Introduction to pari-mutuel wagering
When you place a bet you are not betting against the track, but against everyone who is making that type of wager in a particular race. For example, if you bet a horse to win, your bet goes into the win pool. Based on how much is wagered on each horse to win, their odds will change accordingly.
This is called pari-mutuel wagering, from the French term meaning “amongst ourselves.” In this method of wagering, the public is betting against each other, not against the racetrack. In effect, the track has no interest in the results of a race. The track simply deducts a percentage from each dollar wagered for payment of purses, state directed equine programs, and expenses. The remainder of the pool (83% of the win, place, and show bets) is returned proportionately to the winners.
Win: You win if your horse finishes first.
Place: You win if your horse finishes first or second.
Show: You win if your horse finishes first, second, or third.