Why is it that punters who back favourites continue to take a pretty hefty beating at the races?

It's worth really taking a close look at favourites, and betting on them. Firstly, we'll look at the difference between a bet on a horse at even money and one at 9-1.

The initial point to realise is that, at the bottom line, all punters are the same - if their horse loses, no matter what the price, they lose their money, everything. It's only when a horse wins that the percentages - the all-important percentages - come into force.

Example: With no percentages, if there is a pool of $10,000 and the favourite has had $5000 invested on him, the resulting payout is even money, a dividend of $1 for 50 cents.

Where the percentage take is 15 per cent, or higher, the following decimation of your dollars takes place: From the TAB pool of $ 10,000 the 15 percent government take leaves a pool of $8500, of which $5000 is on the favourite, so there is just $3500 left to 'pay him off'. This means the punter gets a dividend of 85 cents, so what really was to be an even money collect nosedives to odds of 7-10, a slice of 30 per cent snipped off.

Let's look at the same $10,000 pool when a horse has $1000 bet on him and he wins. His price, with $9000 to pay off $1000, would be 9-1 or exactly $5 for 50 cents on the TAB.

With the 15 per cent government take, the pool goes to $8500 with $1000 bet on the winner. This leaves $7500 with which to pay off the winners, so the equivalent odds are $7.50 to $1, or a dividend of $4.25 for 50 cents. The amount of cash sliced off the top is 75 cents, which equals 15 per cent.

No fractions are involved because the payoff figure is not a cent over. If a few dollars more had been bet on the TAB, and the payoff had been computed at $4.24 instead of $4.25, then the extra four cents would have been grabbed as fractions and the punter would get only $4.20 for 50 cents.

These examples show that the percentages against short-priced horses are tremendous and those against longer priced horses closer to reality.

In many cases, a few extra dollars in any pool can chop a favourite's payoff from 80 cents to 75 cents - only five cents but a huge enough percentage to drop him from a price of 3-5 to 1-2.1.1

The same four cents axed from a $5 dividend is insignificant percentage wise and the punter receiving $4.95 is almost as happy as a punter with a $5 note.

All he knows is that he has gambled and won the bet. Big punters take a totally different viewpoint.  If a big punter has placed a $200 bet, hoping to get $120 or more, he has to settle for $100, and this doesn't make him happy. The fractions have robbed him of $20.

Governments make millions of dollars out of the fractions each year.

By Statsman