One of the most popular ways to bet on horses is to bet across the board, in other words, win, place, and show. The popularity of this bet is not based on profitability, but on ease of placing it and the fear factor. One thing that gamblers hate to do is to feel that they had the right idea about a proposition, but still lost money.
No one wants to bet on a horse to win and see it get nosed out at the wire and pay a good price in the place position. The same is true of a show bet. It really stings to bet a horse to win, or win and place, and then have it just manage to show, but to pay good. You get to thinking to yourself, “Why and I bothering to play win bets, which are so hard to hit, when I could be making show bets and cashing good tickets?”
Why indeed. How about this for a reason? Breakage and the track take. Every time you divide a bet between the ticket holders on that bet, breakage eats up some of their profit. Sine there is only one group of punters that hit the win ticket, it only gets hit with breakage once. The place price gets divided between those who played win and place and place only. The show price appears on the board three times and is divided that way.
Breakage makes show and place betting a bad financial proposition. You will also find people more likely to bet long shots in those positions, so the horse may even get bet down below a reasonable price. There is, of course, one caveat.
Dr. William Ziemba showed us all that place and show bets could be profitable when they were underbet compared to the odds of the runner. His formulas, based on statistics for thousands of runners, held up and Dr. Z bettors did make a profit.
The problem was that there were soon many Dr. Z bettors. while you hustled up to the window to make that last minute bet on a good place or show prospect, you were joined by many others doing the same thing. After the race started and the odds did their final flip, you found the prices drastically reduced on your bets.
If you can find a situation where there are not many people trying to hit those Dr. Z bets, then you can still make money with them. But blindly playing win, place, and show and trying to hit something is a losing proposition. The best bet is still a win bet on a runner that offers good value based on good solid handicapping principles.