Calculate exact pari-mutuel payoffs based on pool size, takeout rate, and winning bet distribution. Understand how horse racing odds are determined.
Total amount wagered on this bet type
Total wagered on the winning selection
Track commission percentage
How much you bet on the winner
1. Track takes commission: Net Pool = Total × (1 - Takeout)
2. Calculate per-dollar payoff: Rate = Net Pool ÷ Winning Bets
3. Your payoff: Payoff = Rate × Your Bet
4. Apply breakage: Final = Round Down to Dime/Nickel
Pari-mutuel betting pools all wagers together. The track takes its cut (takeout), then divides the rest among winners proportionally. Your payoff depends on how much others bet, not fixed odds. This is why odds change until post time.
Unlike fixed-odds betting, pari-mutuel odds are determined by the betting public. Heavy betting on one horse lowers its payoff; overlooked horses pay more.
Before any payoffs, the track removes 15-25% for operations, purses, and taxes. This is the "house edge" in pari-mutuel betting.
The track takes its commission (takeout) from the total pool first. The remaining money is divided among winning ticket holders. If the pool is $100,000 with 15% takeout, $85,000 is available for winners.
Takeout is the track's commission, typically 15-25% depending on bet type and jurisdiction. Win/Place/Show usually have lower takeout (14-18%) than exotics (20-25%). This is taken before calculating payoffs.
Pool size and takeout rates vary by track. Larger pools offer more stable odds, while smaller pools can shift dramatically. Different states also have different takeout regulations.
Most tracks guarantee a minimum $2.10-$2.20 payout per $2 bet ("minus pool"). When favorites are heavily bet, the track sometimes pays more than the pool mathematically allows.