Parimutuel betting, which you may occasionally see written as parimutual, pari-mutuel or some other similar name, is different from what most punters (certainly those in the UK) know as “normal” betting. In this article, we will take a look at how parimutuel betting (as we shall now call it) works, how you can make such wagers, what the main options are and what, if anything, you need to be aware of.
What Is Parimutuel Betting?
When most of us think of having a bet, be it on a big horse race from the Cheltenham Festival, the Champions League final, Wimbledon or anything else, the type of gambling imagined is called fixed odds betting. So, if you bet on Novak Djokovic (paperwork permitting) to win the title at Wimbledon, you may be quoted odds of 2/1. If you bet £10, you will get £30 back, £20 net win and your £10 stake, assuming the Serbian supremo wins the title.
In one sense parimutuel betting can be seen as a different way of determining odds. However, it is not a different odds format, in the way that 2/1 in fractional, UK odds, is 3.0 in decimal odds or +200 in American odds. Odds formats thus represent different ways of writing the same thing.
Pools or parimutuel betting is an entirely different way of calculating what the odds actually are; in this case, by the word “odds” we mean what you stand to win. With standard fixed odds betting the person laying the bet, or accepting it, typically the bookmaker (though it could be a fellow punter at a betting exchange) is taking on a risk. They accept your bet knowing that if it wins they will have to pay you from their own pocket.
Bookies, of course, are far from stupid and they formulate their odds in such a way that there is plenty of net wins factored in for them. They do this by offering odds that are slightly lower than they “should” be and the simplest way of explaining this is by looking at the odds in cricket for either side to win the toss. This is a 50/50 event and so both sides should be priced at evens but, instead, both are often priced at 10/11 or perhaps even odds as low as 5/6.
If the bookie accepts £1,000 on both possible outcomes at 10/11 then no matter what happens they will make a net win. This hints at another aspect of fixed odds betting – the concept of a balanced book. In an ideal world, the bookmaker will want a situation where no matter what happens in the event, be it a horse race or game of tiddlywinks, they make the same net win.
They may not always strive for this, let alone achieve it, but by altering their odds they often try to create a situation where their worst outcome, for example a favourite winning, means no loss, or only a small loss, whilst any other outcome lands them a sizeable net win. Pools betting, i.e. parimutuel betting, is different in almost every regard.
Punter Waits to Learn Winnings
Parimutuel betting works by taking all the stakes from a given market and pooling them together, explaining why it is sometimes referred to as pools betting. Deductions are then made to cover necessary taxes, levies, bookmaker costs and to enable the operator to come out on top. The remaining total is then divided between anyone who backed the winner, with payouts being made in proportion to their stake.
When betting is organised in this way the bookmaker does not care which runner wins because their result will only depend on the total pool. Their cut is taken before a punter’s winnings come into the equation and is fixed. As such, there is no huge risk for them, the only potential issue is that they need to attract enough money into the pool so that their cut from it is enough to cover their outlay (staff, marketing and other operational costs).
Another huge difference between pools betting and fixed odds wagering is that when the bettor makes their selection they do not know what they stand to win. This is because one of the two main factors that influence the effective odds is only known when the race starts and no further bets are taken. (Note that football matches, tournaments, fights or other contests can be used but for the sake of simplicity, we will now use a horse race as our example.) At this point we know the value of the total pool; in other words, the worth of the pie that will be divided between the winners.
The other key piece of information is what proportion of the money wagered on the contest was on the successful horse and of course this is only known after the race. Those that are unaccustomed to this style of wagering find it very strange that they must bet on a horse without knowing what they stand to win. The general odds and Starting price (SP) will give you an indication and it is very unusual to find a huge disparity but it is certainly possible that there might be a sizeable difference.
How Winnings Are Calculated – An Example
In the UK, most punters tend to use parimutuel betting through the tote system and so to give an exact example of how pool winnings are calculated, we will use the tote as our example. The principle is broadly the same no matter what parimutuel betting system you are gambling with, though the cut the operator takes will vary.
