Pari-mutuel Wagering

The concept of pari-mutuel wagering sets horseracing apart from casino wagering.

Pari-mutuel wagering originated in Paris, France, in the 1800’s. The owner of a perfume shop developed the idea of pooling like wagers made on the same race and then distributing payouts based on the amount wagered on the horses. For his services, he extracted a small percentage of each pool. The method was originally known as Paris mutuel wagering but over time has been shortened to pari-mutuel wagering.

Simply defined, pari-mutuel wagering means "we wager among ourselves."

When you go to a casino, you wager against the house: you lose, the house wins, and vice versa. When you go to the racetrack, you wager against those fans that wager into the same pari-mutuel pools as you do. If you win, it isn’t the track’s money you collect, it’s the money from the fans that wagered against you. The track has no financial interest in which horses win or lose, or which fans win or lose, because the track is required to pay out the net pools after each race.