Where is the flaw in this logic?

[DCopper04]

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Scenario 2: 1 favorite wins by 5 or more and the other favorite wins by 1, 2, 3, or 4. (if this occurs I win $11.32).

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I could be missing something here, but couldn't there be two possible outcomes here? Fav A wins by 5+, and Fav B wins by 1-4. OR Fav A wins by 1-4, and Fav B wins by 5+.

You may have realized this, I don't know, but it wasn't clear in your post. It seems to me that because there are two possible "sub-scenarios" within Scenario 2, then Scenario 2 should be twice as likely to occur as you have currently evaluated.

Same principle applies to Scenario 5; there are two possible occurences that would make that scenario work. Perhaps, then, it would be more accurate to say that 6 out of 8 scenarios would win you money.