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The parimutuel system is used in Gambling on Horse Racing , Greyhound Racing , Jai Alai , and all Sporting Event s of relatively short duration in which participants finish in a ranked order. A modified parimutuel system is also used in some Lottery games. 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. 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. EXAMPLE OF PARIMUTUEL BETTING Consider a hypothetical event which has 8 possible outcomes, in a country using a Decimal Currency such as Dollar s . Each outcome has a certain amount of money wagered: Outcome 1 – $30.00 Outcome 2 – $70.00 Outcome 3 – $12.00 Outcome 4 – $55.00 Outcome 5 – $110.00 Outcome 6 – $47.00 Outcome 7 – $150.00 Outcome 8 – $40.00
Often at certain times prior to the event, betting agencies will provide ''approximates'' for what should be paid out for a given outcome should no more bets be accepted at the current time. Using the example above, an approximates table using the same commission rate in decimal odds would be: Outcome 1 – $14.69 Outcome 2 – $6.30 Outcome 3 – $36.73 Outcome 4 – $8.00 Outcome 5 – $4.00 Outcome 6 – $9.38 Outcome 7 – $2.94 Outcome 8 – $11.02 In real-life examples such as Horse Racing , the pool size often extends into millions of dollars with many different types of outcomes (winning horses) and complex commission calculations. Sometimes the amounts paid out are rounded down to a denomination interval – in the United States and Australia , 10 cent intervals are used. The rounding loss is sometimes known as ''breakage'' and is retained by the betting agency as part of the commission. HISTORY OF PARIMUTUEL BETTING The parimutuel system was invented by Parisian perfume maker Joseph Oller in 1865 when asked by a Bookmaker friend to devise a fair system for bettors which guarantees a fixed profit for the bookmaker. 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". 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 1933 at Arlington Park , near Chicago, Illinois ). PARIMUTUEL BET TYPES There may be several different types of bets, in which case each type of bet has its own pool. The basic bets involve predicting the order of finish for a single participant, as follows: North America In Canada and the United States , the most common types of bet on horse races include:
Win, place and show wagers class as straight bets, and the remaining wagers as '''exotic bets'''. Bettors usually make multiple wagers on exotic bets. A '''box''' consists of a multiple wager in which punters bet all possible combinations of a group of horses in the same race. A '''key''' involves making a multiple wager with a single horse in one race bet in one position with all possible combinations of other selected horses in a single race. A '''wheel''' consists of betting all horses in one race of a bet involving two or more races. For example a 1-all daily double wheel bets the 1-horse in the first race with every horse in the second. People making straight bets commonly employ the strategy of an 'each way' bet. Here the bettor picks a horse and bets it will win, and makes an additional bet that it will show, so that theoretically if the horse runs third it will at least pay back the two bets. The Canadian and American equivalent is the bet across (short for ''across the board''): the bettor bets equal sums on the horse to win, place, and show. In Canada and the United States punters make exotic wagers on horses running at the same track on the same program. In the United Kingdom bookmakers offer exotic wagers on horses at different tracks. Probably the Yankee occurs most commonly: in this the bettor tries to pick the winner of four races. This bet also includes subsidiary wagers on smaller combinations of the chosen horses; for example, if only two of the four horses win, the bettor still collects for their double. A '''Trixie''' requires trying to pick three winners, and a '''Canadian''' or '''Super Yankee''' trying to pick five; these also include subsidiary bets. The term '''nap''' identifies the best bet of the day. A parlay Or '''accumulator''' consists of a series of bets in which bettors stake the winnings from one race on the next in order until either the bettor loses or the series completes successfully. Australia
Ireland and the United Kingdom
Depending on the facility rules, which might vary from event to event, other bets may also be offered which allow the user to pick the finish of more than one participant, or more than one event. These are called exotics, and generally pay higher dividends. However, the facility's take is usually higher for these bets as well. The major exotics (in North America and Australia) are:
STRATEGY AND COMPARISON WITH INDEPENDENT BOOKMAKERS Unlike many forms of Casino gambling, in parimutuel betting the gambler bets against other gamblers, not the house. The science of determining the outcome of a race is called Handicapping . It is possible for a skilled player to win money in the long run at this type of gambling, but overcoming the deficit produced by taxes, the facility's take, and the breakage is difficult to accomplish and few people are successful at it. Independent off-track bookmakers have a smaller take and thus offer better payoffs, but they are illegal in some countries. However, with the introduction of Internet Gambling has come "rebate shops". These off-shore betting shops in fact return some percentage of every bet made to the bettor. They are in effect reducing their take from 15-18% to as little as 1 or 2%, still ensuring a profit as they operate with minimal Overhead . Rebate shops allow skilled horse players to make a steady income. The recent WTO decision against the United States Of America by the small island nation of Antigua opens the possibility for offshore horse betting groups to compete legally with parimutuel betting groups. SEE ALSO EXTERNAL LINKS Tote Ireland Horse Betting Parimutuel applications in finance |
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