Despite the fact that I know nothing about the horses racing in the 2016 Kentucky Derby, I do know Nyquist is favored to win. In fact, his odds are 3-to-1. But I also don’t know what that means. I actually know nothing about sports betting. But I do know these odds are supposed to be good. But, if I hadn’t read “Nyquist is expected to win” I still wouldn’t know exactly how good they are. So how exactly do the Kentucky Derby odds work, and what does 3-to-1 — or 5-to-1 or 400-to-1 — mean?
First things first: in order to understand how odds work, one must first understand what type of odds they are looking at — American odds, fractional odds, or decimal odds. (Yes, there are three completely different systems!) In the case of the Kentucky Derby, fractional odds are being used. How do I know this? Well, fractional odds can easily be identified by their use of a dash or a backslash, according to Online Gambling. (See 5/1, 5-1, or 5-to-1.) But what do the numbers mean, and how are these numbers determined?
The good news is the former question is actually pretty easy to answer, and I will use Nyquist as an example. Nyquist has 3-to-1 odds. That means that if you bet $1 on Nyquist, “you will get your dollar back plus three more,” according to SB Nation. This means a $10 bet would net a $30 profit, and if you bet $100 you will win $300, and so on and so forth. Pretty straightforward, right? Well, sort of. Things get trickier when the odds aren’t "something-to-1." For example, when odds are 9-to-5 or 3-to-2. And, I’ll be honest, after reading — and reading — I still don’t understand it all. However, “noobs” like me are in luck: There are numerous betting tables online that explain the payout process. (Phew!)
However, the answer to the latter — how odds are determined — is a bit more complex. Odds are nothing more than the representation of probability, according to Pinnacle Sports. This means these numbers usually denote the likelihood of a certain outcome occurring. However, in the case of horse racing, odds actually have less to do with probability and more to do with money, according to Doc's Sports Service:
The single biggest key to horse racing odds are that they are determined by what is called a pari-mutuel system, which is just a fancy French term for mutual betting. That means that the odds are determined by the bettors...[t]hough they are usually fairly accurate they are just a guide and they ultimately have no impact on the final odds on a horse. Instead, the odds are set by the amount of money that is bet on each horse relative to how much is bet on each other horse.
In short, the more money the public bets on a horse, the lower the odds will be.
As for me, I'll stick to betting on consistent things, like will my daughter eat her dinner tonight. (And for those wondering, the answer is no, probably not.)