Very few people have a true understanding of how betting on horse racing works. The average person believes that the racetrack sets the odds, and has an interest in who wins or loses the race.
In reality, the odds are set by the gamblers. Every dollar bet goes into a pool, and that money is returned to the winning bettors. The racetrack takes a cut before the money is returned, and they make the same amount of money on the race whether a longshot wins, or a big favorite.
This betting system is called Parimutuel betting, and is vastly different than betting with a bookmaker or at a casino. If you bet your favorite football team to win, and place that bet with your bookie or at a local casino you are playing against the "house". If you win you are taking money from them, and if you lose you are giving it to them. In horse racing you are playing against every other person who bets on the same race as you. Horse racing is more similar to a game of poker than to sports betting in a casino. You have to outsmart your fellow betters, and if you are able to do a better job at picking winners than they are you will be taking money out of their pockets.
An average horse racing fan may make their selections based on what is called the "morning line". This is what you see in the track program or racing form, and the morning line is what the local track handicapper believes the odds will be on the horses in the race. When the race is actually run, the odds will usually be quite different than what the morning line suggested. The favorite may still end up being the favorite come post time, but his odds may be significantly higher or lower than his morning line price.
