Pari-mutuel betting is the most common form of horse racing betting. The term actually originated in France, and literally translates “to wager amongst ourselves”. Unlike most other forms of betting, the odds are not fixed.
Rather than placing a bet against the race track, like one would with a bookie, horse racing bettors are wagering against each other. For this reason, the payouts on a single wager could range anywhere from less than the actual amount wagered, to astronomical amounts.
A horse racing track takes a minimal commission from all wagers as a fee for handling horse racing bets. It does not collect anything else when a bettor loses.
Interestingly enough, many areas of the world have criminalized all forms of gambling except for pari-mutuel wagering.
How Pari-Mutuel Horse Racing Betting Works
Simply put, all bets on a particular horse race are pooled together. The more bets that are made, the larger the pool becomes. All bettors who win their wagers will share in the overall prize pool.
The more common a bet is among those who bet on the race, the lower the payout for that wining bet will be. For example, 100 bettors place wagers on a specific horse race. 40 of them win their wagers. 20 of those winning wagers were all wagers on the same horse to win. That’s half of the overall bets, therefore they would receive a smaller portion of the overall prize pool.
Now let’s say two bettors won a trifecta bet, involving 3 horses to win, place and show in exact order. These two bettors would receive a much larger portion of the prize pool because 1) it was a more complicated bet to win, and 2) only two bettors won this particular wager, splitting a larger portion of the pool between themselves (as opposed to splitting a portion between 20 bettors).
For obvious reasons, the more complicated a bet is, the higher the payout will be. It is hard to say exactly how the pool will be divided, because it depends on the favoritism of one horse over another. When a favored horse wins, more bettors are likely to have wagered on it. When a long-shot wins, more bets are lost, and fewer bettors win. The less bettors that actually win, the higher the payouts become for each winner.
The odds and probable payouts are calculated incessantly up until the closing of bets on a race. Each time a new pari-mutuel horse racing bet is made, recalculation occurs. Considering bettors can place wagers over at the track, over the phone or from the internet, recalculations are generally a constant.
It is important to understand that the odds given at the time you purchase a horse racing betting slip may change, minimally or drastically, by the time the race actually begins. That’s why they are called “probable odds”, because at the moment that you made the wager, that was the expected payout.
Pari-Mutuel Horse Racing Betting Tip
Pari-mutuel horse racing betting is best done on a personal level; at the track, over the phone or via internet. Remember that the race track is going to take a small cut as commission. Pari-mutuel horse racing betting done through a live bookie will result in another cut being taken out.