What is parimutuel horse racing betting?
Pari-mutuel wagering is a system developed in France in which all bets of a particular type are placed together in individual pools. Then, after taxes and the track “takeout” are deducted, the remainder is divided among all winning bettors.
In the modern era of thoroughbred horse racing, the Tote board that displays the odds is part of a complicated computer system that tallies bets in real-time and constantly recalculates each entrant’s odds based on the wagering.
It’s an extremely efficient system – the “crowd” is better at determining accurate odds than any individual handicapper ever could be — but there are drawbacks.
The presence of “whales” who wager large amounts in the final seconds before the gates spring open is one of the biggest shortcomings. For example, you can buy a win ticket on a horse at 5-1 and watch the odds plunge when late money pours in on your horse. When you go to collect, you might only get paid at 3-1.