The tote’s rules explain that the pool deduction rate is 19.25% for horse races governed by the British Horseracing Authority (BHA) and 20% for races operated by Horse Racing Ireland. Let us imagine a race at Aintree (in the UK), where a total of £20,000 has been wagered on a race with three horses, as follows:
- £10,000 is wagered on Fighto
- £6,000 is wagered on DanielSan
- £4,000 is wagered on WaxOnWaxOff
The total pool is £20,000 and this is subject to a deduction of 19.25%. Tote retains £3,850, leaving £16,150 to be divided between the winning bets. WaxOnWaxOff romps home which means that £4,000 of the £16,150 has effectively won. The prize pool is divided by the winning proportion and then a dividend is declared, rounded to the nearest 10p. This dividend expresses what your returns are for every £1 staked on WaxOnWaxOff. £16,150 divided by £4,000 = £4.0375 and so a dividend of £4 is declared.
A punter who had bet £1 will receive £4 back, whilst another punter who was bolder and bet £50 on WaxOnWaxOff will get £200 back. Either way, the effective odds are 3/1. The amount in the pool will vary from race to race, as will the proportion of that stake that picked the right horse. In addition, the pool deduction will vary depending on where the race was held (with tote) or what deduction the operator makes if you are placing a parimutuel bet in a different country or via a different means. No matter what though, when it comes to any pools or parimutuel bets, the three key factors are:
- How much cash is in the pool
- The operator’s deduction for running the pool
- What proportion of the prize pool was bet on the winning selection
Parimutuel Betting in the UK
Parimutuel betting is done virtually exclusively with tote or through tote-affiliated bookies, or those that match the tote payouts. The tote itself has a large presence at horse and dog racing venues and bets can also be placed online. Whilst the totewin and toteplace bets are the equivalent of a win single and a standard place bet, and the Exacta and Trifecta are the equivalents of a forecast and tricast respectively, tote’s main draw tends to be more specialist bets that can generate large payouts when punters get multiple race results right.
Here is a full list of the parimutuel bets you can make with tote:
- Win – Equivalent to a standard win single.
- Place – Back a horse to finish in the places (can be combined with the above to create an each way bet).
- Exacta – Like a standard forecast, pick the first two horses in the right order (can be reversed to cover either order, called a Quinella).
- Trifecta – Like a tricast, predict the first three horses home in the right order, or any order if you opt for a combination bet.
- Swinger – Pick two horses to finish in the top three.
- Placepot – Pick a horse to place in each of the first six races at any UK meeting – essentially a to-place accumulator that can deliver impressive wins.
- Quadpot – As above but just four races, the third, fourth, fifth and sixth on any UK racing card
- Jackpot – One of tote’s most popular pool bets can deliver huge payouts. To win you must correctly pick the six winners from six specific named races on a single card.
- Scoop6 – Similar to the Jackpot but typically only offered on Saturdays and at select meetings. The Jackpot has a place fund as well but the main win fund is the big draw, with some huge wins possible and the potential to claim a further bonus by picking a winner the following week.
Note that tote has offered various other bets over the years but some have been discontinued, such as the Super7. The list above is correct at the time of writing but is subject to change.
Parimutuel Betting in Other Countries
Whilst pools betting represents only a small portion of the UK betting pie, in some other countries it is far more widespread. Indeed, in some nations, such as France, it was for a long time the only legal form of gambling there was. In general, we are seeing a lot of gambling regulations around the world become more relaxed and this means that most nations now have alternatives available. Nonetheless, parimutuel betting continues to be popular in the following countries:
- Ireland – Similar to the UK, fixed odds betting rules but tot Ireland offers the same options as the UK operation
- Australia and New Zealand
- US, Canada and Mexico
- Japan
- Hong Kong
- Sweden
- France – Run by the state-controlled PMU (Pari Mutuel Urbain)
Which Is Better, Pool/Parimutuel or Fixed Odds?
Obviously if you want to know what your returns are in advance then using a fixed odds bookie (or an exchange – that is essentially the same) is the only way to go. However, if you are happy to take your chances then might opting for the parimutuel route actually deliver bigger returns?
