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?
- Why Is Pari-mutuel Betting Legal When other Forms of Gambling Are Not?
- What Are Some of the Common Kinds of Pari-mutuel Betting?
- How Does Pari-mutuel Betting Work?
- What Kinds of Bets Can I Make?
- Can I Bet on a Race that Is Taking Place in a Different State?
- Should I Consult a Lawyer?
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.
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.
The most common kinds of pari-mutuel betting are:
- Greyhound racing
- Jai Alai
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.
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
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.
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.