Ka-Ching!! Congrats on some astute handicapping.
You said the tax authorities don’t deduct a tax at payoff time. Does that mean you pay no tax ever, or are you required to declare this as part of your annual income and expected to pay taxes on it in the normal course?
Surely this can’t be true? A regular situation where it can be statistically proved before the off that a bet has a positive expectation? Wouldn’t need a time machine to get rich if this were the case.
It’s not that regular a situation I’m guessing. Here in NZ there is no show bet - a place is coming 2nd or 3rd (with no third place payout if there are less than 6 runners IIRC). While you’ll occasionally see a place payout higher than a win payout (if a strong favourite wins and an outsider places with a decent place pool) I’d guess it’d only happen once or twice a day. Probably because under the parimutuel system used here odds change as more bets are laid and if all the punters jump on the place bets the odds will change towards the more expected range.
In the UK, the bet itself is taxed rather than the winnings. It used to be that you could choose whether to pay extra when buying the ticket or leave it until you won, but the law changed. Makes sense - there’s always going to be more spent on bets than there is paid out in winnings (in the gambling industry as a whole).
My friends and I bet £1 a race between us at the races at Great Yarmouth many years ago. We won every single race and, though most of them were at low odds, one was at 16 to 1, one was at 33 to one and one was at 48 to one. We were 13 years old (too young legally to bet, but the bookies weren’t fussy) and I’ll never forget the joy of spreading all that money out on the floor and counting it up. 
I just wish I’d kept the betting slips longer (I kept them long enough to show a disbelieving maths teacher) because I don’t expect many people to believe me.
Thanks! It was quite a thrill (I actually thought I might have a heart attack, my heart was beating so fast).
In terms of tax, we don’t pay any tax, at any time, for this type of income. It’s all mine. Another bonus for being Canadian 
Yes, it’s true, but if you read the previous post to mine, you will see that it’s only under the specialized condition that some idiot comes along and plunks 20 grand down on the favorite to show. The favorite has about a 1/3 chance of NOT showing, so when that happens, there’s so much money sitting in the show pool, and so little of it is on the other nags, that no matter which ones do show, they invariably pay more than they would have even to win. 2nd and 3rd favorites have the largest chance to show after the 1st favorite, so they have a positive expectation.
A professor of mathematics who also writes about horses said this in one of his books. I have a database of some 40 - 50 thousand separate horses, with something approaching 3/4 of a million past performances amongst them. I regularly write programs to mine that database and crunch numbers, so when I read that, I wrote a program to test it. Sure enough, it’s true. You’ll only win about 1/3 of the time, but the payout massively makes up for that. I’ve personally only seen the situation twice, won once and lost once. But that winning payout netted me 50 bucks.
That used to be the case, but the law changed about ten years ago. The gambler no longer pays any tax, either on stake or on winnings. The bookies have to pay duty though, based on (stakes - payouts).
Really? I guess maybe that makes sense with the national lottery and Who Wants to be a Millionaire and the like.
I think it was down to industry pressure. So many bookies were moving offshore to places like Gibraltar and setting up telephone/internet operations that the government had to do something.