How are the odds for horses calculated
How do bookmakers calculate the parimutuel placement odds (in horse races) that are displayed prior to the start of a race?
Parimutuel bundles all bets in a certain result and then divides that pool by the number of Betting units, which correspond to the winning result.
To simplify the calculation and simplify the customer experience, a betting unit is often equated to a currency unit (i.e. one unit is worth one dollar and one dollar buys one unit).
Since these systems are usually profitable, the board of directors or the company will use its share of the pool (the force ) remove.
Early bets can swing the odds of winning far, as they make up a larger proportion of the pool at this point (and we'll see why this matters later), so the company will often populate the pool with a crowd that is known to be is significantly larger than expected betting. This seed is usually taken into account by later removing an equivalent amount as part of vitality.
An example best shows how this system works. Our race will have three runners: A, B, C.
A is the favorite and bettor is placing # 50 on the win.
B is good, but less likely, so only # 40 will be placed.
After all, C is the inconsistent runner who can upset the others and place # 10 bets.
These bets are aggregated so that we get a total of # 100. The board takes its contribution, say 10%, and leaves # 90 in the pool to be paid out.
Now think about what happens for each result.
If A wins there is # 90 to be paid out over # 50 of the bets, with # 1.4 listed as the payout.
If B wins there are only # 40 bets, so 90/40 = # 2.25 as the payout.
If C wins there is only # 10 to win with, which pays 90/10 = # 9.
This calculation can be performed at any time from opening to closing and is usually updated every few seconds. This processing is done by a Totalizator carried out that often occurs dead abbreviated and then displayed on television or computer terminals or transmitted to a website.
Suppose we checked the bets earlier and they had an A: B: C ratio of 40: 30: 5. The payouts at this point would have been 1.69: 2.25: 13.5, which makes the favorite pay a little better would have and the outsider much longer than in the end. This, by the way, is the advent of fixed odds betting, where a bettor can take the odds at that precise point in time rather than waiting for completion to determine his payout.
Finally, note that this process does not need to know how many runners are in the race as the calculations are based on the units or how many places will be paid out because you can easily void certain payouts and allow the combination of several different categories of bets ( e.g. mixing the winnings and the place bets or the Quinella and Trifecta bets).
To calculate the parimutuel odds for a place, the result of the above calculation is divided by the number of places available, regardless of whether it is one or two or three.
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