No Kentucky Derby party is complete without some sort of 'gambling' on the event. There is much that you can do without employing the services of a bookie, illegal in most states, and still capture the fun of betting on the horses. These ideas below have been used for years at Derby parties across the country, and, in many states, as long as no one makes a profit off of the wagering, they're not considered illegal gambling!

• Put all of the names of the horses in a hat and mix them up. Everyone pays a designated amount, say $1, to pull a name out of the hat. When the race is complete, the person that has the winning horse collects the pot. Or, offer a percentage of the pot for the first place horse, a smaller percentage to the second place horse, and an even smaller percentage to the third place horse.
  
• Create a sheet of paper or a poster board with a large block for each horse in the race. Have everyone at the party pay a designated amount to write their name in their favorite horse's box. They can do this for one or more horses and they can also enter their name under a horse more than once. More than one person is allowed to put their name under the same horse.
  At the end of the race, take all of the money divided by the number of bets on the winning horse and distribute that percentage of the pot to each person who chose the winning horse.
  
• Run your own betting window with a home pari-mutuel betting software program. With one of these programs, you can take win, place, show, exactas, and other exotic bets just like they are taken at the track. The software calculates the odds based on the bets placed at your party -- so you don't run the risk of losing money. With some products, you can set the software up to hold back a percentage for your favorite charity.
  One of the highest rated software products in this category is Backyard Bookie. You can purchase it for your party for as little as $19.95. Click here for more info.
  
• Run a horse 'auction'. Create a grid on a large piece of poster board with four columns as shown below. Label column 1 'Horse Name' and place each horse's name down the column, one in each row of the grid. Label column 2 as Win, column 3 as Place, and column 4 as Show.
  Start off the bidding for the 'show' (or third place) position with the first horse. Run the bidding just like an auctioneer would -- you know, 'Going once, going twice' and all that jazz. The highest bidder for the first horse has his or her name placed in the Show column on the first row, along with the amount bid (use whole dollars only). Collect the money from the highest bidder and then repeat the process for each horse down the column for the 'show' position. Once every horse in the show position has been bid on, total up the 'show' column.
  Repeat the above paragraph for the 'place' (or second place) position. Then repeat for the 'win' (or first place) position.
  After the race is run, the person who bought the horse in the 'win' column that actually wins the race wins the total amount bet in the 'win' column. The person who bought the horse in the 'place' column that actually came in second wins the total amount bet in the 'place' column. And, likewise, the person who bought the horse in the 'show' column that actually came in third wins the total amount in the show column.
  See the sample of the completed betting grid below:

Funny Cide finished first, Empire Maker second, and Peace Rules third. So, John wins the $459 win pot, Mary wins the $350 place pot, and Joe wins the $288 show pot.