The parimutuel betting is the principle that all the issues wagered by the bettors is shared in a common ground and then redistributed to the winners in proportion to their stakes after deducting a proportional levy to finance:
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the remuneration of the racing organizing companies, races endowment and encouragement of horse breeding;
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the technical operator of betting;
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tax contributions.
Established in France in 1868 by Joseph Oller, it will be extensively developed in France and then adopted in the US, where it retains its French name, in Japan and in many countries on all continents. It now represents over 80% of the volume of bets recorded on horse racing in the world.
Parimutuel betting is opposed to fixed odds betting or bookmaking practiced particularly in the United Kingdom in addition to parimutuel betting. While bookmaker is practicing fixed odds betting, being interested in the outcome of the race, the operator of parimutuel betting is naturally independent. Parimutuel betting therefore provides the greatest ethical safeguards and transparency for played money.
Parimutuel betting and racing
Until the 1900s, corresponding roughly to the rise of Olympic Sports (the first celebration will be held in Athens in 1896) and even in the inter-war years, horse racing was the sport par excellence. A bourgeois sport, certainly, as well as hunting or sailing for example, but public: it is not conceived to organize indoor races. The public and the game inevitably accompanying such events. The gain in betting (including parimutuel betting ) can finance the entire industry. The remuneration of the races allows owners to expect modest return on their investment, at least to receive part of their investment. Without these benefits, all good horses would be concentrated in the hands of a super powerful stables.
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