You can bet to Win (that your horse will finish first), Place (first or second), or Show (first, second, or third).
Exotic Wagers, such as an Exacta, Quinella, Superfecta, or Daily Double are combinations of horse finishes and races. To win the Trifecta, for example, you must pick the first three finishers of a race in the exact order they come in. For the Exacta, you must pick the first two finishers, in order. You win the Daily Double if you pick the winners of two races in a row before the first of the races begins. The more unlikely and complex the bet, the greater the payout.
The wagering is known as "pari-mutuel," which means that you are not betting against the track, but instead against all the other players. Odds printed in the newspaper or racing form may change as the race draws near. Always keep your tickets until the races are ruled official, because horse or rider fouls may change the result.