Horse races have always captured the imagination of punters, due to the fact that they delivered immediate results and participants didn’t have to wait long for the outcome. The more horses participate in the competition, the lower the chances are to predict the winner and the odds are not making things much easier.
What is mutual betting?
The system is commonly referred to as Pari-mutuel betting and is a special type of wagering, in which players compete against each other rather than the house. This is achieved by placing all the wagers in a single pool and the profits are distributed among participants at the end of the race. What happens is that the bookmaker has its winning margin reduced, which in turn benefits the punters.
The bookies don’t lose either, because they still charge a small fee and this allows them to covers all their expenses and also pay the taxes. There are not many sports that allow players to use the pari-mutuel betting system, but horse and Greyhound races are perfect. Not surprisingly, four in every five horse bets in the world are made using this system, which is particularly popular in Japan and United States.
A brief history of mutual betting
Pari-mutuel wagering is not an invention of the 21st century, and it was first used 130 years ago, in France. It was invented by Joseph Oller and it proved to be an instant hit, with horse betting fans embracing it from the very beginning. In a short period of time, it became the only form of betting that was allowed nationwide and virtually all who wager on horse races in France used it extensively.
Given the fact that bookmakers compete against players, they are obviously interested in maximizing the house edge and this is done at the expense of players. As a result, corruption is a significant threat and past performance proved that when a gambling company has both the means and the resources to exercise pressure on the odds, they usually do it. By comparison, the pari-mutuel wagering renders the bookmaker to the status of a simple operator, while the players are the ones who make the rules of the game.