Horse Racing Markets

There are so many options available to you when placing a bet on a horse, that it can be both exciting and intimidating. It is therefore worth understanding the options to help you decide how to bet. 
For the moment let´s just look at Odds to understand the maths behind this simple looking number.

Calculating Horse Racing Odds

There are 2 systems for calculating odds in Australia, the Tote and Fixed Odds.
Deciding which is better, Tote or Fixed Odds, is not that simple. The TABs offer tote prices or Fixed Odds across many betting markets, but their margins are usually less competitive than the bookmakers.


With Tote betting in Australia, the punter bets with any of the TABs or Totalisator Agency Boards, these are gambling bodies who operate the parimutuel (from Europe) betting system.
Odds are determined using a formula that takes into account a number of factors:

  • the total amount of money that has been bet on a race
  • the amount that has been bet on each horse 
  • the percentage of the money that the on-track or off-track betting site keeps.

This means you place your bet and your stake goes into a ‘pool’ of money. Each bet type has its own respective pool even before any bets have been made, the initial odds are based an estimate of the percentage of the total betting pool that will be bet on each horse. Once bets are made and recalculations are made, the odds may change if the estimates were incorrect.
The bookmaker or “house” take their cut and the payoff odds are calculated by sharing the remaining pool amongst all winning bets. With the Tote the bookmaker displays the approximate odds that they believe you will receive. This approximation is based on the quantities of bets received to that point. These odds will change, as any additional money is placed on each outcome. No-one knows the actual odds they will receive until betting has stopped and the race has commenced.
Below is an example of a race with four horses, only one can win and assume a house-take of 10%.

OddsPayout in Each Case

In this example, the total pool is $510, the house will take 10% leaving the total payout as $459 and the horse with the most money backing (D) at $240 will have the lowest odds 1.91. 

Fixed Odds

When deciding to set the odds for a runner, the bookmaker needs to work on the probability of each potential outcome. 
With Fixed Odds racing, to calculate the winning chance of a horse you divide 100 by the odds or market price. So:

a horse that is $2 will have 100 / 2 = 50% chance of winning a race 
a horse that is $5 will have 100 / 5 = 20% chance of winning a race  
a horse that is $20 will have 100 / 20 = 5% chance of winning a race  

But the odds never reflect the true probability of the race, if you add up all the chances for a race you will always come to over 100%. Here is an example of real race in Australia with 6 runners, the total of the ”chances of winning” added up to 130%

RunnerOddsChance of WinningBetWinnings

Another way to look at these calculations is that you need to bet $130 to receive $100 in winnings, if you look at the Bet column this is the amount you need to bet on each runner, the total outlay adds up to just over $130, if any of these runners win, and one will, you will win $100, but your total outlay was more at $130.

The bookmakers, who are not charities, will keep the $30 as profit or as funds needed to run their business 😊.

Bookmakers Fixed Odds can be interesting as they can sometimes get their calculations wrong. So, a good time to look at Odds is when they are first published for a race. Check across a number of bookmakers and compare the odds for anything out of normal. 

Another situation, which takes time and knowledge, can be with a horse who is running for the first time. There are likely to be people in the industry who know of a horse with a great pedigree and may get onto the horse early in the betting, if you are watching this happen, check other bookmakers who may be slow to react to the Fixed Odds price tumbling. 

Worth noting

Everything is a risk, I often review the Fixed Odds on, or preferably just before, race day and if a horse I fancy has high odds I sometimes jump in. Hopefully I will watch the odds tumble as others get onto this horse and Fixed Odds get closer to the Tote as time gets closer to the race. Of course, many factors can affect my horse, weather, what they are that day, what form the on-track punters see, etc, so this is not for the faint hearted. Believe me this is not fool proof, but sometimes you just feel lucky 🍀.

After a long introduction, that I thought worth of mention, let´s start with the easiest pair of Odds, well maybe not that easy … 

Win and Place

A Win bet means you want the horse to simply finish the race in 1st position. I did not simply state ”win the race” as your horse could finish second and under a Protest it could be promoted to 1st. 

A Place bet means you want the horse to come in the first few finishers. In a place bet, if the horse comes towards the front, you win depending on the following:

  • For fields of 8 or more runners, the place dividend is paid out if your horse comes 1st, 2nd or 3rd.
  • For fields of 7 or fewer runners, the place dividend is only paid out if your horse comes 1st or 2nd.
  • For fields with runners of four or less, there will be no place dividend paid out. 
  • Place bets will have a smaller payout than a Win Bet, as there is a higher chance of a great outcome.

When it gets interesting is when horses drop out of a race after you have placed your bet, these are also known as late scratchings. 

