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Parimutuel betting

Parimutuel betting or pool betting is a betting system in which all bets of a particular type are placed together in a pool; taxes and the "house-take" or "vigorish" are deducted, and payoff odds are calculated by sharing the pool among all winning bets. In some countries it is known as the tote after the totalisator, which calculates and displays bets already made.

The parimutuel system is used in gambling on horse racing, greyhound racing, jai alai, and other sporting events of relatively short duration in which participants finish in a ranked order. A modified parimutuel system is also used in some lottery games.

Definition[edit]

Parimutuel betting differs from fixed-odds betting in that the final payout is not determined until the pool is closed – in fixed-odds betting, the payout is agreed at the time the bet is sold.


Parimutuel gambling is frequently state-regulated, and offered in many places where gambling is otherwise illegal. Parimutuel gambling is often also offered at "off track" facilities, where players may bet on the events without actually being present to observe them in person.

History[edit]

The parimutuel system was invented by French entrepreneur and showman[5] Catalan impresario Joseph Oller in 1867.[6]


The large amount of calculation involved in this system led to the invention of a specialized mechanical calculating machine known as a totalisator, "automatic totalisator" or "tote board", invented by the Australian engineer George Alfred Julius. The first was installed at Ellerslie Racecourse, Auckland, New Zealand, in 1913, and they came into widespread use at race courses throughout the world. The U.S. introduction was in 1927, which led to the opening of the suburban Arlington Racetrack in Arlington Park, near Chicago, and Sportsman's Park in Cicero, Illinois, in 1932.[7]

Strategy and comparison with independent bookmakers[edit]

Unlike many forms of casino gambling, in parimutuel betting the gambler bets against other gamblers, not the house, which necessarily implies that the bank cannot be broken. The science of predicting the outcome of a race is called handicapping.


Independent off-track bookmakers typically have a smaller take and thus offer better payoffs, but they are illegal in some countries. However, the introduction of Internet gambling led to "rebate shops". These off-shore betting shops promise to return some percentage of every bet made to the bettor. They may reduce their take from 15–18% to as little as 1–2%, while still generating a profit by operating with minimal overhead.

Win: to succeed the bettor must pick the horse that wins the race.

Place: the bettor must pick a horse that finishes either first or second.

Show: the bettor must pick a horse that finishes first, second or third.

Across the board: the bettor places three separate bets to win, place or show.

Exacta, perfecta, or exactor: the bettor must pick the two horses that finish first and second, in the exact order.

or triactor: the bettor must pick the three horses that finish first, second, and third, in the exact order.

Trifecta

: the bettor must pick the four horses that finish first, second, third and fourth, in the exact order.[8]

Superfecta

Box: a box can be placed around exotic betting types such as exacta, trifecta or superfecta bets. This places a bet for all of the numbers in the box. A trifecta box with three numbers has six possible permutations (for each of the three horses in the "box" that can finish first, there are two possibilities for which will finish second: 3 × 2) and costs six times the betting base amount. A trifecta box with five numbers has 60 possible permutations and costs 60 times the betting base amount (5 × 4 × 3). In France, a "box" gives only the ordered permutations going along an ordered list of numbers such that a trifecta box with six numbers would cost 20 times the base amount. For a single race, a wheel bet picks the winning horse, paired with any of the remaining horses in the field to finish second. For example, a wheel bet of "3-all" in a given race picks the #3 horse to win, and any other horse in the field to finish second (each permutation being a single bet - thus, in this example, if there are 5 horses in the field, a "3-all wheel" would 4 bets).

permutations

Quinella or Quiniela: the bettor must pick the two horses that finish first and second. Final order does not matter. This bet is technically different than an exacta box, which is two bets total, one for each possible finishing permutation. Each horse's odds will produce two different payouts, commonly occurring when a favorite is paired with a longshot. A winning quinella can pay more than a winning exacta box, which can be determined by summing the quotients of the quinella payout and dividing by each exacta permutation payout—the quinella bet has a superior payout if the sum is greater than one.[10]

[a]

Any2 or Duet: The bettor must pick the two horses who will place first, second or third but can finish in any order. This could be thought of as a double horse show key (see below).

Hi 5 or Super 5: The bettor must pick five horses finishing in the exact order. Typically does not occur unless there are 8 or more horses in a race.

Advance-deposit wagering

Arbitrage betting

Betting exchange

Betting pool

Bookmaker

Calcutta auction

Prediction market

Spread betting

Sports betting systems

Tote Ireland