Betting on the Belmont? Avoid these basic mistakes

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As it has happened so often, a horse wins the first two legs of the Triple Crown, and comes into the Belmont with a huge amount of attention, a target on its back, and historic levels of fame if it can pull off the final victory.

With all that attention comes a lot of extra money being bet on the races. The amount of money bet on Saturday's Belmont Stakes might be around $200 million—multiple times higher than what the entire nation's worth of horse races get bet on a normal Saturday.

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This huge spike is basically the "dumb money"—people who make a wager on a Triple Crown race who otherwise don't know what they are doing. As a result, they do less-than-optimal things, allowing a smarter bettor to take advantage and make some coin.

Four basic bets to avoid

Kentucky Derby and Preakness Stakes winner American Pharaoh is bathed following his morning workout at Belmont Park in Elmont, New York June 4, 2015.
Shannon Stapleton | Reuters

CNBC checked in with Bill, Walter, and Tom Hessert—three brothers who founded Derby Games, a social-based horse race betting platform. Anybody with a computer can bet online or just download their iPhone app to make Belmont wagers. Their data on thousands of historical horse races have given them insight on what bets you should not make. These few pitfalls can help you avoid wasting your money on race day.

Gray horses: Don't bet on any gray horses because their odds are too out of whack. They stand out visually because of their color, so people are more likely to bet on them, "but they aren't any faster than the other horses," Bill Hessert said. Their data show that gray horses don't pay off in the long run.

Post position 7: Rookie bettors just like to say "put 10 bucks on seven"—regardless of what horse that is. The lucky number seven isn't lucky for a smart, rational bettor. The Hesserts advise you not to bet on any horse in the seventh post position, because the odds are too out of line for the quality of the horses.

The biggest long shot: The "dumb money" also likes to take on lottery-ticket type of risks, by putting money on the biggest long shot. Another way of describing the biggest long shot is "the worst horse in the race." Odds that might be shown as 50-1 for the worst horse could actually reflect the reality of it being 100-1 or 200-1 if the true odds were being shown. Stay away from this horse, you'll lose money.

The biggest favorite: Yes, this is the sad one. The biggest favorite in a race is also a bad trade—that's because everybody wants to make their easy money by following the usual media headlines.

A free option on American Pharoah

For those of you who really want to bet on American Pharoah no matter what, the Hesserts have a smart way. "Bet on him placing, not him winning," said Bill Hessert. (As a reminder, a "win" bet only pays off if the horse wins. A "place" bet pays off if the horse finishes first or second. And a "show" bet pays off if it finishes in the top three.)

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For extreme favorites at Triple Crown races, like American Pharoah, or California Chrome last year, or Big Brown in 2008, the place bet often pays at least as much as a win bet.

This is bizarre—a second place finish causing the same or higher payout than a win. It only works because so much money from irrational rookie bettors skews the odds. Everybody bets on Pharoah to win and then forgets about him as a possible second place finisher. This wouldn't happen in a race dominated by professional bettors, and it wouldn't even happen in a Triple Crown race with a diverse set of favorites. It's a rare opportunity, and it's something to watch for on Saturday.

NBC-TV coverage of the race begins at 2:30 p.m. ET Saturday.