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It’s easy to get caught up in obscure horse racing results. However, successful horse handicapping balances the urge to go for a big payout on a long-odds horse, and a recognition that one-third of races are won by the favorite.

Sustaining a positive return on investment (ROI) requires patience, hard work, listening to – but not relying on – free horse racing picks, and awareness of a wide variety of factors that determine who wins races.

Every successful bettor has to know what type of bets to make, and we’re here to explain the various types of bets, and identifying when they are best utilized. We will also touch on basic handicapping strategies, and hopefully, provide a simple but usable guide for players of all levels to consider when encountering a particular type of race.

What Types of Horse Bets Are There?

Making bets at the track is really as simple or complex as you want it to be. Much like daily fantasy sports, you can select one lineup in 60 seconds and go with it, or run a regression analysis. You can either make a quick and easy bet, or do a ton of strategic research.

Simple wagering is known as straight betting, while more involved betting is referred to as exotic. Let’s go through some horse racing terms, discuss odds, takeout, and more.

What Are Straight Wagers in Horse Racing?

There are three type of straight wagers: win, place, and show. These are simple concepts that have been around since the dawn of betting, and all handicappers should understand and utilize them wherever possible.

Win Bets

A win bet is just as it seems: You bet on a horse to win, and if he crosses the finish line first, you get paid. Standard bets are $2, and if the horse is 1/1, you’ll get paid $2 if he wins (plus your wager amount) for a $4 cash-in.

win bet slip image 5/1 odds illustrated image w/ text

If the win bet is on a horse who’s at 5/1, you’d get $10 if he wins (plus the original bet) for $12 total. A 10/1 shot will pay $22 (10 x 2 plus the original bet).

Place Bets

A place bet means that the horse you wager on has to finish first or second in order to win money. The winnings are significantly less (usually around 40% of a win bet), so a $2 bet on a horse that’s 1/1 may only pay $.80 (plus the original two-dollar place bet).

A winning $2 place bet on a 10/1 shot may net something in the neighborhood of $10 (eight bucks for the winning bet and two for the original wager).

Place bets are best used in conjunction with wins, $2 to win and $2 to place. So if your horse finishes second, you’ll still stand to make a few bucks. If he wins, you get paid twice. There’s not a lot of value in straight place wagers.

Show Bets

A show bet means that the horse you select finishes first, second, or third. Because the chances of hitting the board are pretty good, payouts tend to be very low.

If you like a huge longshot, you can make a few bucks betting him to show in the top-three.

Show wagering is meant for the most conservative bettors, as well as those who are happy to make a few cents per race rather than take on more risk. Alternatively, if you like a huge longshot, you can make a few bucks betting him to show in the top-three, instead of betting on him to win outright).

A Key Component of Straight Wagers: The Low Takeout

Straight wagering is valuable not only because it’s easy to understand, but the takeout is low. The takeout refers to when oddsmakers take a percentage off the top of each bet. In many ways, it’s analogous to the ‘vig’ or the ‘juice’ in conventional sports betting. For example, if $100,000 is bet to win, place, or show, anywhere from 12-18% of the pool will go to the track.

However, exotic wagering takeouts can run from 15% neighborhood to more than 25%! Wagering in a $100,000 pool (with $85,000 up for grabs) is very different than the same sized pool that has only $72,000 remaining for distribution.

What Are Exotic Wagers in Horse Racing?

There are two types of exotic wagers: vertical and horizontal bets. While they share many similarities, there are inherent differences between the two.

Vertical Wagers

Vertical wagers require you to pick the order of finish in a given race, whether it’s choosing the correct order of:
• Exacta – first and second place
• Trifecta – first, second, and third place
• Superfecta – first, second, third, and fourth place

Exactas can usually bet for $1 per combination, and sometimes trifectas or superfectas can be played for as little as 10 cents. It costs more to bet multiple combinations and your chances of winning are slimmer.

