Wagering on the outcome of horse races has been an integral part of the appeal of the sport since prehistory and today is the sole reason horse racing has survived as a major professional sport.

All betting at American tracks today is done under the pari-mutuel wagering system, which was developed by a Frenchman named Pierre Oller in the late 19th century. Under this system, a fixed percentage (14 percent-25 percent) of the total amount wagered is taken out for track operating expenses, racing purses, and state and local taxes. The remaining sum is divided by the number of individual wagers to determine the payoff, or return on each bet. The projected payoff, or "odds," are continuously calculated by the track's computers and posted on the track odds board during the betting period before each race. Odds of "2-1," for example, mean that the bettor will receive $2 profit for every $1 wagered if his or her horse wins.

At all tracks, bettors may wager on a horse to win (finish first), place (finish first or second), or show (finish first, second, or third). Other popular wagers are the daily double (picking the winners of two consecutive races), exactas (picking the first and second horses in order), quinellas (picking the first and second horses in either order), and the pick six (picking the winners of six consecutive races).