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How to Read Horse Racing Odds

Horse Racing Odds

Horse racing can provide a thrilling way to place wagers and enjoy profits. With races being run all over the world and sportsbooks offering competitive odds, this sport is one of the most profitable for bettors. Before jumping into the action, bettors need to understand how the odds and payouts work. With horse racing, bettors will wager against each other instead of betting against the house. There are also no fixed odds in use. Learn how to read the odds before getting started to determine how the payouts are generated from any winning wager.

Table of contents

  1. 🏆How Betting Odds Work
  2. ❓Types of Horse Racing Odds
  3. 🔍Reading the Odds
  4. 💰Calculating Payout

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How Betting Odds Work

When looking at the odds listed at a sportsbook for horse racing, new bettors may have a hard time understanding what these mean. The odds listed are simply a numerical representation of the likelihood of the bet being a winner. These odds are calculated on the probability of any horse winning a certain race as well as the likelihood of that horse finishing in the money. For example, when a sportsbook lists a horse at 10/1 odds, this means there is a 10% chance of the horse winning the race and a 90% chance it will finish in the top three positions.

Example:

If a sportsbook lists a horse at 10/1 odds, this means:

  • There is a 10% chance of the horse winning the race.
  • A 90% chance of finishing in the top three positions.

Odds reflect the likelihood of success and the level of return bettors can expect.

Types of Horse Racing Odds

Horse Racing odds are a way for sportsbooks to indicate the likelihood of a horse winning or placing. When odds are low, there is a lower chance of that horse winning. This also means that there will be fewer payouts issued. When the odds are higher, there is a better chance the horse will finish in the top three positions and there will be more returned. In most cases, it is better to opt for longer odds when a race begins.

As races progress and favorites are closer to a win, the odds will be adjusted. A horse that may have originally been a long shot can now have shorter odds, which means the sportsbook believes this horse may be a likely winner. Each sportsbook will present odds using one of three systems. These are explained in detail below.

Fractional Odds

The majority of sportsbooks will use fractional odds and these are used on all markets, whether traditional outright bets are being placed or bettors choose exotic bets. To calculate fractional odds, divide the amount that can be won by the amount of the bet. A $100 bet on a horse with 5/1 odds will offer a $500 payout if the horse wins. 

  • How to calculate: Divide the potential profit by the bet amount.

Example:

A $100 bet at 5/1 odds will yield:

  • $500 in winnings plus the original $100 bet for a total payout of $600.

Decimal Odds

Decimal odds are not commonly used in US horse racing. These are often seen in European racing. Decimal odds are fairly easy to understand and will allow for a quick comparison between various horses. Let’s say the odds are 1.96. This means that for every $100 that is wagered, $196 will be earned if that horse is a winner. Calculating decimal odds is done by dividing the stake amount by the return. When a race consists of multiple horses that have a high chance of winning, the odds are lowered by the sportsbook.

  • How to calculate: Multiply the stake by the decimal odds.

Example:

With odds of 1.96, a $100 bet will return:

  • $100 x 1.96 = $196 (including the stake).

Moneyline Odds

It is possible to see horse racing odds listed as moneyline odds, or American odds. These are a positive or negative number. Favorable odds are indicated with a + sign and show how much can be made when a $100 bet is placed. Unfavorable odds use a - sign and show how much has to be bet in order to receive a $100 profit. For example, a horse with -200 odds will need a $200 bet to win $100 and a horse with +300 odds will offer $300 in payouts for a $100 winning bet.

  • Positive Odds (+): Show potential profit from a $100 bet.
    • Example: Odds of +300 mean a $100 bet will return $300 profit (total payout = $400).
  • Negative Odds (-): Show the amount needed to bet to win $100.
    • Example: Odds of -200 mean a bettor must wager $200 to win $100.

Reading the Odds

There are many things that factor into how odds are presented at a sportsbook. It all begins with morning line odds. These odds will be placed on every horse in the race by a handicapper at that track. The odds are then listed at the sportsbook. The morning line odds are not overly important with bettors as they change drastically before a race even begins.

The odds that are listed for any horse will change as more bettors place their bets. Bets can be placed right up until post-time. Every race will have a favorite to win and if there are more than two horses that have a chance at being the winner, odds will often be displayed with a JF, which means joint favorite. Horse racing odds are based on probability, so a race that has 1/1 odds will indicate that for every loss, there will be one win, offering a probability of 50%. If the odds are 2/1, for every 2 failures, there will be one chance for success, presenting a 33% probability.

Calculating Payout

The chances of any horse winning a race are entirely based on probability. To determine any payouts that will be earned from a bet, bettors can simply multiply the wager by the listed odds. For example, if a $2 wager is placed on a horse with 30/1 odds, a $60 profit would be earned. Factor in the amount of the bet placed at $2 and the total payout from the sportsbook will be $62. It is easy to determine possible payouts when the odds are whole numbers. If the odds are listed at 4/5, it can be a bit tricky. The formula is the bet amount multiplied by the first number and divided by the second number.

Let’s look at an example where a $10 bet is placed with 4/5 odds. The formula would be $10 x 4 divided by 5, for a result of $8. It is important to understand that horse racing is different from betting on other sports. Horse racing bets use a pari-mutuel system. This means that the odds will be determined by how much is being wagered on a specific horse. The sportsbook will then take a percentage of the total amount of bets, which is usually between 10% and 30%. This money is taken right from the top and the remaining money is distributed to winners.

Straightforward Example (Whole Numbers):

  • A $2 bet at 30/1 odds yields:
    • $2 x 30 = $60 profit (plus the original stake, total = $62).

Complex Example (Fractional Odds):

  • For 4/5 odds on a $10 bet:
    • Formula: $10 x 4 ÷ 5 = $8 profit.

Conclusion

The fact that pari-mutual wagering is used with horse racing makes it an interesting sport for bettors. Many believe that the odds listed will represent the likelihood of winning a race. Unlike other sports, this is not true with horse racing. While there may be some connection between the odds and the skills of the horse, the odds are based on public opinion. 

The odds will change based on how many bets are placed on each horse. When more people bet on one horse, the odds will fall, so betting on the favorite will provide the lowest possible return. It is important to be aware that the odds received will be based on the odds at post time. If bets are placed when the odds are 5/1 and they change to 20/1 by post time, those will be the odds for that bet. The key to success when betting on horses is to learn how to identify any gaps between public opinion and the reality of a horse winning a race.

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