Pari-Mutuel Wagering & Off-Track Betting in Kentucky

Whether in Kentucky or elsewhere, betting on horse racing is a bit different than other types of gambling. Unlike the bets you make at casinos or sportsbooks, horse betting typically is conducted using pari-mutuel wagering. Understanding how pari-mutuel betting works is key to understanding how much you stand to win on a race.

Horse betting is especially popular in Kentucky, and the state is home to some of the most famous racetracks in the country including Keeneland, The Red Mile and Churchill Downs (where The Kentucky Derby is run). Those in Kentucky who bet on the Derby and other races at KY tracks can do so at the racing venues as well as at several off-track betting (OTB) locations in the state. You can also bet on horse races in Kentucky using horse betting sites that are themselves a bit like mobile OTBs.

On this page, we explain how pari-mutuel wagering works for horse races. We also cover off-track betting venues in Kentucky so you know where else in KY you can bet.

How pari-mutuel wagering works

The term “pari-mutuel” can be intimidating, as it suggests some sort of arcane system of determining payouts. However, it is actually quite simple to understand.

Imagine that everyone betting on a race is throwing their bets into a hat. Once betting closes and it is post time, no more money can go into the hat. The track or off-track betting location manages the hat and collects a small portion of the pot for itself as a service charge for its hat management. Then, after the race is run, it pays out the remaining portion of the money in the hat according to the odds established by how people have placed their bets.

When you gamble at a casino or sportsbook and you win, the money is paid out by the “house.” With parimutuel betting, the prize pool comes from you and all the other bettors. It’s a bit like a poker tournament wherein the amount of money people win is determined by how many people played in the tournament. Their entry fees (minus the poker room’s cut) make up the prize pool.

The amount of money you win is directly determined by how much others have bet as well. In fact, whenever anyone places a bet on a horse race, that wager affects the overall odds. These continue to change right up until post time.

In traditional sports betting, the odds are fixed, which means whatever the odds were when you placed your bet, that’s how you’ll be paid if you win. (The odds can change later, but that doesn’t matter to you and your wager.) However, with pari-mutuel wagering, you cannot “lock” in your payout odds at the time you make your wager. You are paid according to wherever the odds end up at post time when betting closes. If you bet on a horse to win and the odds were 6-to-1 when you placed the bet but they fell to 4-to-1 by post time, if you win you’ll be paid out at 4-to-1 odds.

Those post time odds reflect the portion of the prize pool that each horse has wagered upon it. As more money comes in on various horses, their payout odds drop, and the odds on the other horses go up. Wherever the odds end up, that determines what you stand to receive if you have placed a winning wager.

A mathematical example

Let’s say that there are six horses in a race. At post time, the horses had the following amounts bet on them by everyone placing wagers:

  • Horse 1 — $250
  • Horse 2 — $300
  • Horse 3 — $50
  • Horse 4 — $450
  • Horse 5 — $250
  • Horse 6 — $200

The total amount of money wagered on this race is $1,500. For the sake of argument, let’s assume that the track takes 10% of each pool as its profit. That means $150 comes out of the pool, leaving $1,350 for the bettors to win. The final odds (which determine payouts) are as follows:

  • Horse 1 — 1350 / 250 = 5.4-to-1
  • Horse 2 — 1350 / 300 = 4.5-to-1
  • Horse 3 — 1350 / 50 = 27-to-1
  • Horse 4 — 1350 / 450 = 3-to-1
  • Horse 5 — 1350 / 250 = 5.4-to-1
  • Horse 6 — 1350 / 200 = 6.75-to-1

Those odds tell you how much a winning $1 bet would receive. Horse 2, for example, has odds of 4.5-to-1, meaning a winning $1 bet on Horse 2 to win would earn $4.50.

Notice how with pari-mutuel wagering the horse that becomes the “favorite” (and has the lowest odds) is the one that the most money has been wagered on. In our example, that’s Horse 4, which had the most money bet on it ($450) and thus has the lowest odds (3-to-1).

Bear in mind that the payouts above are only for wagers on the horses to win. Bets for horses to place or show do not pay as much because they are easier to win.

We hope this example helps show how betting volume and disbursement affect the payouts in pari-mutuel betting. You are not just betting on your horse but also competing against other bettors. If more of them bet on other horses and your horse wins, you’ll win more (of their) money! Meanwhile, if more of them bet on your winning horse as well, you will all win less, as your wagering collectively drove down your horse’s odds and reduced the payout.

