There are plenty of books on that subject and it is something I know almost nothing about. So if you need to bone up on the basics of racetrack betting you are in the right place. The racetrack operates on the same principle as an insurance company. In an insurance situation the bettors are betting on death of some kind of casualty and at the track the bettors are betting on horses. At the track there are various types of bets available.
All money bet on a specific kind of wager is pooled together.
Once the betting is closed the track will deduct their share to cover taxes, dues to the Racing Association, overhead expenses, purse money, and the Breeders Fund. The remainder of the pool will be divided among the winning bettors. This is a bet that the chosen horse will finish first or second. Bettor must correctly pick both races to win. This is a bet on the first place position of six consecutive races, generally the last six.