Types of Sports Betting: Parimutuel Betting
There are many “types” of betting (spread betting, arbitrage betting, etc), but one of the more interesting is pari-mutuel betting. The thing that makes it interesting is it is a closed-type betting – nobody can win more than the total amount bet.
Pari-mutual wagering originated in France in the mid to late 1800’s by a perfume seller named Pierre Oller. The wagering itself focuses on a variety of sports based gambling on games that do not last for a very long time, and the athletes involved in the sport have ranked finishing times (First place, second place, third place, etc.) The types of games that utilize parimutuel betting fall along the lines of animal based racing (such as horse racing or greyhound racing), jai alai, and other similar sports.
So what is it that parimutuel betting does, exactly? In this sort of wagering the bettor is not going up against the house. A bettor is actually going up against other bettors. So the total money wagered is placed into a centralized pool or a pot (similar in theory to what one would find in a poker game.) All interested participants put their money in and are not able to collect until this pool is closed.
Due to this “everyone contributes” philosophy in this style of betting, the size of the pool can increase to impressive proportions (meaning up to several million dollars). So if a bettor wins the pool, there is a chance they can amass a significant amount of money. To keep things under control, pari-mutuel betting is usually state regulated, which allows this type of wagering to exist in places where gambling activity would otherwise be illegal. That’s why you see horse racing tracks all over the US.
Pari-mutuel betting is usually combined with fractional odds, which changes based on how much money is bet on each participant in the event. Ok, say there’s $100 in the pot, and 50 people bet on the #1 horse to win. The odds would be roughly 2-1 (meaning each person could win $2 for every $1 they bet.) But only 2 people bet on the #6 horse – that horse’s odds would be approximately 50-1… get it? We say “approximately”, because the house (in this case, the track) takes a cut.
Parimutuel betting is an interesting type of betting when it comes to placing ranked bets on sporting events. It is important to keep in mind that in a live game, anything can happen, so be sure to bet intelligently (remember, the odds are based on what other people bet, and nothing else. This means the skilled player can do well).
Good luck out there!
