thrill of the game is the ability to put your money where you mouth is and bet on the horses. If you want to wager on all the action and you don't want to drive to your local track or OTB, AND you live in a state that allows ADW (Advance Deposit Wagering), you can wager over the internet or the phone through one of several sites.

Below is a list of a few of the larger ADWs that people use to wager. Every site is different; some provide free video streaming, others charge a monthly fee or a "per wager" fee depending on your handle, and some give you rebates depending on how much you wager. If you decide to sign-up with an ADW, make sure you read all of the rules and requirements. Many ADWs are going to no-wagering fees and free video, but you should always do your homework before you leap.

Also, like the TV networks, not all ADWs carry every track. Make sure you check what tracks each site allows you to bet on because you don't want to sign up with an ADW that doesn't allow you to bet on Keeneland if you really like to bet Keeneland.

[Note: If you don't know whether your state allows you to bet through an ADW, it's pretty simple to find out. Go to one of the websites and try to sign-up. When you put in your address, the system will let you know whether they can take bets from you or not. Also, an ADW will ask you for your Social Security number. They have to do this since they are required to report to the IRS any winnings over $600, and they have to withhold taxes for any winnings over $5,000. If you hit a trifecta that pays $1,000, that amount gets reported to the feds. If you hit a superfecta that pays $10,000, you'll have 25% taken out before your winnings are deposited into your account.]

Below is a short list of the big, well known ADWs. There are many others out there - some good, some not so good. We make no representation about any of these; some we've used in the past, others we've never played with.

How to make a bet on horse racing

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 you will 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.

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?

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, 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 our 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 fewer 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.

Or, just bet to win

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 second, third, or fourth. 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.


Editor’s note: The bulk of this horse racing guide was written by the former editor of SB Nation’s horse racing site AndDownTheStretchTheyCome.com, Matt Gardner. The guides have since been updated and combined into one.