Horse Racing Odds Explained: How to Read Odds & Calculate Payouts

Today is the day. You proudly strut yourself to your favorite racetrack. You know your stuff and you’re sure of your picks. You know the odds and place your bets with confidence. The race begins, the anticipation builds, the finish line roars and you are congratulated by your friends when you walk out with cash in your pocket.

This guide simplifies and explains horse racing odds and how to calculate them.

Everyone wants to be a winner, but the reality is that most of us do not fully understand the intricacies of horse racing odds. Sure, placing a bet is easy enough but that is why most race goers walk out with less money than they came in with. Are you one of them?

Are you just placing bets blind and hoping for the best? It’s completely fine if you are. We won’t judge. We made this guide just for you! Here we will explain and simplify horse racing odds to make betting easier.

One of the surest ways people lose money on horse racing is not knowing how to bet or understanding the odds. To a beginner, all those numbers on the tote board and hearing all of the horse racing odds jargon can be pretty daunting.

Want a better shot at walking away a winner? Then trust us and keep scrolling.

What Are Horse Racing Odds

Odds are simply the way prices and payouts are shown at a horse track. The numbers displayed as 4-7 or 2-5 tell you what you pay and how much you get back if the horse you bet on wins. The first number tells you how much you could win, the second number is the amount you bet. So, if the odds are listed as 2-1, you’ll get $2 for every $1 you bet. Odds are displayed in one of two formats.

Fractional: These are more traditional and widely used and are displayed as 4/1. When spoken, you would say this format as “four to one”. You can read these horse racing odds as for every $1 you bet, you will receive $4 if you win (plus your original bet).

Decimal: This type of odd is recently introduced to the industry and is more commonly used in Europe. These are displayed in the format of 5.00, unlike fractional odds, your stake is already factored in. To get your potential return, multiply the odd by your bet. If the odd is displayed at 5.00, multiply this by your stake to calculate potential returns.

Let’s explain some U.S. horse racing odds examples:

6-5 odds

  • Spoken: 6 to 5 odds
  • Meaning: You will get $6 in profit for every $5 you wager
  • Actual Payout: 6 divided by 5 plus 1 = 2.2 times original $5 wager = $11.00 Payout

20 odds

  • Spoken: 20 to 1 odds
  • Meaning: You will get $20 in profit for every $1 you wager
  • Actual Payout: 20 divided by 1 plus 1 = 21 times original $1 = $21 payout.

10-2 odds

  • Spoken: 10 to 2 odds
  • Meaning: you will get $10 in profit for every $2 you wager
  • Actual Payout: 10 divided by 2 plus 1 = 6 times original $2 = $12 payout

How to Read Horse Racing Odds

So how exactly do you read horse racing odds. Glad you asked! Let’s explain this from the top.

The Morning Line:

Before any of the actual wagering starts, there are “morning line” odds. These are the odds placed on each horse by the track’s handicapper. These are published in either the program, racing form, or online at your sportsbook. In today’s horse racing, the morning lines are rarely something to go by since they change so much as more bets are placed.

Changing Odds:

Either at the track on the tote board or on your online sportsbook, the odds will change depending on how many people are betting on each horse in the race up until post time.


Each race has a favorite. This is the horse most likely to win. If there is more than one horse with the same odds of winning it may be displayed with “JF” meaning joint favorite.


Fractional odds can easily be translated to probability percentages. As such, a race with 1/1 odds would signify that for every failure, there would be one success, giving you a 50% probability. A 2/1 fraction suggests that for every 2 failures, there’s one chance of success, giving you a 33% probability; 3/2 means a 40% chance, 2/3 works out to 60%, and 10/1 means a 9% chance, and so on.

Standard Win Bets and Payouts

The minimum standard bet for horse racing is $2. Depending on the race and the rules of the racetrack, the minimum could be slightly lower. Before you even begin to place a bet, you need to know what the odds are of the particular bet you want to make. This easy-to-read chart explains exactly what the payout would be on a $2 winning bet at various odds:

How to Calculate Betting Odds and Payouts

One of the reasons why horse betting is difficult is because the odds fluctuate every time a bet is placed. This fluctuation is called pari-mutuel wagering, or pool betting. In typical betting games, you’re betting against the house. With horse racing you are betting against other betters.

Once the winning horse has crossed the finish line, the house will deduct its take and the remaining amount is then divided among the people who bet on the winning horse.

