Distribution of place and show pools

[rmorgan]

Having had such good luck in getting my last question answered, I thought I'd try again.

Does anybody know how tracks (e.g., horse racing establishments) determine how to return the place and/or show pools to the winning bettors?

The method by which the win pool is determined is fairly obvious, since there's generally only winner. But the other pools are less obvious.

It's clear that the pools are not paid out in proportion to the money wagered on the first- and second-place horses, because in that case the place spot would pay the same for each of them, and that's rarely the case. It also seems that it's not done with half of each pool going to each horse, because as anybody who's ever played the horses can tell you, if a heavy favorite wins the place and show bets are "wrecked" for the second- and third-place finishers, indicating that the amount to be paid for any given horse is not independent of how the other horses finish. So, how's it done?

For the moment I'm not concerning myself with the track takeout or the "minus" pools that occur when a horse gets so much play to finish second or third that the payout would be less than $2.00 if not for rules stating that a "winning" bet must pay at least $2.10 or $2.20 (depending on the state).

[RealityChuck]

Place and show payouts are calcuated in the same matter as win payouts. You just divide up the total amount bet.

In win betting, you take the total amount of money bet, and subtract the money bet on the winner. Then you divide that figure by the amount bet on the winner. That gives you the payoff per dollar bet. Since the standard is a two-dollar bet, you double that number, and add the $2 in the original bet.

The only difference in place and show is that the total amount bet is divided in half (place) or thirds (show). In place betting, for instance, if $1000 was the total amount bet after the track took its cut off the top (a very slow day at the track :) ), and $100 and $300 are bet on the two place horses, you first take the $1000 and divide it in half. Then you subtract the $100 from that ($400), divide that by $100 ($4), double it ($8) and add the $2 back ($10). The second horse, you'd take the $500, subtract the amount bet ($300 -- total $200), divide that by the total bet ($200/$300 -- $0.67 -- rounded to $0.60), double that ($1.20) and add back the $2 ($3.20). (Assuming my math is correct. :( )

The same for show betting. There's an added requirement that the payoff can't be less than $2.10 for a $2 bet. In some cases, an odds-on favorite can create what's known as a minus pool, where the track actually loses money on show bets.