Betting

Betting on the Favorite, an 1870 engraving

At many horse races, there is a gambling station, where gamblers can stake money on a horse. Gambling on horses is prohibited at some tracks; the nationally renowned Colonial Cup Steeplechase in Camden, South Carolina, is known as one of the races where betting is illegal, due to a 1951 law. Where gambling is allowed, most tracks offer parimutuel betting where gamblers' money is pooled and shared proportionally among the winners once a deduction is made from the pool. In some countries, such as UK, Ireland and Australia, an alternative and more popular facility is provided by bookmakers who effectively make a market in odds. This allows the gambler to 'lock in' odds on a horse at a particular time (known as 'taking the price' in the UK). Parimutuel gambling on races also provides not only purse money to participants but considerable tax revenue, with over $100 billion wagered annually in 53 countries.^[51]

Types of bets

Main article: Glossary of bets offered by UK bookmakers

In North American racing, the three most common ways to bet money are to win, to place, and to show. A bet to win, sometimes called a "straight" bet, means that you stake money on the horse, and if it comes in first place, the bet is a winner. In a bet to place, you are betting on your horse to finish either first, second, and/or third, depending on how many horses are in the race; for example, in a race with 5 horses a place bet would only be for first and second place, but in a race with 10 horses you bet on your horse to finish first, second, or third. A bet to show wins if the horse finishes first, second or third. Since it is much easier to select a horse to finish first, second or third than it is to select a horse just for first, the show payoffs will be much lower on average than win payoffs.
In Europe, Australia and Asia, betting to place is different since the number of "payout places" varies depending on the size of the field that takes part in the race. For example, in a race with seven or less runners in the UK, only the first two finishers would be considered winning bets with most bookmakers. Three places are paid for eight or more runners, whilst a handicap race with 16 runners or more will see the first four places being classed as "placed". (A show bet does not exist in the North American sense.)
The term "Each-Way" bet is used everywhere but North America, and has a different meaning depending on the location. An each-way (or E/W) bet sees the total bet being split in two, with half being placed on the win, and half on the place. Bettors receive a payout if the horse either wins, and/or is placed based on the place criteria as stated above. The full odds are paid if the horse wins, (plus the place portion), with a quarter or a fifth of the odds (depending on the race-type and the number of runners) if only the place section of the bet is successful. In the UK some bookmakers will pay for the first five (some independent firms have even paid the first six) for a place on the Grand National. This additional concession is offered because of the large number of runners in the race (maximum 40). Occasionally other handicap races with large fields (numbers of runners) receive the same treatment from various bookmakers, especially if they are sponsoring the race. The rough equivalent in North America is an "across the board" bet, where equal bets on a horse are set to win, place and show. Each portion is treated by the totalizator as a separate bet, so an across-the-board bet is merely a convenience for bettors and parimutuel clerks. For instance, if a $2 across-the-board bet (total outlay of $6) were staked on a horse which finished second, paying $4.20 to place and $3.00 to show, the bettor would receive $7.20 on what is essentially a $6 wager