Pari-mutuel betting is a form of gambling offered at certain types of sporting events, often races, in which competitors finish in a ranked order.

Is Pari-mutuel Betting Legal?

Pari-mutuel betting is one of the few forms of organized gambling that is legal in most states. However, there are some states that classify pari-mutuel betting as a form of illegal gambling. Before you place any bets, make sure you know what the law is in your state.

Why Is Pari-mutuel Betting Legal When other Forms of Gambling Are Not?

Pari-mutuel gambling differs from other common types of gambling in that you gamble against other gamblers rather than against the house. In pari-mutuel betting, all gamblers are on equal footing, there are no "house odds" that give one person or group an advantage over another. This fact distinguishes pari-mutuel betting from casino games and other forms of gambling, and makes it less susceptible to corruption and abuse.

What Are Some of the Common Kinds of Pari-mutuel Betting?

The most common kinds of pari-mutuel betting are:

  • Horseracing
  • Greyhound racing
  • Jai Alai

How Does Pari-mutuel Betting Work?

Pari-mutuel betting works by having all the money from bets of a particular kind pooled together. From this pool, taxes and a house ¿take¿ are removed and payoff odds are calculated from what’s left. The fewer correctly placed bets in the pool, the greater the payoff.

What Kinds of Bets Can I Make?

There are several different kinds of bets you can make on a pari-mutuel event. Each different type of bet goes in its own pool. Some of the common types of bets include:

  • Bet to win – You win if the competitor you bet on comes in first
  • Bet to place – You win if the competitor you bet on comes in either first or second
  • Bet to show – You win if the competitor you bet on comes in either first, second, or third
  • There are also "exotics" which are bets that are more difficult to win, but carry higher payoffs. These include:
    • Exacta -You win if you picked the first and second place finishers in order
    • Quinella – You win if you picket the first and second place finishers, but they don’t have to be in order
    • Trifecta – You win if you picked the first, second, and third place finishers in order

Can I Bet on a Race that Is Taking Place in a Different State?

Interstate pari-mutuel gambling is regulated by federal law. Most forms of interstate gambling are illegal but the Interstate Horseracing Act of 1978 allows interstate pari-mutuel wagering over the phone, over the internet, or through any other electronic communication as long as pari-mutuels are legal in both states. So, if you are in a state where pari-mutuel betting is legal and you wish to bet on a race being held in a different state that also permits pari-mutuel betting, you can bet on that race without violating federal laws related to interstate gambling.

Should I Consult a Lawyer?

If you have any questions about pari-mutuel betting you may want to contact a lawyer. An experienced business lawyer will be able to inform you of the applicable laws in your state and advise you on how to best protect your rights.