Pari-Mutuel Betting

Tote Meeting Pool FundPari-mutuel betting, parimutuel betting or even pari-mutual betting (call if what you will, we’re talking about the same thing!) is a form of wagering wherein the stakes are placed in a pool. As opposed to fixed odds betting, where returns and odds are known in advance, with pari-mutuel betting systems, what winners get back depends on how much was wagered in total and how much on the winning selection in particular.

Here we will take a look at this form of wagering, explaining more about how it works. In addition we will look at where it is most popular and how it is most commonly used in the UK.

What Is Pari-Mutuel Betting?

It is said that the pari-mutuel betting system dates back to the mid-1800s and whilst it is not hugely popular in the UK it is the preferred method of placing a bet in a number of countries around the world. It can be used on a range of sports but is most commonly associated with horse racing and greyhound racing.

With pari-mutuel gambling, all the stakes for a given race are grouped together and put into a pool. Indeed it is sometimes known as pools betting, although it is completely separate from the football pools and football jackpot products (for example the popular Coral Football Jackpot game).

The bookmaker pays any relevant taxes, costs and their own profit margin before dividing the remaining funds between the winners in proportion to the size of the bettor’s stake. If we look at a very simple example we can see how the system works. Let us imagine a four-horse race in which a total of £150,000 is staked using pari-mutuel betting.

If the relevant taxes, fees, costs and bookmaker’s profit (sometimes called the juice, vigorish or house take) total £50,000, we are left with a total pool of £100,000. The initial stakes can be seen below, illustrating how much was bet on each of the four horses.

  • Horse 1 - £50,000
  • Horse 2 - £50,000
  • Horse 3 - £25,000
  • Horse 4 - £25,000
  • Total - £150,000

If we assume that Horse 1 wins the race then the total prize fund of £100,000 is shared between £50,000 of winning bettors. That means that for every £1 you had bet on the winner, you would get a total of £2 back (including your stake). Such a get would equate to fixed odds of evens, or 2.0 in decimal odds.

Estimated odds and returns are shown in the same format as decimal odds and reflect what you would be paid based on a stake of £1 (or whatever local currency you are betting in). So you may see a figure quoted of £10.46 for an outsider, meaning a £1 bet would receive £10.46 and a £10 bet would be paid £104.60.

Where Is Pari-Mutuel Betting Used?

Most bets in the UK are not placed on a pari-mutuel system and are either placed at a fixed odds bookmaker or a betting exchange such as Betfair. Pari-mutuel betting tends to be favoured in countries where betting is only available through state-controlled entities.

Pari-mutuel wagering is more or less the only type of sports betting allowed in France, where it is controlled by the government’s Paris Mutuel Urbain, or PMU. Similarly, until recently Australia was almost entirely pari-mutuel and other countries, including the USA and Canada tend to use such systems, certainly for their trackside betting for horse racing.

This link with governments is probably down to the fact that, in theory at least, the house cannot lose with a pari-mutuel system. Because the returns can never, by definition, be greater than the total stakes, the risk is entirely removed and the house, barring gross mismanagement, cannot lose.

Such a system of bookmaking is far more suited to a government-owned operation, whilst private enterprises prefer fixed odds as they have more flexibility to compete and try and maximise both turnover and profit.

Which Is Better, Fixed Odds or Pari-Mutuel?

Many people prefer fixed odds betting because they like the certainty of knowing in advance what they stand to win. Whilst pools-based systems often provide an indication of the current “odds”, based on the bets they have taken thus far, exact returns are not known until after the race.

There is great debate as to which system provides better odds. Most people would agree, however, that fixed odds companies will generally provide greater opportunities due to the increased competition. Fixed odds bookies and exchanges can, if they so choose, operate on incredibly low margins and thus provide better value.

Proponents of pari-mutuel betting, however, argue that because the operator can never lose, on average their prices are better. Because they never have any bad results to offset, so the argument goes, the long-term odds are more generous to punters.

In truth, market pressures generally mean there is little difference for UK punters, and there is no conclusive research to prove that one form of betting is better than the other. Whilst some may like the fact the exact winnings are not known until the result is in, for others this is a major negative against pari-mutuel betting.

Tote Betting

As said, in the UK pools betting is not especially widespread. However, there is one particular type of pari-mutuel bet that is hugely popular in the UK. Tote betting is yet another name for pari-mutuel betting and it takes its name from the machine that is used to calculate the pay outs on winning selections.

The very first totalisators were huge manual devices and in the 1860s they were housed in not insubstantial buildings. Calculating the “dividends” for the various outcomes was a slow process.

In the early years of the 20th century it is said that George Julius, described as an “English-born, New Zealand educated, Australian inventor, engineer and businessman” invented the first automated totalisators. There are other claimants to the not-very-vaunted crown of being the father of the totalisator but regardless of exactly who invented it, and when, this machine rapidly increased the speed at which the necessary calculations could be undertaken.

So, history lesson over, whilst tote betting is in many countries simply another name for the pari-mutuel system, in the UK is synonymous with the brand Tote. Tote, or Totesport, was bought by Betfred in 2011 but its origins go way back to 1928. Some may be interested to learn that none other than Sir Winston Churchill was arguably the creator of the Horserace Totalisator Board but, having said that the history lesson was over, we won’t go into that.

Pari-Mutuel Betting In The UK

The key point is that Totesport (and now Betfred) are the only company in the UK that can legally operate pari-mutuel betting. Rival firms offer a range of similar bets via syndication and imitation but technically speaking Totesport, and through ownership of them Betfred, are the only ones that can provide such bets directly.

There are a range of Tote bets available, including the most basic option, the Tote Win. Essentially this is a standard pari-mutuel bet on a horse to win, effectively the same as a standard win single at a fixed odds bookie (other than that the odds aren’t fixed). Whilst some people do use this option, especially at tracks, it is not this type of bet that attracts the average UK customer into the world of pari-mutuel betting. Other similar “equivalent-of” bets are also available as Tote bets, such as Tote Place or Tote Exacta, the latter of which is more or less identical to a straight forecast at a “normal” bookie.

However, none of these are anywhere near as popular or as commonly used as the Tote’s trump cards, the Scoop6 and Tote Jackpot. Tote offer a number of long odds options that can create huge jackpots and offer genuine value but it is these two in particular that provide the biggest pay outs.

We have a dedicated Totepool betting feature that explains more about these options but the two aforementioned products have the potential to deliver lottery-sized wins from small stakes. The Tote Jackpot requires punters to land the winners of the first six races at a designated track. The Scoop6 is very similar, with entrants needing to get six winners at six specific races spread out across a Saturday (and sometimes other big meetings).

The Scoop6 has a larger base stake and is also more prone to rollovers (where no player wins) as the six races are deliberately picked to include at least one tough handicap or large-field race. Whilst both can lead to substantial jackpots, it is undoubtedly the Scoop6 that captures the public attention and regularly has the largest prizes.

Both jackpots are operated on a pool system, with all losing stakes contributing to the pot for whoever can correctly call all six races. As the bet progresses the number of live tickets still involved are shown and as they whittle down the excitement is really cranked up.

For many in the UK the occasional flutter on a large rollover may be the only time they have any involvement with a pari-mutuel system. However, whether you love the concept of pools betting or not, at least you now – hopefully – understand it a little more than you did and can thus make an informed decision.