Parimutuel betting is the form of betting used at racetracks. In some countries, it is the only legalized way to bet on races. Unlike fixed odds betting, where bettors know how much winning they can cash in before the event even starts, in a parimutuel style, the actual payout is calculated only after the betting pool has been closed. . After the outcome of the race, the winners split the pot among themselves based on the odds they placed on a particular bet.

Pari-mutuel betting began when a perfume shop owner named Pierre Oller from France sold tickets to a horse race, pooled the proceeds, and divided the proceeds among the winners after taking out a five percent handling charge. He continued to introduce his system of betting at race parks across the country until it became legal in 1887. It was only in the late 1920s that England and the United States also legalized pari-mutuel betting at racetracks. their respective countries.

During this time, corruption was rampant at the race track, as pari-mutuels and odds were calculated by hand. Mistakes were common (and deliberate in some cases). An engineer named Henry Straus got very angry one day when he was only paid 4-1 on a winning ticket when he placed a bet on a horse with odds of 12-1. Along with other engineers, he developed an electromechanical device that would accurately calculate the odds of a race while displaying the results on an electronic board for all to see. This ensures punters get the correct payouts and was installed in Pimlico in 1930.

Now, technological advances have paved the way for faster calculations at the racetrack and more complicated betting. However, the spirit remains. You are not playing against the house, but rather you are betting against all the other punters who have placed their bets on that particular race. And after the clue gets your opinion, you, along with all the other winners, share the remaining pool based on the odds of the bet you placed.

Pari-mutuel betting is the same as the one that was first introduced in 1865.

All thanks to an enterprising perfumer named Pierre Oller.