Online betting has gained immense popularity in India over the years, with various markets and betting types.
One of the intriguing methods within the betting world is parimutuel betting, also known as pool betting.
Betting enthusiasts like you in India often explore different betting markets, from traditional fixed-odds betting to more unique options like parimutuel betting.
In this article, we will explain to you what exactly is Parimutuel Betting along with its advantages and disadvantages.
Understanding Parimutuel Betting
Parimutuel betting is a type of system bet where all bets of a particular type are placed together in a pool, and the odds are determined by the total amount wagered rather than being set by bookmakers beforehand.
This form of betting is commonly used in horse racing. Once all bets are placed, the house takes a percentage cut, and the rest of the pool is divided among the winning bets.
The payoff odds are calculated by dividing the total pool (minus the house's take) by the number of winning bets.
This means that the final payout isn't known until the betting is closed and the pool is set.
Horse Race Scenario
Imagine a horse race featuring four horses: Speedy, Thunderbolt, Blaze, and Swift.
You and other bettors have the opportunity to place bets on these horses to win.
- ₹50,000 on Speedy
- ₹30,000 on Thunderbolt
- ₹20,000 on Blaze
- ₹10,000 on Swift
The total betting pool sums up to ₹110,000.
Calculating Payouts: Given a 10% deduction for simplicity, let's determine the payouts for each horse:
Total bets on Speedy amounted to ₹50,000. Following a 10% deduction from the initial pool of ₹110,000, the adjusted pool stands at ₹99,000.
Therefore, the payout per ₹1 bet on Speedy is ₹1.98.
With total bets reaching ₹30,000 on Thunderbolt, the pool, after a 10% deduction, settles at ₹99,000 (₹110,000 – ₹11,000).
Consequently, the payout per ₹1 bet on Thunderbolt stands at ₹3.3, promising an enticing return for those who placed their wagers on this formidable competitor.
With a total of ₹20,000 in bets on Blaze, the pool, post a 10% deduction, settles at ₹99,000 (₹110,000 – ₹11,000).
As a result, the payout per ₹1 bet on Blaze is ₹4.95, offering an appealing return if you have placed your faith in this contender.
With a total of ₹10,000 in bets on Swift, the pool, following a 10% deduction, amounts to ₹99,000 (₹110,000 – ₹11,000).
Consequently, the payout per ₹1 bet on Swift is ₹9.9, presenting an enticing return if you have placed a wager on Swift.
Advantages of Parimutuel Betting
Parimutuel betting provides a different and often more dynamic betting experience compared to fixed-odds betting systems.
Here are its advantages.
- Fairness: It ensures fairness by pooling all bets together, creating a unified pool of stakes. Payouts are then determined based on the total pool after deducting taxes and the house's take.
- Large Payouts: With a large pool of bets, parimutuel systems can help you with substantial payouts, especially if there's an unexpected or unlikely outcome.
- Regulation and Transparency: Parimutuel systems are often regulated, ensuring transparency in payouts and fair treatment for all participants.
- Encourages Responsible Betting: Since odds are based on the total amount wagered, it discourages excessive betting.
Disadvantages of Parimutuel Betting
Parimutuel betting also comes with some disadvantages.
Here are some of them:
- Lower Predictability: It can be harder to predict potential winnings in parimutuel systems because payouts are determined by the final pool size, which is influenced by the total bets placed.
- Complexity: If you are a newcomer, understanding how parimutuel systems work can be more complex than fixed-odds betting.
- Smaller Payouts for Popular Events: In highly popular events where many people bet on the favourite, the payouts for winning bets can be smaller due to the high number of winners sharing the pool.