Show: This is a bet that the chosen horse will finish first, second, or third.

Daily Double: This is a bet on the first place position in two consecutive races, generally the first two of the day. Bettor must correctly pick both races to win.

Daily Triple/Pick Three: This is a bet on the first place position in three consecutive races.

Pick Six: This is a bet on the first place position of six consecutive races, generally the last six. If the event nobody wins the winning pool is split between those correctly picking five (or less if nobody picked five) and a carryover to the next pick six pool.

Exacta: This bet is on the first and second place horses in a given race in the correct order.

Quinella: This is bet is on the first and second place horse in a given race in any order.

Trifecta: This bet is on the first, second, and third places in a given race in the correct order.

Twin Trifecta: This is a pair of trifecta bets on two races. The winning pool is split between winners of the first trifecta and winners of both of them. After the first race winners of that trifecta should redeem their tickets for winnings from first half of the pool and a ticket for the second half.

Superfecta: This bet is on the first, second, third, and fourth places in a given race in the correct order.

Odd/Even: This is an uncommon bet based on the number of the winning horse.

The minimum bet is generally $2 on win, place, and show bets, and $1 on all others. The player may bet above the minimum but must all bets must be an even dollar amount (no change).

Placing a Bet
The tote board and the television monitors at the track will display the odds on a win bet for each horse on the next race, as well as each exacta combination. The odds will be refreshed every ten seconds or so to reflect the changes in betting activity. The odds are reported on a "to" basis. For example if horse 4 is paying 8:5 then a $2 wager would win $3.20, for a total return of $5.20. Unlike sports betting the bettor is not locked into the current odds when he makes a wager. Rather the odds keep changing until post time, at which moment all bets are locked out.
There is a specific way to make a wager at the betting window. You should state in order the track (if you don't specifiy it will be assumed you mean the home track), the race number, wager amount, type of wager, and horse number. There is little tolerance for chit chat or indecision at the betting window. Nobody standing behind you in line wants to risk getting locked out so make your bet as efficiently as possible.

This shows what winning $2 win, place, and show tickets pay. These amounts include the original $2 wager. For example a $2 place bet on horse 5 would pay $3.00 ($1.00 in winnings and $2.00 for the original wager). The tote board will also display what winning exotic bets pay. Sometimes in inquiry occurs after the end of a race resulting in a horse being disqualified. So wait a few minutes after a race is over before discarding a losing ticket because a disqualification of another horse may cause yours to move up. The one and only time I took my wife to the track she won a trifecta as the result of a horse being disqualified.

Payoff Calculation
On bets with only one way to win the remaining pool after the track’s cut is divided among the winners in proportion to the amount bet. The payoff per $2 bet is always rounded down to the next increment of 10 or 20 cents. This is called the "breakage", which is not an insignificant amount of extra money for the track.
For example if $1000 is bet in total on win bets, and $200 is bet on the winning horse, then the payoff for the winning tickets will be determined as follows. First the track collects it’s cut, we’ll say 17%, that leaves $830. Then the bets on the winner are deducted, that leaves $630 for paying winnings. The ratio of winnings to winning bets is $630/$200=3.15. This ratio is then applied to the minimum $2 bet: 3.15 * $2 = $6.30. The $6.30 is rounded down to $6.20, which is the final payoff per $2 bet. All winning bettors will be paid at this ratio, for example a $100 bet will win $100*(6.20/2.00) = $310. When collecting a winning wager the bettor will also receive their original wager back. In the above example a $2 winning ticket would get back $8.20 ($6.20 in winnings plus original $2.00 bet).

If the case of the place and show bets the math winning pool is divided equally into one pool for each winning horse. For example assume $1000 is bet on place bets and the first and second places horses are x and y. Further assume $100 is bet on x and $200 is bet on y. First the house takes their 17% cut leaving $830. Then winning bets of $300 are deducted leaving $530 to pay the winners. Half of the $530, $265, will be paid to the winners of each horse. In this case the ratio of winnings to winning bets on horse x will be $265/$100=2.65 and on horse y will be $265/$200=1.325. The unrounded winnings for $2 on horse x are 2.65 * $2 = $5.30, and on horse y are 1.325 * $2 = $2.65. These amounts are rounded down for winnings of $5.20 on x and $2.60 on y. Including the original wager winning $2 tickets on x receive $7.20 and on y receive $4.60.

Sometimes when a strong favorite wins, especially on a show bet, the winnings may round down to nothing. In this event the track must pay back a minimum of $2.10 per $2.00 bet, even if it results in a net loss for the track.

The Track Cut
As stated in the introduction the track cut varies depending on the type of wager.
1. 2 horse picks refers to daily doubles, quinellas, and exactas.

2. 3+ horse picks refers to trifectas, pick 6, and other longshots.

3. Takeout for odd/even bet is 5% at Churchill Downs.

4. Takeout for pick 3 is 25% at Great Lakes Downs.

5. Takeout for pick 3 is 26% at Philadelphia Park.

Taxation of Winnings
If a single ticket pays odds of 300 to 1 or more and totals more than $600 then the track will issue a W2G form, which will be reported to the IRS as gambling winnings. If a single ticket pays 300 to 1 or more and totals more than $5000 then automatic 28% withholding will take place.