It’s popular to box vertical bets. This means that you play either side of an exacta. This could mean either both horses finishing first or both horses finishing second. As long as both horses wind up in the top two, you’re in the clear.

exacta and trifecta explained horse racing illustrated animated image

A three-horse trifecta box would mean you select a trio of horses, and if they finish first, second, and third in any order you win.

Horizontal Wagers

Winning horizontal wagers means picking who comes in first in a series of consecutive races. If you feel strongly about betting on two races in a row, you’ll want to play the daily double.

Correctly choosing the three consecutive winners is a Pick 3, Pick 4 is essentially a four-race parlay, and so on.

The Benefits and Drawbacks of Exotic Wagers

While exotic wagers are exciting and often pay a lot, the odds of hitting them are significantly larger than a straight bet. Though it varies by track, the daily double and Pick 5 tend to have low takeouts, exactas fall somewhere in the middle, and everything else has a large percentage taken off the top.

With a minimum bet of less than a dollar, exotic wagers, frequently get expensive in a hurry.

Imagine a Pick 4 where your wager is $.50. Say that you choose two horses in the first race, three horses in the second trace, two horses in the third race and three horses in the fourth race.

pick 4 wagering explained illustrated animated image exacta trifecta superfecta

Even if you only play that wager for fifty cents, the cost is 2x3x2x3= $36 x $0.50 = $18. If you want to include a few huge longshots – or are tackling a Pick 5 or Pick 6 – you can easily invest hundreds or thousands trying to win big. But if you somehow manage to choose all of the right horses, you’re set for a windfall.

The Best Time to Bet on Exotics

Exotic bets are best when you have conviction. If you love one horse, you can bet on him in a horizontal wager. Having that one horse as the only option in a given race, you can then afford to bet on additional horses in other wide-open races. This improves your odds of hitting a longshot that improves the payout.

In vertical bets, you can take that key horse and focus your bet around him (eg. a trifecta with just one horse on top, and then two or three for second and third).

Betting exotics is a lot of fun and the potential prize is huge. However, the cost of the ticket can get high quickly, and betting a small superfecta or Pick 6 ticket is a lot like playing the lottery. Exotic wagers are best when you’ve got a sizable bankroll, strong conviction, or are keying a horse that you really like and trying to maximize profits.

A Brief Introduction to Handicapping Strategies

Though there are all sorts of variations and hybrids, the two primary forms of handicapping are trip and class.

Trip handicappers rely on pace projections to understand how a race will be run and what sort of horse (eg. speed horse, stalker, deep closer) will be able to successfully capitalize on the benefits of their racing style.

Whatever strategy you employ, keep other possible factors in mind, too.

Class handicappers try to determine which horse has been running well against the best competition. Others like to rely on human connections, like betting on the same trainers and jockeys tend to win.

Whatever strategy you employ, keep other possible factors in mind, too. The best horse – if he’s involved in a speed dual early on – will have difficulty holding off an onrushing competitor later on the track. Top contenders ridden by a low percentage jockey is much more vulnerable to an upset. The horse who finishes last against solid competitors may simply be a poor bet, and faced with easier competition, could even continue to falter.

The Key To Success: Understanding Your Goal at The Track

If you’re out for a good time and are throwing around a few bucks, go for a few longshots or try an exotic wager. If losing money is a recurring issue, or your time to handicap is small, concentrate on trying to pick dependable winners. Though a $2 win bet with a low takeout isn’t sexy, it’s among the strongest ROI options.

More than anything, don’t bet every race the same way. If you love two or three horses, bet an exacta or trifecta. If you can’t decide, either avoid putting money down on a race, or spread out in a horizontal wager and key other horses in the sequence you have stronger convictions about.

There are various types of horse bets for a reason: We each see races and horses differently, and recognizing what others miss is a great way to score big. Every race is a puzzle, and enjoying the process of solving each one can be a fun and rewarding experience.

If you’re curious about some of the biggest horse racing wins in the history of the sport, check out our guide some to horse racing history’s notable upsets.