Horse racing is one of the most popular betting activities in the world. There are thousands of race tracks in many places, and the great majority of them provide something known as parimutuel wagering. What is parimutuel betting? It is simply a group of people betting with one another on a certain event.

But, there is more to parimutuel betting in horse racing. This type of wagering is what allows horse racing to be conducted in many areas. Here at Ez Horse Betting, we take a closer look at parimutuel wagering and how it contributes to the sport of horse racing.

About Pari-mutuel Betting

The type of horse betting that is used in horse racing today can be traced to Joseph Oller, an entrepreneur that lived in Paris. He is perhaps better known as one of the co-founders of the Moulin Rouge. The system invented by Oller was complex, and it required a lot of difficult calculations. As a result, it took some time for this type of betting to catch on.


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In 1913 the very first Totalisator, or tote board, was installed at a race track in New Zealand. The arrival of the tote board simplified the calculations that were required by parimutuel wagering. The creation of this type of betting made it much easier for a group of individuals to bet on horse racing, but it also accomplished another goal.

Because parimutuel wagering did not involve betting against the house, horse racing tracks were able to evade gambling restrictions. It was not really considered gambling when individuals were allowed to bet among themselves. In fact, the very definition of “parimutuel” in the French language is “betting among ourselves.”

How Parimutuel Wagering Works Today

The way that parimutuel wagering works is simple today. It involves placing all the money that has been wagered on a horse racing outcome into pool. The winners of the bet then share in the profits of the pool. Before the winnings are distributed, a take-out or vigorish, is removed by the race track. This take-out is how the track makes its money and pays purses for horse racing.

Let’s look at a simple example:

In Race 1 there is pool of $1,000 which consists of win bets only. All bets on the race track have their own pool. This $1,000 consists of all the win bets that have been made on the individual horses in the race.

The race track removes 10% of the pool for its take-out. This leaves $900 to be split among the winners of the pool. The race is conducted and Horse 3 is the winner. All those who bet on Horse 3 to win will be given an equal share of the parimutuel pool.

Is Online Horse Betting a Type of Parimutuel Wagering?

Online horse betting is indeed a type of parimutuel wagering. The bets that you can make at an online racebook are all placed in the parimutuel pools on the track. This is what allows individual race tracks to make wagering available to individuals throughout the world. It is the exact same type of betting that you would be able to access on the race track.

Because online racebooks use parimutuel wagering instead of other types of betting, they are legal in most jurisdictions. Even in the United States, a country that has been slow to approve online gambling, you can bet on horses online in almost every state.

Parimutuel Betting Vs. Other Types of Betting

Parimutuel wagering is one of the things that sets horse race betting apart from other types of wagering. Here’s a closer look at how betting on horses is different from betting on other gambling games and events.

In online casino gambling the player is trying to beat the house. The player is essentially competing against the casino. In this scenario either the player or the house wins. Gambling games of this type are considered to be a zero-sum game because someone wins and someone loses.

When you are gambling on a game such as blackjack, the outcomes of the other players at the table don’t determine whether you win or lose. Yes, players can make bad choices and cause the entire table to lose, but this is rare. As a general rule, another player has no vested interest in you winning or losing.

This is not so in parimutuel wagering. In this type of betting you are actively trying to best your fellow bettors. In horse racing someone must lose in order for you to win. This is true of all parimutuel wagering. This is because the money that you are winning comes from the pockets of the bettors who lose.

There is one game in the online casino that is somewhat similar to parimutuel betting. That game is poker. In live and online casinos the players compete against one another to see who can make the best hand. The casino takes a portion of each pot as a type of vigorish, or rake.

How Race Tracks Profit from Parimutuel Wagering

Horse racing tracks in the United States and abroad depend upon parimutuel wagering for their very existence. They would not be able to offer horse racing to bettors if there was no way for them to make money from the venture.

The money that is withdrawn from every parimutuel pool is used for the operating expenses of the race track. This includes salaries for employees, race track upkeep and maintenance, and the purses that compel owners and trainers to put their horses in races.

The amount of the take-out at a race track can vary depending on the type of pool. As a general rule, the take-out is higher for exotic bet pools than it is for the straight wager pools. It could be 15% for a win, place, or show pool, or it could be 20% or more for a Pick 6 pool.

The amount of the take-out at race tracks is always a source of contention among bettors. The bettors think it is always too high, and the race tracks always think it is too low.

You now have an understanding of what parimutuel betting is and how it works. Are you ready to start betting at an online racebook? Try one of the online horse betting sites that we recommend. You can get a nice horse betting bonus just for signing up and making your first deposit. You’ll also get access to the best handicapping tools. Check our Bovada racebook review, Twinspires review or even our Betamerica review. All great choice if you are in the US. 5Dimes review for folks anywhere!

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