What is Parimutuel Betting?
Parimutuel betting is a wagering system where all bets of the same type (e.g., win, place, show) are pooled together, and the payout odds are determined by how much money is wagered on each horse. Instead of betting against the house or a bookmaker, bettors effectively compete against one another, with the track (or online betting platform) taking a small percentage (known as the “takeout”) to cover expenses and purse money. This system is commonly used in horse racing across the United States and many other countries around the world.
How Does Parimutuel Betting Work?
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Collecting Bets
- All wagers for a particular bet type go into a shared pool (e.g., all win bets are pooled together).
- The total money in this pool becomes the amount to be paid out among the winners.
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Calculating Odds
- As bets are placed, the odds for each horse fluctuate based on how much money is bet on each contender.
- Horses receiving more money become “favorites,” offering smaller payouts if they win, while horses drawing less money are “longshots” with higher potential payouts.
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Final Odds
- Right before the race begins, the final odds are set based on the distribution of money in the pool.
- Bettors who backed the winning horse share the pool (minus the takeout), with each winner receiving a payout proportionate to their stake.
Why is Parimutuel Betting Important?
- Fair Competition: Since bettors wager against each other rather than a bookmaker, the system is seen as more equitable and transparent.
- Dynamic Odds: Real-time fluctuations in odds reflect the collective opinion and market activity of bettors, offering insights into popular choices and potential value plays.
- Regulated System: Tracks and regulatory bodies oversee parimutuel pools, ensuring payouts are properly calculated and distributed to winners.
Tips for Bettors in Parimutuel Markets
- Watch the Tote Board: Monitor changes in odds as the race approaches to identify shifts in public sentiment or potential value opportunities.
- Compare Pools: In some cases, different tracks or online platforms may have varying takeout rates, affecting potential payouts.
- Combine with Handicapping: Use speed figures, class analysis, and other handicapping tools in tandem with parimutuel information to make well-informed wagers.
- Manage Your Bankroll: Stick to a budget and avoid chasing losses, especially in dynamic betting environments where odds can change rapidly.
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