There is no definitive answer to this and equally there is no way of knowing for sure before you make your bet. As such, any answer we give is tentative and very generalised, meaning we suspect that most of the time one type of bet will beat the other, but that this will certainly not be the case every time.
There are certain situations where there is a good chance that one will beat the other, the most obvious example of this being where a large rollover has created a huge tote Super6 jackpot. In general though, there are just too many variables and unknowns for anyone to be sure that fixed odds or the pool will yield the bigger payout.
Much also depends on which pool bet we are looking at. When it comes to the most basic bets like singles and places, the general consensus is that fixed odds will be the better option. However, at the time of writing UK customers can take advantage of the Tote Guarantee, which does even things up a little. This means is akin to Best Odds Guaranteed (BOG) with a traditional bookie.
Whereas BOG pays out at the higher of the price you take when making the bet and the SP, with the Tote Guarantee you will get the higher of the standard win dividend or the SP. If we consider another tote bet, the Exacta (and the Trifecta for that matter), then the general consensus among experts who have researched the matter in far greater depth than we have seems to be that the parimutuel dividend out-performs that main alternative.
It is worth noting, however, that when it comes to these bets, pools betting is typically compared with the Computer Straight Forecast or Computer Tricast. This is not a fixed odds bet and these wagers can sometimes be placed using fixed odds, though there is little solid data comparing all three options. As such, if this is the bet you favour then pools betting could well be the best way to go.
However, when it comes to bigger bets, such as the Placepot, Jackpot and Scoop6, most racing experts agree that, more often than not, using a fixed odds acca should yield a bigger payout. Parimutuel pools often have a minimum value but will only tend to go much higher than that at the very biggest meetings. In such scenarios, especially if funds have rolled over from previously unwon jackpots, you may find the parimutuel pays more.
However, the payouts from a sixfold racing acca are typically so huge that they dwarf the pool of most comparable bets. Of course, if your six winners are all at short odds, the acca may not pay a huge sum. But that said, where six warm or strong favourites have won, there is every chance that you may be sharing the parimutuel pool with a number of fellow winners. At the same time, where the pool itself is very large, and could perhaps start to rival the fixed odds acca, there is every chance that, again, you may have to share the payout with a number of other victors, thus reducing your individual share.
Tote v Acca Compared
Let us try to make a comparison by looking at the Tote Jackpot, where you must pick the winners of six races at a specified meeting. The prize pool is set at a minimum of £10,000 and can go much higher subject to wagering. If you backed six horses which were all priced at 4/1 in a sixfold acca, your winnings would be £15,625 based on a £1 stake. To beat that with a parimutuel bet the pool would need to be boosted by more than 50% and you would need to be the only winner.
If two of those horses were actually priced at odds of 8/1, rather than 4/1, the acca would yield a net win of a huge £50,624. Change a third from 4/1 to 10/1 instead, which is hardly a huge outsider in the context of a sixfold horse racing acca, and that leaps to a staggering £111,374. On the other hand, if all six horses were priced at 8/1, the winnings from just a £1 accumulator would be well over half a million pounds.
Tote Jackpots of that size and more have been won but it is exceedingly rare. Back in 2011 a 60 year old won £1.45m from a £2 bet (he picked two horses in one race for a little extra cover). The horses that won were priced at 2/1, 5/1, 12/1, 12/1, 16/1 and 16/1, equating to 879,137/1, so he did actually beat the potential acca pay.
However, had one other punter backed the same combination his parimutuel win would have been halved to just over £700,000. And indeed, this is the danger with pooled bets – you are always at the mercy of luck as regards how many people share the big prize. In addition, it should be noted that for the Jackpot bet, the pool deduction is far higher than the standard racing tariff at 29%. This is a substantial margin for the bookie and obviously limits the prize pool that is left.
The Jackpot does rollover when it is not won and this can substantially increase the pool over time. Looking out for large jackpots is a ploy of many fans and deciding when the total is big enough to make the pool option preferable to the fixed odds route is up to you. In general though, the chances are that more often than not simply backing a standard acca will deliver greater returns.