Types of pari-mutuel bets

The most common types of pari-mutuel wagers on horse races are bets on a single horse to win, place or show. But there are many, many more ways to bet on horses at Kentucky racetracks, off-track betting facilities or at online horse betting sites. Here is a quick overview of just some of the different types of horse wagers available. For a more comprehensive explanation of each, see our Beginner’s Guide to Horse Betting page.

For a quick rundown, these are the familiar “straight wagers” on individual horses in individual races:

  • Win — a bet on a horse to win the race
  • Place — a bet on a horse to finish either first or second
  • Show — a bet on a horse to finish either first, second or third

You can also place multiple straight wagers on the same horse in the same race. Furthermore, you can make bets on multiple horses or on a single horse in multiple races. These latter, more complicated bets are called “exotic wagers.” Popular examples of exotic wagers include:

  • Exacta — a wager on one horse to win and another to finish second (exact order)
  • Quinella — a wager on two horses to finish in the two top spots (either order)
  • Trifecta — a wager on three horses to finish in the top three spots (exact order)
  • Superfecta — a wager on four horses to finish in the top four spots (exact order)
  • Pick (Number) — e.g., a “Pick 3” wager is a bet on winners in three consecutive races

Then, you can add exotic modifiers to these wagers, such as:

  • Wheel — a modifier allowing you to bet on multiple horses to finish in the same position (if any do, you win)
  • Box — a modifier that removes the exact order requirement from exotic wagers
  • Key — a modifier that “keys” in one horse to win the race in your trifecta or superfecta bet

You might think of these exotic wagers (with or without modifiers) as being like parlays in sports betting since, generally speaking, you need multiple things to happen to win your bet. Keep in mind these exotic wagers may have long odds and big payouts, but they are typically much harder to win than the straight bets.

Kentucky off-track betting locations

There are more than a half-dozen off-track betting locations that operate in Kentucky. Most are ancillary operations at existing racetracks, and it’s not uncommon to move between the off-track betting parlor and the live racing taking place outside.

Off-track betting venues offer simulcast wagering on races around the United States and even from other countries. In other words, you place your bets in real time before the race goes off (wherever it is taking place), and you win or lose in the exact same manner as you would betting on a live race.

The nice thing about OTBs is that they are not subject to the seasonality of live racing. Most of them are open year-round and every day of the week, so you can go wager whenever you like.

Here are OTB locations in Kentucky:

  • Churchill Downs (Louisville)
  • Oak Grove Racing & Gaming (Oak Grove)
  • The Mint Gaming Hall Bowling Green (Bowling Green)
  • The Mint Gaming Hall Cumberland (Cumberland)
  • The Mint Gaming Hall at Kentucky Downs (Franklin)
  • Turfway Park (Florence)
  • The Red Mile (Lexington)

You will find the same types of wagers at Kentucky OTBs that you would for live races or online. However, OTBs may also offer bonuses on certain wagers that you cannot find elsewhere. Check your nearest OTB’s website or call to find out what specials might be running.

FAQ about pari-mutuel wagering and off-track betting in Kentucky

As described above, when you bet on sports like baseball, football or basketball, you are usually engaging in “fixed-odds betting.” That means whatever the odds are when you place your bet, that will determine your payout if you win. With pari-mutuel wagering, it doesn’t matter what the odds are when you place your bet. All that matters is what they are when betting closes and the race begins. Those are the odds that determine your payout if you are a winner. See above for more explanation of what makes pari-mutuel wagering unique.

In Kentucky, you’ll find all of the available types of horse race betting are offered as pari-mutuel wagering. There are examples of fixed-odds horse betting elsewhere, particularly in other countries. There have even been some U.S. tracks to start experimenting with fixed-odds betting, but pari-mutuel wagering is the national standard. It’s usually the only type of legal horse race betting.

Yes, off-track betting is legal in KY. There are more than a half-dozen legal off-track facilities active in Kentucky at this time.

Yes, in Kentucky you can bet on horses at online horse betting sites. Most of the top sites, including TVG and TwinSpires, are available to Kentuckians via their computers or mobile devices. Most recently, new sites like FanDuel Racing and DK Horse have launched in Kentucky as well, offering even more ways to bet on horses online.

Kentucky requires all horse bettors, regardless of the format, to be 18 years or older. That’s the same minimum age to play the Kentucky Lottery or bet on sports in KY. However, there may be some restrictions in place if the location wants to serve alcohol. In those venues, you may have to be 21 to enter, even though 18-year-olds could otherwise place bets.

No, you don’t have to be a resident to bet on horses in KY. You just need to be physically present in Kentucky.