How Kentucky Derby betting traditions have changed over time since 1875

Apr 25, 2023 J. Keeler Johnson/TwinSpires.com

• The first go-round of pari-mutuel betting didn't catch on.
• Bookmaking ruled the Churchill Downs betting scene until 1908.
• 1878 brought a $5 minimum bet, 1911 presented the now common $2 bet.
• 1980 unleashed simulcasting and exotic wagers.
• The Kentucky Derby Future Wager was unveiled in 1999.

Formal betting at Churchill Downs on the 1875 Kentucky Derby involved auction pools, in which bettors bid on the horse they wished to bet. Once each horse had been auctioned in this manner, all the winning bids were pooled together and the bettor who supported the winning horse won the whole pot.

In 1878, pari-mutuel betting was introduced at Churchill Downs. Developed in France in the 1860s, pari-mutuel wagering used machines to tally the number of dollars wagered by all bettors and determined mathematically appropriate payoffs based on how many bettors supported the winning horse. At the time, the minimum bet amount was $5 rather than $2; according to inflation calculators, $5 in 1878 is equivalent to a bit more than $150 in 2023.

Bookmaking, in which bettors wager with a bookmaker offering carefully curated odds on each horse, arrived at Churchill Downs in 1882 and soon took over. Both auction pools and pari-mutuel betting disappeared from the track after 1889. Even decreasing the minimum pari-mutuel bet amount to $2 (the equivalent of about $65 in 2023) failed to save the machines.

Bookmaking thus ruled the Churchill Downs betting scene until 1908, when the practice was outlawed in Louisville, home of Churchill Downs and the Kentucky Derby. But pari-mutuel betting remained legal, and the original pari-mutuel machines from 30 years prior were resurrected in time for the 1908 Kentucky Derby. Pari-mutuel betting has remained the standard at Churchill Downs ever since, though the minimum bet amount spent a few more years at $5 before dropping back to $2 in 1911.

When pari-mutuel betting returned to the Kentucky Derby, the betting menu was limited to win (pick the winner), place (pick a horse who finishes first or second), and show (pick a horse who finishes in the top three). Cashing big payoffs required betting big amounts, because high-paying exotic wagers like the exacta (pick the top two finishers), trifecta (pick the top three finishers), and superfecta (pick the top four finishers) weren’t available yet.

Simulcast wagering began as a one-off experiment in 1981 and resumed in 1984, allowing bettors at racetracks and locations other than Churchill Downs to wager into the giant Kentucky Derby betting pools at Churchill Downs.

This technological advance was followed by innovative wagering offerings. The exacta joined the Kentucky Derby betting menu in 1985, followed by the trifecta in 1994 and the superfecta in 1996.

Multi-race wagers also entered the fold as pari-mutuel betting expanded. The Pick 6 was introduced at Churchill Downs in July 1984, requiring bettors to pick the winners of six consecutive races. A Pick 6 ending with the Kentucky Derby quickly became a staple of the betting menu, alongside other popular options, like the Pick 3 and a special double wager requiring bettors to select the winners of both the Kentucky Derby and the Kentucky Oaks.

The shift to pari-mutuel betting was not without drawbacks. For many years, betting technology couldn’t support offering individual odds on every horse in a full Kentucky Derby field. Stablemates would be coupled together in the betting, and longshots were grouped into a “mutuel field.” Betting on one member of an entry was like betting on every member, and this tended to depress the odds. When Canonero II posted an almost inconceivable upset in the 1971 Kentucky Derby, he started at unremarkable 8-1 odds because he was grouped with five other horses in the mutuel field.

Coupled entries and the mutuel field were eliminated for the 2001 Kentucky Derby, allowing horseplayers to bet on any horse individually. The result has been an increase in high-priced Kentucky Derby winners; four of the five largest upsets in Kentucky Derby history have occurred since 2005.

The increased number of betting interests combined with the expansion of betting options to introduce the possibility of life-changing payoffs.

The highest $2 Kentucky Derby payoff in the pre-exotics era was the $184.90 generated when Donerail upset the 1911 Kentucky Derby at the still-standing record odds of 91-1. But in 2005, the $1 superfecta returned $864,253.50 after Giacomo (50-1), Closing Argument (71-1), Afleet Alex (9-2), and Don’t Get Mad (29-1) swept the top four finishing positions.

In 1999, the Kentucky Derby Future Wager pools were launched, offering bettors a chance to place pari-mutuel bets on Kentucky Derby contenders months in advance of the race. In 2008, the Super High 5 (select the top five finishers) joined the betting menu, and in 2022 the $1 Super High 5 returned $741,018.90 after 80-1 longshot Rich Strike crossed the finish line first.

The possibility of betting $1 to win $741,018.90, or $864,253.50, would have been impossible to fathom back in 1875. But thanks to a winding road of innovation and technological advancements, the Kentucky Derby is not only the most famous horse race in the United States, but also the greatest betting race.

All images are courtesy of the Kentucky Derby Museum and Churchill Downs. Please seek permission for usage.