Parimutuel: meaning, definitions and examples

Etymology

• The word comes from French, where 'pari' means 'bet' and 'mutuel' means 'mutual' or shared.
• It was first used in the gambling context in the late 19th century, particularly in horse racing.

History

• The system was developed in France in the 19th century to improve the fairness and accessibility of betting on horse races.
• Parimutuel betting gained popularity in the United States in the early 20th century, eventually becoming a staple at racetracks.

Culture

• Many major horse racing events, like the Kentucky Derby, use this betting system, linking it closely to racing culture in the U.S.
• It’s also common in greyhound racing and other sports where competitors race against each other.

Mathematics

• The payouts in this betting system are calculated by dividing the total pool of bets minus a house take among the winning tickets.
• The odds are not fixed and can change as more bets are placed, which makes it unique compared to fixed odds betting.

Legal Aspects

• Parimutuel betting is regulated differently across states and countries, often requiring licensing and oversight.
• Some jurisdictions use this system to help fund state programs through taxes on the betting revenue.