How is money made via pari-mutuel event wagering?
The process for making money on pari-mutuel games of skill and or event wagering is an easy one. Surfers simply locate the website and legally fund a betting account. When an account holder locates a game they want to bet on they login to their account, make their bet, and hope for the best. Each bet made results in a commission for the state in the form of taxation and to the operator in the form of a vig or fixed fee.
Commissions earned on pari-mutuel wagering follow a guideline set by state or federal governmental agencies. For example: The State of Nevada allows a maximum13 percent commission for pari-mutuel event wagering. Two percent goes to the state and a net 11% goes to the operator. Every sportsbook in Nevada charge at least 10% fee or vig for betting on skill based games or events.
Nevada Regulation 26.060:
- The licensee shall be entitled to deduct from a gross pool a commission not to exceed 13 percent of the pool.
- From the commission deducted, the licensee shall pay to the Nevada Gaming Commission a tax equal to 2 percent of the sum of all pari-mutuel wagers. The tax due shall not be reduced by minus pools or otherwise.
3. The above tax as imposed by NRS 464.040(2) shall be paid quarterly on or before the last
day of the first month of the next succeeding calendar quarter and accompanied with a report of all taxable receipts for the quarter.
In terms of annual games of skill or pari-mutuel event wagering in the United States the estimated aggregate total is around a Trillion dollars per year. The state of Nevada legally accepts all event betting at every Casino. Sport betting is 10 times larger in dollar terms than all combined online and land-based Poker. Sports betting is HUGE. Any company with the right to offer sports betting in the United States will become an economic powerhouse – that’s how big this market is.
There are two existing ways to be one of a few legal event and sports wagering offerings in the United States and every Tribal jurisdiction throughout North America:
1. Obtain a Nevada pari-mutuel systems operator licensee and offer sports / event wagering to other states that have intrastate compacts with Nevada for sports / event wagering.
2. Negotiate strategic partnerships with Native American Tribes so as to run the pari-mutuel wagering as Class III Gaming. It is conceivable that pari-mutuel wagering will become the default sports / event wagering system in every state in the United States.
It is unknown why U. S. legislators have neglected to generate tax revenues from the most reliable income source on the Internet: Sports and Event wagering!
According to Legal Sports Report dot com all US event wagering using a smartphone app increased over 100% year over year. The numbers go way up during the football season which indicates heavy wagering on NFL games during the season.
So, just how many people are betting on sports in legal markets?
We know how much money people are betting; it’s a lot of betting in states like New Jersey. But we don’t know much about how many people are betting.
One company that is in a position to see and now that is GeoComply, which provides geolocation services for many legal online sportsbooks in the US. As such, GeoComply tracks every session that takes place with the sportsbook apps that partner with GeoComply.
CEO David Briggs talked briefly with Legal Sports Report to help clarify how many people are betting in some of the states that have legal online betting in the US. (GeoComply just announced the launch of IDComply, a know-your-customer solution that dovetails with its existing geolocation compliance product.)
GeoComply could not divulge exact numbers but could give us a sense of how many people are betting in new jurisdictions on a comparative basis.
How many people are betting?
Legal Sports Report: There has been a lot of speculation as to the growth that the interactive sports betting market would see in the first month of NFL. What have you seen?
Briggs: Well, I think the hype seems to be warranted. In New Jersey alone, we are seeing a year-over-year increase in mobile sports betting sessions of more than 100%.
Pennsylvania is quickly ramping up after launch this summer. On a recent Sunday with NFL games (Oct. 6), Pennsylvania hit almost half of New Jersey’s volume for mobile sports betting. It will be interesting to see how the numbers stack up in the next few weeks.
LSR: What about the other states?
Briggs: As per the chart below, on Sunday, Oct. 6, the split between the four states was: New Jersey at 58.9%, Pennsylvania at 31.4%, Indiana at 7% and West Virginia at 2.8%. (In other words, almost three-fifths of online betting sessions outside of Nevada took place in NJ.)
The iPhone issue for betting?
LSR: How has the lack of iPhone apps for sports betting hurt the Pennsylvania operators who are not able to offer native apps there?
Briggs: To be honest, there has been an impact, but not too much. Most states have around 70% of users on iPhones. However, in Pennsylvania, it is trending a couple of percent below that which is not too bad. As per the chart below, you can see the split by device in each environment on that Sunday. (Green is iOS devices, blue is Android devices and purple is the plug-in for desktops.)
Wagering on apps on smartphones for live events and for all games of skill is the future of online event wagering. Parimutuel LLC has patents and software development for exactly this segment of the online event wagering industry. The National Gambling Impact Study Commission estimates that $380 billion is wagered each year on football through offshore accounts and illegal betting. Given a vig or commission of 10% as a minimum fee starting point one can easily estimate the total of illegal vig at around $19 billion dollars (that assumes half the wagers are losing bets). The annual commission on offshore illegal betting therefore is around $19 billion dollars. This is illegal revenue that is never taxed.
