Demystifying Pari-mutuel Betting
Pari-mutuel betting is a type of wagering that involves pooling bets from multiple people and then distributing the winnings based on each person's contribution. "pari-mutuel" comes from the French word for "equal shares."
In pari-mutuel betting, the bettor places their money with a bookmaker, who then takes it to an official who collects the bets made by all the bettors. The official then calculates how much money was placed on each horse or dog and then distributes it according to how much was placed on each animal.
This method works because there are no losers in pari-mutuel betting; everyone gets back what they put into it. If one person wins $1 million, but another loses $1 million, they each get back what they put into it: nothing.
Check out these three things about parimutuel betting:
1) Parimutuel betting is a horse race betting system that allows multiple bettors to wager against one another. In this way, the odds on a horse change as more money is placed on that horse. So if no one bets on a certain horse, its odds will be low, but if many people bet on that same horse, its odds will increase (and vice versa).
2) You can also use parimutuel wagering in other gambling games where multiple people are betting against each other—like poker or slot machines. If you've ever played blackjack at a casino or seen an episode of Deal or No Deal, those shows use parimutuel betting too.
3) The price of each ticket is determined by multiplying the wagered by the amount paid out if your number comes up. For example: if 1 person bets $10 and they win, they would get $20 ($10 x 2), but if 10 people bet $5, they would get $5 back.
How it Works
Pari-mutuel betting is a form in which the pooled sum of all bets determines the odds. The term "parimutuel" comes from the French for "among ourselves" and refers to the fact that each bettor can win only a proportion of the pool rather than an absolute sum.
The most common example of parimutuel betting is horse racing. When a bettor places a wager on a horse race, they must pay a fixed commission (called the takeout) to the operator of the betting pool. This commission is distributed among winning bettors in proportion to how much they have wagered. For example, if you placed 100 bets on one horse and it won at odds of 4/1 (which means that someone who bets $1 will get back $4), then each person would receive $4/100 = 20p for every pound they had wagered.
During parimutuel betting, money is pooled together from all bettors in an event. The total amount collected is then divided among all of the winning bets. This means that your payout depends on how much money was wagered on each outcome. For example, if there are 20 total bets placed on a particular horse, and 5 people bet on it to win at 5/1 odds, those 5 people will share a payout of $25 if their horse wins.
Each bettor receives their portion of the pool proportional to their level of confidence in each outcome—those who have placed bets on horses with higher odds will receive less than those who have placed bets with lower odds, but everyone still receives something!
Pari-mutual pools are usually operated by state lotteries or governments, who take a percentage cut from each bet placed to fund public projects such as infrastructure or education.
Type of Wagers at Pari-Mutuel Betting
The type of wagers available at pari-mutuel betting depends on the type of track you're at. The most common types in the United States are win, place, and show—and these are also the most common worldwide. You can find other types at certain tracks, such as exacta (which involves picking two horses to finish first and second), quinella (where you pick first and second horse), trifecta (which involves picking three horses to finish first through third), superfecta (which involves picking four horses to finish first through fourth), and exactor odds wagers.
Some tracks also offer exotic wagers like pick 3s, pick 4s, pick 5s, pick 6s, or super high-low wagers where players must pick the winner and a specific place or show order.
In addition to these popular types of pari-mutuel bets, bettors may also find some exotic options such as 50/50 pools, which involve picking half the field correctly, and those with unusual payouts like "all winners" or "all payoff."
History of Pari Mutuel Betting
Pari-mutuel betting is a type of gambling in which money is pooled and then divided among winners. The earliest forms of pari-mutuel betting date back to the 17th century, but in the late 19th century, pari-mutuel betting became popular as a way to gamble on horse races.
The history of pari-mutuel betting is fascinating and stretches back as far as the Roman Empire. The Romans used the first recorded pari-mutuel betting system to bet on chariot races. The bets were placed in a pot and then divided among the winners at the end of the race.
In 1867, Charles Tillinghast began operating an oval track in Rhode Island that allowed spectators to wager on horses as they raced around it. In 1869, Tillinghast opened another track in Kentucky, which had been built specifically for pari-mutuel betting on horse races. Both tracks became very popular and helped establish the practice of pari-mutuel betting as a common form of gambling among Americans.
In the early 20th century, pari-mutuel betting was introduced to Australia and South Africa, where it became popular with horse racing fans. In 1912, New Zealand legalized pari-mutuel betting on horses and dog races, which also led to its popularity there.
Today, pari-mutuel betting systems are used worldwide for horse racing and dog racing events. It is also common for casinos to offer these types of betting options as well.
