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You are not using the formula correctly: When betting 2 horses, each with an estimated win probability of 25%, each with tote odds of 3-1, then your group win probability is 25+25 = 50%, BUT your odds are 1-1, NOT 3-1: you bet two horses at $2.00 each for a total of $4.00 at risk, one of your horses wins and pays $8.00 (at 3-1), so your net win is $8.00-$4.00 = $4.00. Since your risk was $4.00 (betting 2 horses at $2.00 each) and your net win was $4.00 ($8.00-$4.00), the odds received were 1:1. Plugging into the formula, you get (1+1) x 0.5 = 1.0, or breakeven (ignoring statistical variance).
Bottom line, you must adjust BOTH the payout received (for the losing bet(s)) AND your amount bet (put at risk).
Richard
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