Even if the chaos factor is ignored, it would not be possible to parley a couple dollars into millions betting on horses in a couple months, you would have to grind it out with moderately large bets over a period of time. There are two types of betting, fixed-odds and parimutuel.
Fixed-odds betting was the earlier form where a bookie would determine the odds at the time of your bet with him. He would use his accumen to determine the odds offered at first, then adjust them as the bets come in. Example: He figures a horse has a one-in-twenty-five chance of winning a race. He might offer twenty to one odds on early bets. Then, say the favorite drops out due to lameness. Now your horse has a one in fifteen chance of winning and people start clamoring to bet on him. Well, their bets are going to be at say, twelve to one, not twenty.
So, you’ve bet and rebet your original investment up to $100,000 and swagger in with to lay it on that 40 to 1 shot you know is going to win today. You’re not going to get that bet down at 40 to 1. If he covers it at all, the bookie would offer it at 10 or even 5 to 1, still a profit but not so much as you think. And that doesn’t factor in answering pointed questions from large men with no necks.
With parimutuel betting, the situation is even worse. Introduced in North America about 1926, in parimutuel betting the odds are determined by the bettors themselves. All of the money is put into a pool, the track rakes off a percentage – typically around 20% – and the remaining money divided among the winning ticket holders. A popular horse will have a lot more people holding his number so everyone gets not so much. Those lucky few who believed in an unpopular horse divvy their prize into far fewer, far larger shares.
So, you show up at a track where your 40:1 shot is running. There’s $100,000 in the win pool and only $2,000 of it is on your guy. Your drop your $100,000 and walk away with a fistful of $100 tickets. Now there’s $200,000 in the pool, $102,000 on your guy. He wins, and the $160,000 left after the rakeoff is parceled out, roughly $156,800 to you and $3,200 to those who held the other tickets. Not bad for an afternoon’s work but hardly the $4,000,000 you were figuring on.
I think I like the peppercorn idea the best.