In last year's Kentucky Derby we hit the Exacta paying $101, and the Triple paying $440 for each $2 bet. We won another Triple paying $46.20, an exacta returning $18, an additional Exacta paying $41.20, and a Daily Double paying $113.
In sports, the general rule is that exotic bets are strictly for suckers. There are only two very limited exceptions to that rule. Thus, the question arises, why are exotic bets acceptable in racing but not in team sports?
The answer lies in the differences between exotic bets in racing and exotic bets in team sports. In sports there are three main types of exotics - parlays, "if" bets, and teasers. Exotics such as "round robins" and "reverses" are simply combinations of individual parlays and "if" bets. Since there is nothing similar to a teaser in racing, I will discuss parlays and "if" bets only.
When making an "if" bet, the bettor designates a team as his first bet, and IF it wins he designates a second team on which the same amount is bet as was bet on the first team. For example, "the Jets if the Giants for $50" tells the bookmaker to place $50 plus vig ($55) on the Jets, and if the Jets win, to place $50 plus vig on the Giants. If the Jets lose, no bet is made on the Giants. When the first team loses, the bettor will lose $55 even if the second team wins. If the first team wins, but the second team loses, the bettor will win $50 on the first team, and lose $55 on the second team for a net loss of $5. If both teams win, the bettor wins $100.
The word "parlay" originated with horse racing. It describes a manner of betting in which one horse is bet and, if it wins, the entire amount of the payout is bet on another horse in a later race. A parlay can also be thought of as another type of "if" bet. You place a bet on Team X and IF Team X wins you place all the money on Team Y.
To allow players to parlay two games that are not sufficiently separated in time for the first to end before the second must be bet, the bookmakers devised what is known as a sports "parlay" bet in which the bookmaker runs the parlay for you. To parlay two games starting close in time, the bookmaker creates a fiction after the games are over that you have made a single bet on one game and then a double bet on the other. If one team wins and one team loses, the double bet is made on the loser. You can also think of it as the bookmaker placing the first and only bet on the team that lost. That alone should make it apparent what is wrong with parlay bets.
In baseball, the bet is made at the actual odds, with the higher odds game being deemed to be the first game bet. In other sports, the bookmaker has set odds for the payout which are usually worse than if ran your own parlay on two games separated in time. The most common parlay odds offered are 13-5. If you bet $100 you will win $260 for a payout of $360 including your $100 bet. If you ran your own parlay betting $100 on the first team, you would win $91 and get back $191, which you would then place on the second team. The payout on the second team after deducting the bookmaker fee called the "vig" would be $191 x 1.91 = $365. Subtracting the original $100 bet, the win is $265, compared to only $260 on the "parlay" bet you made with the book. The $5 difference in profit is equivalent to an extra 5% vig on the original $100 bet. That can add up over the course of a season, and even make the difference between winning and losing for the season.
Parlays are not just bad bets because they cost more, however. All parlays and "if" bets are bad bets because they add an element of luck that shouldn't be there. It is hard enough to win without adding additional head winds. In a parlay, whether you have a double bet or no bet on the second team depends on a factor that has nothing to do with the probability that the second team will win. The amount of the bet on the second team is dependent only on the irrelevant factor of the results of the first game.
The same is true of all "if" bets. Let's assume that the Jets are playing at 1:00 PM and the Giants are playing at 4:15 PM. You make a $110 bet on the Jets and IF the Jets win then $110 on the Giants. The Jets lose and the Giants win. When the Jets lose and the Giants win, you lose $110 on the Jets and nothing is bet on the winning Giants. You lose $110. Now let's assume that the Giants happened to be the first game that Sunday and, by sheer luck you bet $110 on the Giants and IF the Giants win then $110 on the Jets. When the Giants win you collect $100 and place a $110 bet on the losing Jets. You lose a net of $10 betting the exact same amount on the exact same two teams. In the first case, you lost 10 times more money based only on the luck of which team you put first in the bet. That element of luck will completely wipe out any advantage you can gain in sports betting by handicapping, and change your positive expectation into a negative one.
In racing, exotics are often considered to be poor bets because the tracks deduct a higher percentage from the exotic pools than from the straight bet pools. At Churchill Downs, where the Kentucky Derby will be run, the track takes 16% from the Win, Place and Show Pools, but 19% from the exotic pools. The odds on a racing exotic, however, are neither fixed nor artificially determined as they are in sports. The actual payout odds are determined by public betting and not by the track. Thus, despite the higher track deduction, the exotic can be a good bet. Think of it like betting $100 into a pot containing $1000 in a Poker game in which you are holding a full house. The 10-1 odds in the Pot are much higher than the probability that you will win with your full house, and you have a good bet. If the game host decides to cut 3% out of the pot and there is now just $967 for you to win in the pot ($1100 x .97 = 1067 minus the $100 you put in the pot = $967), you would still have favorable odds of 9.70 - 1 in the pot and your full house would still be a good bet.
Due to the fact that the exotic pools are separate from the win pool, the odds presented by a daily double can be, and often are, significantly higher than if you were to parlay the two horses on your own or bet the two horses straight. The odds can more than adequately compensate for the luck factor added by a bet on two different horses in two different races. The odds on some daily double bets are so high that you can profitably play multiple horses in each race, thereby increasing the probability that you will win and making some races playable that would not be if you needed to choose just one horse in the race.
You cannot parlay multiple teams in sports because each game is an independent event and therefore you do not increase your probability of winning by combining multiple teams. A single horse race is a single event in which the results for each horse are dependent on the results of all the others, thereby allowing you to increase your odds of winning by playing multiple horses. To illustrate, pretend there are twenty lotteries, each with a limit of 100 entries. If you buy one ticket in each of the twenty lotteries you will have a 1% chance of winning each lottery. If you buy 20 tickets in just one lottery, you will increase your odds of winning that lottery to 20%.
As with daily double bets, single race exotics can be the only realistic way to play a race in which you give two or three horses an equal chance of winning. The odds may not warrant a striaght win, place or show bet on all the horses. The odds in the exacta pool, however, may make it worthwhile to play all horses for first or second in all possible exacta combinations.
In summary, exotics make sense in racing because the odds are not fixed as they are in sports. Racing odds are determined by public betting and can represent huge overlays to straight betting.
At the Crowne Club, we recommend which exotic bets may be worth making in each race. If we recommend it, we count the win. To get on board for wins in the Kentucky Oaks and the Kentucky Derby like those we experienced last year, click here.
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