Horse Racing and Odds Making
Odds making is the practice, usually performed by professional bookmakers, of setting the betting odds on the result of a sporting event. Most people are familiar with odds being given on each horse winning a particular race, for example 5:2 odds for a favorite or 200:1 for an extreme long shot. In plain terms, a bet on the long shot would return $200 for each dollar bet, with a $10 bet paying $2000 and so on.
Most professional horse wagerers spend a considerable amount of time studying the odds before placing their bets, hoping to find a horse they think will perform better than the odds might indicate.
Those who actually set the odds are called odds makers, and traditionally they would set up odds that were, to use a metaphor, overbooked in order for the odds maker or bookmaker to realize a certain guaranteed profit. Nowadays though, there is heavy market pressure on bookmakers to provide the fairest possible odds and, combined with competition, the bookmaker’s piece of the action is thinner than ever before. The recent phenomenon of Betting Exchanges has been to the benefit of the bettor as it seeks to cut out the bookmaker entirely and let the market itself set the odds based on the direction and amounts of the wagering.
Although it is certainly tempting to bet on a long shot or to place an exotic bet at very long odds, keep in mind that those odds are a reflection of the probabilities involved. Even so, placing a bet at long odds does have its appeal. Risking $2 on an extreme long shot or on a Pick 6 type of bet usually means kissing that $2 goodbye, but it’s often the time between placing the bet and the end of the race that provides the most excitement of a day at the horseracing track!