We are having a Kentucky Derby Party. How to calculate payouts?

Question

The "win" pool is easy enough...divide the money equally among the winners...what about the place and show pools???...I used to know the formula, but i forgot it...there will be no take out. Appreciate help.

Answer 1

Place payout cannot be detemined until:

The winner has been determined;

Then the Place pool is split equally between the two top finishing horses , so the longer odds (hence least $ bet) of the two will get more money for the successful Place ticket than the shorter of the two odds among first and second finishers.  Example:  $1,000 in the Place pool, odds of top two finishers are 1 to 1 and 5 to 1; assume the 1 to 1 had $250 in its Place pool and the 5 to 1 only $75.  The thousand is split $500 each, so each $2 Place on the 1 to 1 would get back $4 in cluding the original $2 wagered (unlikely in the real world but this is a simple example for illustration purposes only); the 5 to1 $2 Place ticket would make $500/$75/$2 each, or $13.33 (including the original $2.00).

Show payouts cannot be figured until you know who Won and Placed:

For Show you split the Show pool $ equally among the top three finishers, again with the longest odds receiving more per successful Show ticket due to the lesser amounts being bet, and all of this following the formula above, only with three horses instead of two.

But in the case of a Show pool plunger causing a minus pool, for example with $20,000 in the Win pool, $10,000 in the Place pool and  $80,000 in the Show pool, the Show payout for all horses assuming the one with the high Show Pool total finishes in the money would be the minimum by law in the jurisdiction where the race is run - usually just $2.10, but $2.20 in the State of Kentucky and in Canada.  In this case there is less money in the pool than must be paid out by law, so the track has to make up the "minus" amount, hence the term minus pool.