What is ‘Pari-Mutuel Betting’?
The term pari-mutuel refers to a betting system, or pool, in which the people who bet on the first-, second-, and third-place competitors will share the sum of the total bet, minus that which is put aside for house management. In games such as lotto, the pari-mutuel system simply means that the bets are pooled and shared among the winners.
While this is the most common usage of the term, pari-mutuel can also be used to refer to the machine that registers these bets and the subsequent pay outs.
‘Pari-Mutuel Betting’ Explained
Pari-mutuel is a term used to describe a system of betting in which all the bets are pooled and will be shared among the highest winners. Having originated in France to be applied to games including horse racing and sports events, pari-mutuel is now in common use among gamblers participating in lotto games.
In pari-mutuel games, the bets from all the players are pooled into a pot. Then, when the results come in, the total sum of the bets will be split among the players who either bet on the top three competitors (for example, those in first-, second-, and third-place in a horse race) or those who have all won the jackpot in a game of lotto. A small portion of these pooled bets will be put aside for the management or the bookies, but the remaining money will be shared fairly across the winning bettors.
The pari-mutuel betting system is thought to be beneficial for lotto players because they can win more money in the long-term. For example, if the jackpot one week is £850,000 and nobody has the winning number combination, the jackpot will rollover to the following week. In the time that separates the lotto draws, more money will have been pooled into the pot by bettors from ticket sales, making the jackpot even larger. Thus, if somebody wins the following week, the pari-mutuel sum will be larger for the winners.