Parimutuel Betting
How pari-mutuel betting works and how it differs from fixed odds betting is the focus of this guide:
What Is Parimutuel Betting?
Pari-mutuel wagering works by creating a betting pool comprising all the money wagered in a horse race, where bettors are essentially betting against other gamblers who have staked money in the same race.
Winners are paid out proportionately, based on the amount of money wagered. All parimutuel bets, results, and calculations are often presented on the tote board at the racetrack.
Most US states allow pari-mutuel betting at licensed betting sites, at a racetrack, or at off-track betting facilities.
Parimutuel Betting Example
To better understand parimutuel betting, we provide an example and compare it to traditional fixed odds wagering to illustrate the differences.
The way pari-mutuel betting works is the house creates a pool of bets on potential winners on racing day, takes its cut (vigorish, which is usually between 10% and 20%), and then divides the remaining pool among those who made winning wagers.
With fixed odds betting, the operator locks in your bet on the given odds for a particular event at the time of betting and calculates your potential payout relevant to the amount of money wagered.
For example, say we have a six-horse race with the following wagers collected on each horse:
| 🏇Parimutuel Betting Example | |
|---|---|
| Horse No.1 | $200 |
| Horse No.2 | $300 |
| Horse No.3 | $100 |
| Horse No.4 | $400 |
| Horse No.5 | $100 |
| Horse No.6 | $200 |
The pool totals $1,300. If we deduct a 20% house vigorish ($260), that leaves $1,040 in the pari-mutuel betting pool. Depending on the winning outcome, those who wagered on the winning horse split the total amount of money.
Let’s say 8 players wagered $50 each on horse No.4 to win, which it does. Those 8 horseplayers will divide all pari-mutuel bets collected on that race (minus the operator’s takeout), relevant to their staked amount of money on the winner.
The horse’s odds are calculated by dividing the vigorish-minus pool by the total amount wagered on the horse.
Below, we will explain exactly how pari-mutuel odds work and the types of parimutuel bets you can place:
Parimutuel Bet Types
Regardless of whether you’re betting on the Triple Crown or other horse racing events, online or in-person, you will come across the same types of parimutuel horse racing bets, from straight bets to exotic wagers.
We compiled a list of the most common types of pari-mutuel bets with a short explanation of how each type of bet works:
- Win: a bet on a horse to win the race.
- Place: a bet on a horse to finish first or second.
- Show: a bet on a horse finishing in the top three places.
- Each way: combine two wagers into one, where you get paid at longer odds if your selection wins and at lower if it comes in second.
- Across the board: Three separate bets, each an equal amount, on your selection to win, place, and show. The operator pays out on all three wagers if your horse finishes first, on two if it comes in second, and only on one if it finishes third.
- Exacta: An exotic bet that pays out when you correctly predict which horse will finish first and which second.
- Quinella: An exotic wager that pays out when you pick the two horses that will win and place, regardless of the order in which they finish.
- Trifecta: Pick three horses to finish in the first three places in the correct order of finish.
- Superfecta: Pick the first four horses in the exact order.
- Running Double: Predict the winners of two consecutive races on the same track.
- Pick 3: Pick the winner of three consecutive races on the same track.
- Pick 6: Pick the winner of six consecutive races on the same track.
Parimutuel Betting Odds Explained
With fixed odds markets, you can calculate your potential winning bets with exact precision before the race starts. In contrast, with parimutuel betting, the odds are fluid up until the race starts, depending on how many horseplayers back a specific horse in a given race.
Other variables that affect the odds include the total amount of money staked on the winner and the total betting pool. Remember, the odds can shift until the race starts and are displayed on a tote board.
Below is an example demonstrating how parimutuel odds are calculated, using a 5-horse event where the operator has collected the following amounts for each horse:
| 🏇Parimutuel Betting Odds Explained | |
|---|---|
| Horse No.1 | $1,000 |
| Horse No.2 | $600 |
| Horse No.3 | $800 |
| Horse No.4 | $1,200 |
| Horse No.5 | $400 |
Horse No.4 is the favorite and ultimately wins the race. To calculate the odds, divide the total amount of money in the pari-mutuel betting pool by the total amount of money staked on the horse that wins.
In this case, the total pool comes to $4,000. Subtracting a 10% vigorish, the pool totals $3,600, which is split among the winners.
If we divide $3,600 (the remaining pool) by the amount wagered on the winner ($1,200), the odds for that horse come to 3.00 in decimal odds or +200 in American odds.
The final payouts are calculated according to the size of your wager, where for every $1 wagered, you collect $3. If, for example, four horseplayers wagered an average of $300 each on Horse No.4, you multiply $300 by 3, which gives you a payout of $900.
Parimutuel Betting Apps
Below is our list of legal horse racing betting apps that accept parimutuel bets:
Note: To download a horse racing betting app and place parimutuel bets, you have to be in a state that allows this form of betting.
Parimutuel Betting Tips & Strategies
The nature of horse racing allows for both parimutuel betting and fixed odds betting. The main difference is with parimutuel wagering, you can’t tell how much (or if) you will win until after the race commences or shortly before it starts. This makes implementing a parimutuel betting strategy more challenging.
- Pick low-takeout racebooks: The house take on the total betting pool is a major factor in the final distribution; pick a racebook with a low take.
- Wait out the odds: If you’re betting online, racebooks should provide a live odds update to show odds fluctuations in real time. Waiting till the last moment can be smart, allowing you to place bets based on the most recent information.
- Use a bonus: Claim a welcome bonus promotion targeting parimutuel markets to boost your bankroll. Horse racing betting bonuses can provide extra value ahead of major racing events.
- Avoid exotic bets: Exotic bets have potentially lucrative payouts, but in reality, they represent a long shot. Predicting correct outcomes on multiple races as part of the same ticket has extremely long odds of turning out.