An honest guide to each-way betting
There are few bits of racing terminology more persistently misunderstood than the each-way bet. To the point that quite experienced punters, asked to explain what their £10 each-way at 12/1 actually costs them and what it might return, will often produce an answer that is wrong by a meaningful amount. This is a shame, because the bet itself is perfectly sensible — it simply requires the user to keep two separate calculations in view at once, which our instincts do not make easy.
The first thing to understand, if nothing else lodges, is this. An each-way bet is not one bet at reduced odds. It is two bets of equal stake: one bet on the horse to win, and one bet on the horse to be placed. A £10 each-way is therefore £20 off the card, not £10. Every subsequent calculation follows from that fact, and getting it wrong produces cascading errors that tend to leave punters unhappily surprised at the settlement desk.
How the two halves settle
The win half of the bet is simple: it is a straight win bet at the advertised price. If the horse wins, it pays out exactly as any other win bet at those odds would. If the horse does not win — whether it comes second, falls, or is tailed off in last — that half of the stake is lost.
The place half settles at a fraction of the advertised odds. The fraction depends on the race, and this is where the majority of the mystification comes from. In standard Flat handicaps with sixteen or more runners, the place portion pays at one-quarter of the win odds for any horse finishing in the top four. In non-handicap Flat races with eight or more runners, it is one-fifth of the odds for the first three places. In small-field Flat races (five, six or seven runners), only the top two places pay, and usually at a quarter of the odds. In races with four or fewer runners, most bookmakers refuse each-way bets altogether, because the book is simply too tight for the maths to work.
Jumps races follow similar principles but with their own quirks. Novice and conditions hurdles or chases typically pay three places at a fifth. Big-field handicap chases run to four or even five places, sometimes at a quarter, sometimes at a fifth — the firm's own board is the authoritative source. Festival handicaps in particular are worth checking before you bet; the difference between four places at 1/4 and three at 1/5 on a 20/1 shot in a Cheltenham novice handicap is very substantial indeed.
The 12/1 example worked through
Back to the original example. £10 each-way on a 12/1 shot in a sixteen-runner Flat handicap, standard terms 4 places at 1/4 odds.
Total stake: £20 (£10 to win, £10 to place).
If the horse wins: the win half returns £130 (10 × 12, plus the £10 stake); the place half returns £40 (10 × 3, plus the £10 stake — the place fraction turns 12/1 into 3/1). Total return: £170. Profit: £150.
If the horse finishes second, third or fourth: the win half is lost (£10 down); the place half returns £40. Total return: £40. Net profit: £20, against a total outlay of £20.
If the horse is unplaced: both halves lose. Total loss: £20.
The pattern is worth absorbing. A placed finish at 12/1 roughly doubles your money; a winner at the same price returns seventeen times the £10 put on the win leg alone. The each-way structure smooths the variance of the bet considerably at the cost of a lower maximum upside per pound staked.
When each-way is genuinely worth having
There is a neat rule that deserves to be more widely known. The place leg of an each-way bet only has a positive expected return if the price, multiplied by the place fraction, produces a multiplier greater than one. Put more simply: at 1/4 place terms, you need the horse priced at greater than 4/1 for the place leg to be profitable in isolation. At 1/5 terms, greater than 9/2. At 1/3 terms, greater than 3/1.
Below those thresholds, backing each-way means you are paying an expected loss on the place half even when the horse finishes where you hoped. A 7/2 shot at 1/4 place terms, for instance, pays at a place ratio of less than 1.0 (7/2 divided by 4 is 7/8, which is odds-on). You are, in that narrow sense, losing money on the place portion.
This is not, it must be said, a prohibition on each-way betting below the threshold. There are plenty of times when the insurance element is worth paying for — backing a fancied 3/1 favourite each-way in a sixteen-runner handicap may be a perfectly intelligent thing to do even if the place fraction itself is below break-even, because the reduced variance lets you bet bigger in aggregate without blowing up the bank. But it is worth knowing the arithmetic rather than assuming, as too many people do, that "each-way is always the safer option". It is not always safer. Sometimes it is just more expensive.
Places and dead heats
One complication that crops up often enough to be worth noting. When two or more horses dead-heat for a placed position — two sharing third, for instance, in a three-place each-way — the place portion of your bet is subject to the dead-heat rule. Your stake is treated proportionally: if two horses dead-heat for a single contested place, half your place-stake wins at full odds, the other half is lost.
So a £10 each-way at 10/1 whose horse dead-heats with one other for a single place (meaning the third place in a three-place each-way, with the other horses in the heat already higher up) would settle: win half lost (£10), place half adjusted to £5 winning at 10/1 divided by 4, returning £17.50 (place profit £7.50 on a £5 half-stake, plus the full £10 place stake returned). Net loss £2.50.
The dead-heat calculator handles this cleanly if the arithmetic gets away from you.
Extra places and the Saturday specials
On Saturdays and at the Festival meetings, firms commonly offer "extra places" as a customer acquisition wheeze — paying five places instead of four, or six instead of five, on selected handicaps. These are worth paying attention to. An extra place at 1/4 odds on a 20/1 shot turns a winning place position into a £60 return against a £20 outlay, which is a very different proposition from the same horse running fourth on standard terms and losing.
Shop around. The extra-place race is usually a televised handicap, often the Saturday feature. A horse you fancy to place at 25/1, with one firm paying four places at 1/4 and another paying five places at 1/5, is sometimes a better bet with the five-place firm even though the place fraction is worse, because of the added finishing position. Do the arithmetic. The each-way calculator makes that comparison straightforward.
What each-way is not
Finally, a note on what each-way is emphatically not. It is not a way to turn a losing bet into a winner. It is not a hedge in the proper financial sense. And it is not, fundamentally, a cheaper way to back a horse — it costs twice as much. What it is, is a bet with materially different variance and risk-reward properties from a straight win bet. Understood and used accordingly, it is a perfectly useful part of the punter's toolkit. Confused with "a safer version of a win bet", it tends to quietly drain bankrolls while its users feel they are being prudent.
Which, when you think about it, is approximately the most common pattern in betting generally.