This approach also means that you can choose whatever races you want, and how many. In contrast, with a pool-based bet the number of races and which specific heats you must bet on are fixed. And, as said, with an acca you know exactly what you stand to win before you place your bet. Parimutuel betting has its fans but for us, fixed odds offers greater flexibility, more certainty and, we believe, bigger payouts on average.
Parimutuel Betting Away from the Horses
Whilst the word parimutuel may not be known to most in the UK, “pool” or “pools”, with regards betting, certainly are, at least to those who remember the 1990s (or are even older!). The football pools, known at least in its heyday simply as “the pools”, was probably how many punters had their first introduction to parimutuel betting, even if they didn’t know it and didn’t call it that.
The pools date back to the 1920s but really shot to prominence in the 1960s, especially following Viv Nicholson’s “spend, spend, spend” promise following her husband’s win in 1961. Keith scooped more than £150,000, not far shy of £4m adjusted for inflation in 2022 and the tabloid coverage of Viv was tremendous free marketing for firms that operated the pools.
The advent of the National Lottery rather killed off the appetite for the football pools, though they did continue to operate. The concept was similar to the bets we have talked about above but rather than applying to horse racing, the pools targeted football, the nation’s favourite sport.
The mechanics of the games varied a little from firm to firm and over time but one of the classic variations saw players trying to correctly pick eight score draws, often from 10 to 13 picks. Underlying the mechanics of the game, however, was the same principle of parimutuel betting we have already described. All the entry money, or stakes, are subject to a deduction by the operator, with the remaining prize pool then being divided among the winners (the football pools often had a jackpot that could rollover, as well as smaller prizes).
Football Pools Reimagined
As we have said, the rise of the National Lottery was bad news for the pools. Whilst it soldiers on, and delivered a £3m payday to a Scottish man in 2011 (he won thanks to eight 2-2 draws!), it has been outstripped by more than just the lottery.
A number of more modern takes on the football pools have sprung up over the past 10 years or so. These have generally relied on the same parimutuel principles but have sought to give the punter more control, more options and, potentially, even bigger wins.
Probably the most famous of these is Colossus Bets, which launched in 2013 and originally only offered football-related pools. They have added a number of options, both in terms of the style of product and the sports covered, over the years. In 2018 they launched their horse racing bets, meaning that tote were no longer the only pools-based option for UK racing fans but they probably remain most well-known for their football bets.
Colossus guarantee minimum prizes on most of their jackpots but remain a betting pool, with winnings largely dependent on how many people get involved and how many winners there are. They now offer a huge range of different bets allowing customers to “bet” on any number of events; that means, in many ways, they are more like a bookmaker now than a football pools offering. Whilst these daily and weekly pools have their fans, it is the eponymous Colossus that made many sit up and take notice.
This has offered a guaranteed £10m jackpot to anyone who could predict the correct scores in seven specific matches. That would earn a player £5m (shared in the highly unlikely event of there being more than one winner) with an additional £5m available for predicting the score in the bonus game. For a £2 stake that is an incredible prize and whilst the site has moved to focus on smaller prizes in recent years, they still regularly offer the chance to win it big.
Parimutuel Betting Conclusion
Parimutuel betting, or pools betting, is a form of gambling where innings are determined by how much is wagered on an event and how much of that total is on the winner. The other key factor is what percentage of the total stake the operator takes to cover their costs and allow them to come out on top.
In the UK, pools betting has been around for a long time, either through the tote, or through the football pools. It is not as popular as fixed odds betting but it certainly has its fans. In general, most punters prefer the certainty, flexibility and simplicity of fixed odds, but the huge jackpots that parimutuel pools can, and often do, offer, are certainly appealing.
The question as to which style of wagering offers the biggest returns is complex and varies on a case by case basis. With most bets, most of the time, fixed odds will yield a bigger net win but with parimutuel allowing rollovers to occur when there is no winner, they can sometimes be the best option, occasionally even becoming punter-favourable should the jackpot reach a certain level.