The Superfecta payout on the 2005 Kentucky Derby was something like $1.7 million. IIRC, one bettor collected on that bet, on a $1 box.
If he had bet $50 on the winning combination, he would have collected about $85 million.
Now, I’m sure that there was far more than $85 million in Superfecta action on the Kentucky Derby. But what if there wasn’t? What if he had bet $50, and won, on some Superfecta of long shots on a maiden claiming race at some small track in the Midwest, at 800,000-to-one odds? How does the House (any House) cover payouts on (relatively) large bets with extremely long odds?
It’s my understanding that the odds at a racetrack directly correspond to the amount of money bet on that race, at least at the track itself. This explains how one person betting, say $4000 to win on a longshot at a small track will screw the odds beyond belief. Following this reasoning, I’d assume that the payout would always be covered and that a large superfecta bet would’ve changed the odds so that the bet that won would have been covered, but the payout percentage would have been worse. I tried finding some information online but was throughly unlucky/unskilled.
Of course, betting $50 on a superfecta is completely insane. Unless you won. In which case it would be brilliant.
In horse racing, the odds are set up and calculated such that the total payout, no matter which horse wins, will never exceed the amount taken in. So if, for example, the odds for a particularly outcome are 1/1000, that means that no more than 1 out of every thousand dollars was bet on that particular outcome. It doesn’t mean that the odds of that happening are 0.1%, rather that only 0.1% of bets would have to be paid off if that event occurred.
(Look up “parimutuel betting” somewhere for a better explanation.)
In casinos, which are governed by the laws of chance rather than statistics, the house will usually have (1) a maximum bet, to ensure that no single bet can result in an impossible payout; and/or (2) an insurance policy to cover them, just in case that 1 in a billion bet actually pays off.
I understand how parimutuel betting works, silenus. But it’s based on $2 bets.
So, if the payout on your $1 Superfecta bet is $850,000, that means that for every dollar bet on your Superfecta combination, there’s $850,000 bet in other action (ignoring such niceties as the track’s cut). But if you make the same bet 100 times, you could, theoretically, bankrupt the house. Or could you? That’s my question.
No. The total odds reflect the total amount bet. My understanding of the system is that if you bought 100 of the same bet, then the payout on each would be 1/100th of the 1 ticket payout. Paramutuel means never having to say you are bankrupt.
Not entirely true regarding paramutual betting. Most tracks are required to make a minimum payout of either $0.05 or $0.10 on a dollar bet and I have seen several “negative pools” where large sums of money were placed to show on a prohibitive favorite where the track was required to pay out $2.20 on a show bet.
The maximum bet also prevents a wealthy customer from making “double-or-nothing” bets (by betting the amount they are down) ad infinitum. Once the maximum bet has been hit, the gambler can never recover thier losses with a single win.