How does Parimutuel Wagering Work?

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Horse Racing Betting Sheets on a Table
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“…the odds change based on how much money is bet on each horse. If more people bet on a particular horse, the odds will be lower because the payout will be split among more people. If fewer people bet on a particular horse, the odds will be higher because the payout will be split among fewer people.

Parimutuel Wagering

Parimutuel wagering is a type of betting that is used in horse racing, dog racing, and other sporting events. It’s a little bit different from other types of betting, like betting with a bookie, because the odds change based on how much money is bet on each horse.

Here’s how parimutuel wagering works:

1. Bettors Place their Bets

Before a race begins, people who want to bet on the outcome of the race can go to a betting window or kiosk and place their bets. They can bet on a particular horse to win, place (come in second), or show (come in third).

2. Money is Collected

When people place their bets, the money they bet is collected and put into a pool. This pool of money is called the “parimutuel pool.”

3. The Track Takes its Cut

Before the race begins, a percentage of the money in the parimutuel pool is taken out to cover the cost of running the race, like paying the jockeys and trainers. This percentage is called the “takeout.”

4. Odds are Calculated

Once the takeout is taken out of the parimutuel pool, the remaining money is divided among the bettors who picked the winning horse. The odds for each horse are calculated based on how much money is bet on them.

5. Race Begins

Once all the bets are placed and the odds are calculated, the race begins!

6. Winners are Announced

After the race is over, the winner is announced, and the money in the parimutuel pool is divided among the bettors who picked the winning horse.

So, how does this all work? Let’s take a look at an example:

Say there’s a horse race with six horses, and a total of $1,000 is bet on the race. The takeout is 15%, which means $150 is taken out of the parimutuel pool to cover the cost of running the race.

The remaining $850 is divided among the bettors who picked the winning horse. Let’s say that $200 was bet on Horse A to win, $300 was bet on Horse B to win, and $350 was bet on Horse C to win.

Based on these bets, the odds for each horse are calculated. Horse A has 2.25-to-1 odds, Horse B has 1.83-to-1 odds, and Horse C has 1.43-to-1 odds.

If Horse A wins, the people who bet on Horse A to win will split the remaining $850, which means they’ll get $765 back (their original bet plus their winnings). If Horse B wins, the people who bet on Horse B to win will split the $850, which means they’ll get $1,141 back. And if Horse C wins, the people who bet on Horse C to win will split the $850, which means they’ll get $1,213 back.

As you can see, the odds change based on how much money is bet on each horse. If more people bet on a particular horse, the odds will be lower because the payout will be split among more people. If fewer people bet on a particular horse, the odds will be higher because the payout will be split among fewer people.

Parimutuel wagering is a fun and exciting way to bet on horse racing and other sporting events. It’s important to remember that there’s no surefire way to win, and betting should always be done responsibly.

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