When gambling on a contest with many possible outcomes, there are a variety of ways to make a bet. One type of wager is called an "each way" bet, which is popular in horse racing and other sports where there can be a dozen or more competitors in the field. This type of wager allows the bettor to select his favourite horse and win money if his selection finishes first or in the top few spots overall. The number of spots that pay, typically three, depends on the number of racers in the field. When an each way bet is placed, half the stake is placed on the racer to finish first, and the other half is placed on the racer to finish in the top few spots. A typical £1 each way bet would actually represent a £2 betting stake -- £1 on the horse to win and £1 on the horse to come in second or third.
Understand that if your horse wins, you are entitled to winnings on both halves of the betting stake. The equation reads: (Bet x Odds) + (Bet x 1/4 of Odds) + 1/2 Stake + 1/2 Stake = Each Way Winnings In this equation, the bet is the amount of money you placed on the racer. The odds are the probability that the racer will win, and the stake is the total amount of money you placed on the racer to either win or finish near the top (twice the bet).
Plug variables into the equation. Let's say you bet £100 on a horse (£200 betting stake), running at 3 to 1 odds, in an each way bet. The horse wins the race. The equation would read: (£100 x 3) + (£100 x .75) + 100 + 100 = Each Way Winnings.
Calculate the each way winnings. In this example, the answer would be: 300 + 75 + 100 + 100 = £575
Selection doesn't win
Understand that half your betting stake will be lost if your selection doesn't win. Set up the equation for each way winnings if your selection finishes in one of the top spots. The equation would read: (Bet x Odds x 0) + (Bet x 1/4 of Odds) + 1/2 Stake = Each Way Winnings In this equation, the bet is the amount of money you placed on the racer. The odds are the probability that the racer will win, and the stake is the total amount of money you placed on the racer to either win or finish near the top. You lose half the stake since your racer did not win. The loss is represented here by the 0 in the first part of the equation.
Plug in the variables. Using the same example as above, the equation would read: (£100 x 3 x 0) + (£100 x .75) + £100 = Each Way Winnings
Calculate the each way winnings for the racer that did not win, but placed highly. The result would be: 0 + 75 + 100 = £175 In this instance you would lose money, since your total betting stake was £200. Remember that the amount of money the bettor wins or loses fluctuates with the odds and the final position of the racer.