Horse racing is one of the most popular sports when it comes to betting. Horse racing is also one of the oldest sports in the world with a rich tradition of hundreds of years.
There are a couple of reasons why horse racing betting is popular. First of all, horse racing provides competitive odds where bettors can earn significant profits for lower wagers. Additionally, horse racing betting makes the sport even more exciting to watch.
And last but not least, there is a huge variety of bets and betting systems that you can make which helps you diversify your betting strategy.
So, what does pari-mutuel betting mean in horse racing and how does it work?
What is Pari-Mutuel Betting
Pari-Mutuel betting is a rather unique betting system that is completely different from standard betting where you bet against the house. Instead of betting against the bookmaker, you are placing your wagers against other bettors who have placed wagers on the same event.
Pari-Mutuel betting is very popular in horse racing, and it is a great way to spice things up and open up the door for making more profits.
With Pari-Mutuel Betting, all wagers go into a pool, and after the event, the pool is shared equally between all the winning bets. With that said, it is important to mention that portion of the pool goes to the “house” to compensate for their services.
How Does Pari-Mutuel Betting Work
Even though Pari-Mutuel Betting is quite straightforward, it still requires getting used to since there are different principles to take into account. The process of placing a Pari-Mutuel bet works the same as traditional betting, but you don’t have fixed odds when you put your money down.
Instead, you’ll see “portable odds” that are based on the breakdown of the betting pool for any given match. It is important to understand that the odds can change at any time depending on how people place their bets.
Every bet that is made on a pari-mutuel wager betting market goes into one specific pool for that market. When the event finishes, the total amount of wagers is added up and the house takes a small commission of the top, then divides the rest among the bettors that have a winning bet. The payout depends on how much money every person wagered.
Pari-Mutuel Betting in Horse Racing
Horse racing is a sport where pari-mutuel betting started a long time ago, and at the beginning, it was primarily used to offer the standard types of wagers –Win, Place, and Show. However, as the demand for higher payouts has risen, the so-called “Exotic Bets” emerged.
The Pari-Mutuel wagering system in horse racing works like any other sport, where people are betting among themselves. However, since some of the organizations that stand behind specific races allow Pari-Mutuel betting, the process is a bit different.
With Pari-Mutuel horse racing betting, all the best for a particular race worldwide are gathered in a separate electronic pool. In this case, the racetrack where the event takes place acts as a broker for the transaction and takes a fixed commission (10-30%) out of the total prize pool. In some cases, the takeout that is retained by the track is used for the “purse money” that horses compete.
The exact payout is difficult to calculate just because the size of the payout is determined at the conclusion of each race, as well as how the horses are placed.
For example, if 90% of people place a bet on the same horse, only 10% of the cash will be distributed to the winners of the bet. The same goes if the underdog wins the race where the minority of people place a bet on the horse then the total amount of money placed on the favorite will act as a payout for all the people that made the right prediction.
