mutuel

Mutuel, short for parimutuel wagering, is a system for placing bets on events such as horse or greyhound racing where all bets of a given event are pooled together. The term mutuel is used in some countries, while parimutuel is the more formal term in others. In this system, there are no fixed odds set by bookmakers; instead, the final payouts are determined by the size of the pool and the distribution of bets.

How it works: For each event and category (such as win, place, or exacta), bettors place wagers into a common pool. A portion of the pool is kept as a takeout to cover operating costs and profit. The remaining money in the pool is then distributed among the winning bets, typically on a pro rata basis according to the stake of each winning ticket. The more money that is wagered on a winning outcome, the lower the payout per winning bet, since the pool must cover all successful wagers.

History and usage: Parimutuel wagering was developed in the late 19th century in France as a method to reduce operator liability and fix betting odds through crowd participation. It spread widely to horse racing and later to other racing and gaming forms in many countries, including the United States and Canada. The term mutuel is commonly used in North America, whereas “parimutuel” is widely used in other regions and in formal descriptions of the system.

Advantages and considerations: The system provides liquidity and shifts risk away from the operator, reflecting bettor demand in real time. Payouts are transparent but can be highly variable, depending on pool size and betting patterns. Takeouts and regulatory rules influence final winnings, and delays can occur between wagering close and payout.