Gambling Mathematic

Something that I learned recently and thought of sharing.

Have you ever watch a horse racing in turf club? Do you notice those number 7/3, 5/1, 6/1 appearing on the toteboard?

Do you know what it means and how you calculate your payoff?

It is actually very simple.

The number you saw are the win odds quoted on each horse. They will tell the profit you will get from each horse and the amount you have to bet to get it.

For example 5/1 simply means you will get a profit of $5 for every $1 you bet. Let's say you place a bet of $1000 on a horse with a win odd of 5/1, in order to calculate your profit, you can do a simultaneous equation if you understand basic mathematics.

5/1=?/1000

From the equation, you will get your profit of $5000 for the $1000 bet you placed.

The total cash you will receive is $6000( $5000(profit)+$1000( $ you wagered)).

The more interesting fact is how do they derive on the win odd 5/1, 6/2 and etc?

First you need to knw the total win pool and amount bet on that horse. The total pool is all the money bet on all the horses to win, but it is NOT the amount that will actually be paid out to the holders of winning tickets.

Secondly, you need to know the percentage for the track take.

Before the track pays off the winners they deduct the "take" which is generally between 14%-20% and is different for every state. This money goes to pay state and local taxes, purse money for the horsemen, expenses at the track, and the track's profit.

For example , the total win pool is $1100.

The track take is 15%, so we will deduct 15% from $1100, leaving us with only $935.

Thirdly, we need to deduct $935 with the amount bet on the horse.

Let's say the bet amount is $375, so the payoff will be $560 ($935-$375), so your win odd will be 560/375, simplified as 112/75.

If your saw your toteboard has the win odd of 5/1, if you reverse it it will give you 1/5.

1/5 means 1 is favourable event that you will win and 5 is the unfavourable event, means you will lose. It means we have a total chance of 6(1+5), in which only 1 out of 6 that the event will be favourable.

Using the formula p/1-p , 'p' is the probability in favor of the event. For example, an event with 1 in 5 of probability occuring, will give you 1/5=0.2(in favor of event, your 'p') so we have 0.2/1-0.2= 0.2/0.8= 1/4.

1 is the event will be favourable,4 is the event will be unfavourable. With a total chance of 5(1+4), there is 1 in 5 of probability that the event will turn out to be favourable.

Disclaimer: Gambling is an activity totally NOT endorsed and DISCOURAGED from participating. This post is NOT mean to encourage gambling. GAMBLING MIGHT RESULT IN SERIOUS LOSS OF WEALTH AND LEAD TO SUICIDE. CONCLUSION, BETTER DON'T GAMBLE...LOL

If you think I made any mistake in my explanation or you have something better to add on, do leave a comment. Thanks :P

Bet on me!