How Parimutuel Betting Came About

The process of pari-mutuel betting gained popularity since it multiplied the money according to the total money in the pool. Pools nowadays contain amount in millions of dollars. This proves lucrative to the betting company since the commission depends on the total amount and the pay is devoid of any direct relationship with the outcome. In simple words, be it any outcome, the company got its commission.

The parimutuel betting was invented by Joseph Oller in 1867. Since this involved a lot of calculation requiring accurate results, a mechanical calculator was invented to do the process automatically, known as the totalisator, and the earliest installed in Auckland, New Zealand in the 1913.

The bets placed were of different types, where the person placing the bet had various choices to make. He could select the horse that would win the race, or select the horse that would come first or second. Exact predictions could also be made as to which would come first and which the second. They were also made to bet on a series of races and the money was accumulated for each win.

The specialty of parimutuel gambling is that a person betting was doing so against other gamblers rather than the house like in professional gambling. By handicapping a skilled person in betting could win many races together by investing in the profitable pool. But the risks and the losses were huge in this form of betting since independent bookmarkers always gave a smaller take. Unfortunately, they are banned in many countries restricting the use of parimutuel betting with this form being more professional and legal.