While gambling on major casino games, except poker, the players are wagering against the house. In games that require betting on the horse or a dog race, you are not betting against the house. In such situations, you are placing a pari-mutuel bet and are in reality betting against the other players in the game.

All the money that is wagered enters a large pot. The winners in the event divide the total money that is bet on the event, excluding the tax deductions and race expenses. The money taken out through this could be compared to the usual pot in the poker game that is played in the card room. However, unlike the smaller rakes in poker, the pari-mutuel bet can sum up to at least 15% - 20% of the total prize money.

A majority of the players who visit the track or the off-track facilities do not have the knowledge about the history behind pari-mutuel bets. With the introduction of the modern day facilities, the gambling calculations are displayed on the large ‘tote’ boards and hence the players think that is a newer form of wagering. But the existence of pari-mutuel betting goes back a few decades.

Pari-mutuel is a term used for the phenomenon of betting against each other. Its discovery is credited to a French perfume shop owner known as Pierre Oller. He began using this form of betting to sell tickets on a horse race and the prize pool was split amongst the winners in the year 1865. Such a way, Pierre would keep about 5% of the winnings for the race expenses and divide the rest amongst the winners. This wagering system was used by a lot of racing parks and was finally legalised by the French government.