You may win, but the payout may be less than expected due to deductions, one of the reasons being the odds of the horse or horses that did not start the race. If low odds (favourite or close to it) drop out you will receive less payout. If the horse or horses that drop out are high odds, ie not favoured, then you may still win close to the amount expected. On their websites, Bookmakers should have a schedule of deductions listed for all the odds of the late scratchings and the payout calculator.

If you make a Place bet and horses drop out to take the number of starters below 8. What happens? If that horse that drops out is your selection, what happens? You bet on 4 consecutive race in a Multi and your horse scratches from the 4th race what happens? 

It is worth checking the bookmakers Wagering Rules, for example, Ladbrokes have 3 interesting rules which will also take into account the relevant deductions schedule:

  1. In the event of a field reducing in size from eight or more runners to five, six or seven runners due to scratchings, dividends will be paid on first, second and third places on all fixed odds place bets struck prior to the field being reduced. 
  2. In the event of a field reducing in size from five, six or seven runners to less than five runners due to scratchings, dividends will be paid on first and second place on all fixed odds bets struck prior to the field being reduced. 
  3. For Australian racing, in the event that Place dividends are declared by less than the three Australian Totes, all Place wagers will be void and the stake/s fully refunded to the customer's account.

One thing that is worth checking if your bookmaker is following a type of Non-Runner No Bet rule, whereby, if your horse becomes a non-runner, the bet will be refunded to you. 

See, not so easy now, the list goes on and on, but for now, let´s try to keep this simple.

At least all bookmakers agree on returning bets for cancelled or abandoned meetings.

Each Way Bet

An Each Way Bet is 2 separate bets, combining a Win bet and a Place bet. Half of the stake will be placed on the Win and half of the stake will be placed on the Place.

For example, a $50 Each Way bet will be $50 on the Win & $50 on the Place for a total stake of $100.

So , if you horse does not win you stand a chance of some winnings being recovered based on the Place Odds. If your horse wins though, you placed a great bet.


Although many people like to keep to the tried and tested betting options already mentioned previously, there are a large number of punters who like, let´s say, to push the boat out a little further with wagering on exotics. Exotic wagers can be made within the same race or across multiple races. Some large amounts of money can be won in a relatively short time due to compounding of multiple odds.

Here are 4 of the most common exotics seen in Australian racing.


An Exacta simply consists of picking two runners to place first and second in the correct order. There must be at least 3 runners in a race for an Exacta to be offered by the bookmaker. This option sounds so simple but even then you may hear of the following terms: 

  1. Straight Exactas – this is an Exacta.
  2. Boxed Exactas – allows you to select more than 2 horses in a race but the winner and 2nd must come from your selection.
  3. Banker Exacta – as per Boxed Exacta but you are also nominating one of your selections to be placed 1st or 2nd and the other place can be any of those in your selection.

You can place multiple Exactas in the same race. With the later exotics attempting multiple will get a little confusing to visualise.


A Quinella consists of nominating two (or more) runners to place first and second in any order. Again you may see terms similar to those of Exacta:

  1. Straight Quinella – this is a Quinella
  2. Boxed Quinella – allows you to select more than 2 horses in a race but the winner and 2nd must come from your selection, in any order.


Now things start to get a little harder, but the rewards could be greater. A Trifecta consists of selecting three runners to place 1st, 2nd and 3rd in the correct order in the same race. 

You can select as many runners as you want and make it a boxed Trifecta, or also pick a standout for any of the 3 positions, like the Exacta Banker.

First 4

You guessed it, a First 4 consists of selecting four runners to place 1st, 2nd, 3rd and 4th in the correct order in the same race. Similar terms again may appear:

  1. Boxed First 4 - Select more than four horses to finish 1st, 2nd, 3rd and 4th in any order in a race, you are boxing the horses in the bet. 
  2. Banker First 4 - Select four or more horses to finish 1st, 2nd, 3rd and 4th in the correct order in a race, with one or more of those selections being nominated to finish in either 1st, 2nd, 3rd or 4th place


This is a popular betting option in Australia with many bookmakers providing their tips of the day.

All you have to do is pick the winner of the four consecutive races to pocket a whopping dividend. If all 4 runners win, you win a dividend, which is not known till after the races have finished.

It is worth checking with the bookmaker but if a horse you have selected is a scratched, that portion of the wager will be transferred to the substitute favourite of the race in question.

If the substitute favourite was your initial selection and it is scratched .. well let´s not go there, for no, but refer to the bookmaker´s wagering rules, which are usually available online.
Quaddies are typically offered at selected race meetings.  

Others Exotics….

There are a few other exotics/options offered by different bookmakers:

  • Super 6 - Pick the winner of the six consecutive races and score a BIG dividend
  • Running Doubles – 2 consecutive races, and the first leg commences from the race you're on when you select Running Double. Running Doubles are therefore not available on the final race at any meeting.
  • Daily Doubles - not always consecutive, more of a bookmakers choice, they will highlight which race is the first leg, and which race is the second leg.