To see an example of this calculated, keep on scrolling!

There are different ways to calculate horse racing odds based on the type of bet.

There are several types of pari-mutuel horse bets. A few of the most common are:

Straight Bets

  • Win Bets: Choosing the horse that crosses the finish line first.
  • Place Bets: You are betting on a horse to finish second.
  • Show Bets: Placing bets on a horse to finish third.

Exotic Bets

  • Exacta: When you pick the first and second place horse in that order.
  • Trifecta: Select the first three finishers in a single race in order.
  • Trifecta Box: Pick the first three finishers to finish in any order.
  • Trifecta Key: Pick three horses, choose one to win and the others to come in second or third.
  • Superfecta: Pick the order of the first four finishers in one race.
  • Superfecta Box: Pick four finishers, they can finish in any order.
  • Superfecta Key: Pick four finishers, choose one to win and the other three finish in any order.

Unlike with win bets, there are no exact horse racing odds for exotic bets because there are too many variables. Yet at Amwager, we post probable payouts for exacta and daily double wagers. Also for exotic wagers, the payouts are calculated differently. Once the house takes its cut, typically 15%, the rest is divided between the bet winners. Your payout is calculated by subtracting the amount of winning dollars from the total pool, then dividing the remaining pool by the amount of cash bet on the winner, and finally adding back in the winning bet amount.

Sounds complicated? Here’s how it breaks down:

Race: $100,000 in the winning bet pool.

House takeout: $15,000 (15%) (This means there is $85,000 available to be won).

Total bets on the winning horse: $42,500

Your personal bet on the winning horse: $2

He wins!

  • To get the odds: $85,000 / $42,500 – $1 = $1.00 or 1 to 1 odds.
  • To get the payout per dollar (or decimal odds) $85,000 / $42,500 = $2.00
  • Your $2 bet will pay back a total of $4.00
  • You made a profit of $2.00 on a $2.00 bet.

For easy math, we used round numbers. But in the real world, this does not always happen. Payouts use the actual odds and are rounded down to the nearest nickel or dime, depending on the rules of the racetrack. This rounding is called breakage.

This is why every racetrack has television simulcast commentator who handicaps between the races as well as publishing handicapping tip sheets to help you place your bets. At AmWager, we have our own horse racing handicapper that gives expert picks on upcoming races.

Best Odds in Horse Racing

Now that you know how to read and calculate horse racing odds, you are ready to take the bet! But when the day comes, it is good to know what your overall chances are in walking away a winner. Some bets have better horse racing odds than others. Here is a quick reference chart that explains your chances of winning the types of bets mentioned earlier and the expected payout.

Glossary: Horse Racing Odds Jargon

One sure way you will be tagged as an amateur is if you do not know and use horse racing odds jargon. Here are some of the vocabulary you need to know:

  • Fixed-Odds: A bet where you get the odds advertised by the better operator at the time you place your bet. Please note that AmWager does not used fixed-odds.
  • Late Money: When a horse gets a lot of money wagered right before a race.
  • Odds-On: A term used for a strong favorite to win, when to have to actually spend more to win. A horse priced at 1/3 is odds on.
  • Long Odds: This is an underdog bet, but if you win you’ll receive many multiples of your stake back. A horse priced at 50/1 is long odds.
  • Short Odds: This is a high chance to win, but you will only make a small profit. A 6/4 odd is short odds.
  • Carryover: The money from a pari-mutuel pool if nobody selects the right winners. The money left in the pool is added to the next instance of that pool.
  • Consolation: A payout even if nobody picks the right winners, the Pick 6 will give a small consolation payout to a play that “almost” wins – this is where the term “consolation prize” is coined. The consolation is usually much less than the full payout.
  • Minus Pool: If the total amount of bets is insufficient to pay the holders of the winning ticket the legal minimums the track is required to make up the difference.
  • Odds Board: The tote board, usually found in the infield.

And They’re Off!

When it comes to horse racing odds, there are so many factors to consider that it’s no wonder some people find it confusing. Keep in mind, the top ten riders in the jockey standings win about 90 percent of the races run during the meet and favorite horses win about 33 percent of the time, and have low payoffs.

Have fun at the race track, take a chance and hedge your bets! We hope this guide better explains horse racing odds and turns you into a confident bettor.

If you want to try and beat the horse racing odds, join our online betting platform and view live video of races!

See you at the finish line!

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