In theory if one entity had the legal right to take bets on NFL games the amount wagered would exceed the estimated $380 billion dollars per year level. This is not the total commission, rather it is the handle that would be taken away from offshore corporations and underground illegal sports betting operations. Based on a 10% commission rate the total handle could generate up to $38 billion dollars in total commissions.
The only way to eliminate illegal and offshore football betting is to legalize, regulate and tax it.
Parimutuel LLC has prepared five year estimates for other non football sporting events such as pari-mutuel auto racing (NASCAR and Formula One); pari-mutuel golf (including all PGA, European, and Asian events); and pari-mutuel poker (betting on all World Series of Poker events and other worldwide online poker tournaments. The total estimated commissions fall between $138 million and $277 million for these three events alone over the next five years. If one were to include the World Cup of Soccer, the Olympic Winter and Summer events, football, baseball, basketball, soccer, hockey and other sporting and non sporting events, games, contests, activities, and competitive tournaments, then earning $1 billion dollars a year in commissions seems realistic. Over the next five years there will be over $350 billion dollars in commissions paid out from sports wagering in the U.S. alone. In order to earn $1 billion in commissions over the same five year period one would need to capture less than one third of one percent of the sport wagering market in the United States.
The key is to be a legal operator of event wagering in the United States.
Harry Platis, founder of Pari-mutuel LLC, has been communicating with multiple Native American Tribes to allow pari-mutuel wagering on their lands as a Class III game. Pari-mutuel wagering is a game changer in terms of the legalization of pari-mutuel event wagering in the United States. Pari-mutuel sport wagering would provide a platform for betting on all games, contests, activities, events, and competitive tournaments.
What is the goal and purpose of licensing pari-mutuel event wagering?
Is pari-mutuel event wagering about the bettors?
Is pari-mutuel event wagering about creating additional tax revenues for the state(s)?
Is pari-mutuel event wagering about reducing risk to the operator(s)?
What is the real goal and purpose of licensing pari-mutuel event wagering?
Pari-mutuel event wagering is all of the above.
Pari-mutuel wagering is about best odds for bettors without risk to the operator. The pari-mutuel event wagering technology is about sport / event wagering entertainment and smart phone technology.
The sport betting industry wins when the bettor’s odds improve across all events.
The sport betting industry wins when all bettors pay commission on a pool. The total commissions are based on the totality of bets made.
The sport betting industry wins when there is no risk to running a pool or setting up a wager on any event, game, activity, contest or competitive tournament.
The sport betting industry wins when long shot events pay long shot odds.
The sport betting industry wins when the event wagering industry is legalized, regulated, and taxed.
The sport betting industry wins when bettors have an easy time depositing on account and an easier time collecting their winnings.
The sport betting industry wins when event wagering is about entertainment and fun for both patrons and operators.
These are the objectives behind the pari-mutuel event wagering project.
The basic premise is that bettors will find the lowest cost vig event wagering app or website. We suggest that our live Pari-mutuel event wagering website and app will convert search and keyword based traffic at one in two or one in three to a real money account. One out of two search traffic visitors will open an account; (a 50% conversion of traffic to a real money account). The variable advertising cost for each real money account will be no more than $0.70. Two visitors per real money account at $0.35 per visitor equal $0.70 per new money account. The figure is ridiculously low. If the net commission is 3.5% each new account needs to wager $20.00 for the variable advertising costs to be covered. That is the magic number. There is no risk to the operator as soon as every new account bets $20.
The above time figure represents the variable cost breakeven point at a 3.5% net vig to the operator. The possibility exists to use a commission rate of 10% or more. If a 10% fee is the vig charged on a pari-mutuel pool then at $0.35 per visitor and at a 50% conversion to a real money account the variable advertising cost per new player is $0.70. So with that potential variable advertising cost the operator covers all variable advertising costs at $7.00 wagered for each new real money player. Even at a cost of $2 or $3 per new real money account the system is extremely profitable.
Why is pari-mutuel event wagering is so profitable? The pari-mutuel event wagering system is simply an online service and not a product-based offering. There is no inventory; nothing to ship and nothing to stock in a warehouse. The action is what’s for sale on a pari-mutuel event wagering website. In other words, pari-mutuel wagering is the only wagering system that can do live betting with real live odds on each actionable event since we don’t have any profit or loss on any specific wager (even live wagering).
Everyone wants to be entertained. Everyone likes live wagering. Can I bet on the next play or the next shot or the next pitch? Yes you can. You certainly can with our pari-mutuel wagering system since we have the truest odds in the world. So yes you can enjoy the thrill of wagering on a live event game before and during the event. Wagering on an event, game, contest, activity, or competitive tournament is fun and exciting. Pools can be created for any event, game, contest, activity, or competitive or tournament BEFORE and DURING the event. The only restriction is the imagination of the operator and the willingness of the betting public to bet on that next pitch.
