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Introduction
The purpose of this article will be to explain the basic
bets available to the racetrack bettor, how the payoffs
are determined, and the cut the track takes from the
betting pool. This article will not give advice on how to
choose which specific horse to bet on. If you need to bone
up on the basics of racetrack betting you are in the right
place.
Pari-Mutuel Betting
The racetrack operates on the same principle as an
insurance company. A group of bettors pool their money
together through an agent (either the track or the
insurance company), the agent takes out a cut for
themselves to cover expenses and profit, and the rest is
given back the winning players. In an insurance situation,
the bettors are betting on death or some kind of casualty
- at the track the bettors are betting on horses.
At the track there are various types of bets available. All money bet on a specific kind of wager is pooled
together. Once the betting is closed, the track will
deduct their share to cover taxes, dues to the Racing
Association, overhead expenses, purse money, and the
Breeders’ Fund. For example, at the Pimlico track in
Baltimore (home of the Preakness stakes) the track will
deduct 17% to 25% depending on the type of wager. The
remainder of the pool will be divided among the winning
bettors.
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