Ever wanted to beat the house? Pari-mutuel gambling offers the chance. Pari-mutuels are the most widely available form of gambling in the United States–forty three states allow and regulate it. It is generally considered a more agreeable form of gambling, since the minimum bets are lower, and the payout rate is much higher than fixed-odds (or casino) gambling.
If you have ever bet on horse racing, greyhounds, or jai alai, you have participated in pari-mutuel gambling. Defined as “wagering amongst ourselves,” all bets are placed in a communal pot. The winning bets divide the pot after a percentage is taken out for the house. The “odds” that are displayed are actually a ratio of the amount bet on all outcomes and the amount placed on only one number. These odds change as the amount and number of bets changes.
Other types of gambling are very similar to pari-mutuels, such as sports betting and state lotteries. Poker is another type of pari-mutuel gambling. Bettors play on the outcome of the hand by placing bets in the pot. The house takes a rake–usually 10%–and the winner(s) of the hand collect the remaining money from the pot. Poker has rocketed to popularity due to internet gambling, and card rooms are spreading across the country at traditional pari-mutuel facilities.
Fixed-odds games like blackjack and roulette are designed to pay out less than 50%, otherwise the casino would lose money. While fixed-odd games can be very enjoyable for gamblers, they are a poor choice for the bettor who wants to make money. Pari-mutuels, on the other hand, pay out 75%-90%, depending on the state you are in and the vigorish collected by the establishment. The trick, of course, is being the person who holds the winning ticket! The art and science of gaining a long-term monetary advantage in pari-mutuel betting is called handicapping.
Handicapping involves analyzing a variety of information to determine which entries are most likely to win the event. Handicappers use the results of prior races, the reputation of the horse/jockey/trainer, weather, track conditions, and any other available information to make their picks. Track programs offer a wealth of information. Online race books offer the same information contained in programs along with more up-to-the-minute information.
Straightforward bets begin at only $2, with a maximum of $10,000. The most common bets are win (first), place (first or second), and show (first, second, or third). Larger amounts can be won by predicting the finishing order with an exacta (first and second place exactly), or a trifecta (top three in order).
Horse racing is offered live at 74 sites in 30 states, and are most common in states where horses are bred and trained. Greyhound dog racing is offered in thirteen states, primarily east of the Mississippi river. Jai Alai is a unique, fast-paced game played in six frontons (courts) in Florida. If a patron cannot attend these events live, they can still wager through off-track betting establishments or over the internet.
Off-track betting, or OTB, establishments offer simulcast television coverage of races and events. Bettors can place wagers as if they were at the event in person. Betting ends at the track and at the simulcast sites at the same instant. Wagerers can claim their winnings immediately after the results are final. Most live venues also offer OTB simulcasts of other race courses.
The internet is offering pari-mutuel gamblers new and exciting opportunities. Other types of gambling—including poker—face a clouded legal situation. This is not the case with pari-mutuels. It is legal to bet on pari-mutuel events over the internet if you live in one of the 43 states where it is permitted.
The internet offers pari-mutuel gamblers an excellent deal. Many sites collect commissions (or vigorish) in the low single digits as opposed to the 18-20% collected by live venues. Internet race books have very small overheads. For the bettor, lower vigorish means handicapping is easier, because the bettor only needs to overcome a small disadvantage. The result is a bettor can make fewer winning bets while still coming out ahead over time.
Live venues, OTB, and the Internet all have their place in the pari-mutuel betting world. These sports are successfully reaching out to new participants and broadening their appeal.
