Racetracks employ a linemaker, also known as an odds maker, who is responsible for setting the starting odds for each horse in each race. Those odds are known as the morning line in the U.S., though some European betting operations use the term “SP” – for starting price.
Once betting begins, the amount bet on each horse changes the odds under a system known as pari-mutuel wagering.
The linemaker has one primary limitation: The line he or she produces should be “balanced.” That means that if you add up all the odds assigned to the horses expressed as a percentage – to 8-1=12 percent, for example – and account for the track takeout (usually around 16 percent) and “breakage,” a rounding down that occurs to determine payouts, the total should be around 120, give or take a few points. Not all linemakers follow this edict, but doing so produces a morning line that is at least mathematically sound – even if it doesn’t end up resembling the actual betting.
Another important thing to know about the morning line is that the linemaker is not supposed to express his or her opinion the way an individual horse player does. His job is to predict how the public will wager on a given race. So if he has heard whispers that a certain first-time starter has been working lights out in the morning, but a high-profile trainer and jockey are also in the race, he may well make the latter the favorite even though he may believe the other horse has a higher probability of winning.