Dear wrytry-ga;
Thank you for allowing me to answer your interesting question.
Odds don't tell you what the horse will pay, but the margin of profit
one person will make and the amount one person needs to bet in order
to get it. Odds are always based on a single bet. In other words, the
odds tell YOU what margin of profit YOU will make on a given bet. For
example, 6-5 means you will get $6 profit for every $5 wagered. 20-1
means you get $20 profit for every $1 wagered, and so on. These are
not probability odds but ?winnings? odds (like you said).
Payoff is another matter however. Payoffs use the actual odds and are
rounded down to the nearest nickel or dime depending on the rules at
that track. This rounding is called "breakage". The payoff is the
amount of money you stand to make based on how much you risk when
calculated against the odds.
There?s more though?you see, before the racetrack pays the winners
they deduct the "take". This is generally somewhere between 14%-20%
depending on the laws of the state and the regulations of the
thoroughbred racing commissions. The money from the ?take? is used to
pay state and local taxes, purse money for the horsemen, expenses at
the track, and the track's profit.
So, to calculate the exact odds on your horse, you need to subtract
the ?take? from the TOTAL pool then subtract the TOTAL amount bet (by
everyone) on your horse to give you the amount of cash that will be
paid out (to everyone). Now you need to divide that figure by the
amount bet on your horse to get the exact odds. Remember, this figure
will always be rounded off to the nearest dime (usually) or nickel
before the payoffs are calculated.
Here is an example of how this is done.
?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.?
HOW TO CALCULATE ODDS AND PAYOFFS - HORSE RACING
http://horseracing.about.com/library/weekly/aa071002a.htm
EHOW: How to Calculate Payoffs on Your Race Bets
http://www.ehow.com/how_5738_calculate-payoffs-race.html
I hope you find that my research exceeds your expectations. If you
have any questions about my research please post a clarification
request prior to rating the answer. Otherwise I welcome your rating
and your final comments and I look forward to working with you again
in the near future. Thank you for bringing your question to us.
Best regards;
Tutuzdad-ga ? Google Answers Researcher
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