Sports betting is one of the more popular forms of gambling, but very few actually know about the origins of their favorite way to gamble. Players like it because it allows them to bet, and have more of a vested interest when they watch their favorite sporting events. Professional racebooks, which allow players to bet on horse races have a history that dates back to the 1800's in England; at this stage, there was no real regulation over the betting and operators were known to cheat.
In response to the controversy of Sportsbooks, a machine was invented that would almost entirely inhibit racebook operators from cheating players since it used an auction pool. The machine which was created b M. Pierre Ollier was still operated privately, but was flexible enough to let any player bet on any horse. After this new betting system was introduced, France, where many of the huge race events were taking place started to call the auction pools mutuels, and that's how the term "pari-mutuel betting" derived, since it was renamed as such when the betting machine arrived in North America.
Pari-Mutuel betting, which was introduced back then, is very similar to the way it works today. Players who want to get involved with horse betting choose the horse that they predict will win and place their bet. Once the race is complete and the results are available, those who won their bets receive a payoff. With Pari-Mutuel Betting, however, win money is not divided up equally (i.e. winners don't automatically get a jackpot amount like they might in casino games or other types of gambling); with this type of gambling, players get a return on their initial investment and then the rest of the money in the pool is divided amongst the rest of the winners and winnings are distributed in units of $2. For example, a player that bet $2 will get their initial $2 bet back plus an additional $2. Players with a bet of $50 on the other hand will get their $50 back plus 25 units multiplied by $2. Essentially, in Race betting, the payoff is 1:1, but the way of determining it is much more complicated.
Odds are not really discussed in Pari-Mutuel betting; since they are based on the percentage of the pool and each players individual wager on individual horses have a direct correlation. Tracking the number of times that a horse wins has no bearing on the odds in Pari-Mutuel horse betting since the money that's paid out comes from a pool of the losing tickets, and not the pool that winning players put in.
The tote is the scoreboard that tracks the status and scores at the racetrack or when watching race events on TV. The name comes from the Totalisator Co. which presently and historically has operated race betting in North America. All information on the tote boards can change constantly, particularly when it comes to pools and odds, since they are tied directly to computerized systems that keep track of bets. Information always included on the tote boards at racetrack are:
- Time of day
- The post time until the next race
- Odds based on each horses last race (always approximate due to the system) and the payoffs the resulted from the race that took place previously
Some tote boards also include (typically reserved for the higher-end racebooks):
- Conditions of the weather where the race is taking place
- The conditions of the track
- Any changes of equipment or changes of jockey
- Pools available with potential payoffs for atypical race bets