The magic behind reliable monetization is to provide a large list of potential pools so bettors can immediately have choices to wager on whatever they want. The majority of event wagers are NOT made just a few minutes before the game or event. The majority of event wagers are made during the event. It’s called LIVE wagering. Only pari-mutuel wagering can accommodate the live wagering scene with incredible variety and without any chance of losing a dime or having the need to fix or rig an event to make a dime. In the UK or Australia many people bet on their smart phones. Ads run during sporting events to bet the next half of the match, the next pitch of the cricket ball or the next corner kick in soccer. The action leads to live betting situations within every event. People want to bet on something that happens in the next minute. Pari-mutuel wagering is the perfect outlet for live wagering. Pari-mutuel pools can be created instantly and there is no risk in any pool to the operator. This type of live action takes event wagering to a total new instant gratification level of fun and entertainment. Thanks to smart phones you can now bet on an event seconds before it happens. This is the key to our system.
It is defraud proof.
And it is rig proof (from our perspective).
People look for the type of sport or event wager that will make them feel happy and entertained. On Sunday afternoon one hundred million Americans watch NFL games on television. Viewers appreciate a little action to make watching / streaming / listening to their favorite team more fun. It’s not JUST about winning – it’s about action. Pari-mutuel wagering is a numbers game that provides betting action to a target audience for a small fee – that’s the entire monetization idea behind pari-mutuel sport / event wagering.
Harry Platis, our founder and majority owner in Parimutuel LLC wants to let people enjoy wagering small amounts on events that have huge odds – like picking every winner on a Sunday NFL ticket, or picking every game correctly in the March Madness basketball tournament.
From a business point of view pari-mutuel wagering fits perfectly into this instant odds making event wagering. The pools are automatically created for live betting and the bettors have the chance to wager on a small part of a live sporting event instantly via their cell phone.
Operators want to know how often and the amount the average user wagers on a live event vs. an ongoing event. It is this statistical analysis of usage patterns that generates cash flow to the operator. As soon as it is possible to determine how much the average bettor wagers on each event and how many times a month the average bettor places a bet then the operator can determine the margin required to achieve a given ROI. It is as easy as 1, 2, 3.
How does sports wagering (current model) work?
Sports betting is illegal throughout most of the United States, common throughout much of Europe.
The current model as defined by Nevada sports books allows a non-participant of a specific sporting event to bet on the outcome of that sporting event; many times the bettor will bet $110 in order to win $100. A certain number of points will be attributed to the favored team. The favored team must win by more than those designated points in order for wagers on that team to be winning wagers. The points are used to offset any advantage one team may have over another.
It’s difficult to determine how much money is bet on sports in the United States since the majority of it is done illegally. We suggest a conservative estimate of between $900 and $950 billion annually, which is actually a small percent of the American GDP (under 5% of total economic activity).
As a result of virtually no jurisdictional laws regarding Internet gambling within the United States, no legal operator or supplier benefits from the gaming activity in the U.S. market.
The ability of tribal gaming operators to participate in Internet gambling is legally uncertain. Currently proposed legislation offers the possibility of validating certain forms of Internet gambling. The new laws will ultimately benefit the NIGA and its member nations and tribes, as well as the industry as a whole. The pending legislation promises to establish licensing and regulatory standards. It addresses such industry concerns as money laundering, underage and problem gambling and generates significant tax revenue for active Gaming Native American Tribes and federal and state governments.
H2 Gambling Capital projects global Internet gambling gross revenue to be $100 billion in 2020. This represents about 3 percent of total global gambling gross revenue, a 20 percent
increase over 2018. Sport and race betting represents the largest segment of Internet gambling, i.e. 39 percent of the market. Casino gaming and poker account for about 20 percent of gross global Internet gambling revenue. Bingo and other games follow close behind.
The future growth of Internet gambling appears robust. Internet gambling penetration rates significantly lag overall Internet utilization penetration rates. Countries around the world move toward greater liberalization, legalization, taxation and regulation. Europe accounts for 44 percent of global online revenue, followed by Asia with 25 percent and North America with 24 percent. Prior to the passage of the UIGEA in 2006, the United States accounted for an estimated 50 percent of worldwide Internet gambling revenue. There is strong reason to believe that domestic contributions will again approach that 50% level within a few years when Internet gambling resumes in the United States.
According to H2 Gambling Capital, U.S. legalization of Internet gambling is projected to generate more than $30 billion in gross gaming revenue within a year, rising to $90 billion within five years. The inclusion of sport betting would raise these estimates to $70 billion the first year and increase to $125 billion by year five. Five million Americans currently play online poker and continue to bet on sporting events over the Internet even though it is illegal. When Internet gaming is legalized it is estimated that as many as 190 million Americans will place a wager over the Net in the first year. Annual global event wagering is in the $1.44 – $6 Trillion dollar range. When Americans are legally allowed to wager on events online they will do so to the tune of $1 Trillion dollars the first year. It’s common knowledge that people love the thrill of wagering on live sports.
Recently residents in the UK started live wagering over smart phones. In the last year Bet365 handled over £20,000,000,000 in total bets. Bet365 promotes live betting on all kinds of action. If you live in the UK you can bet on the next kick of the soccer ball, the next toss of the dart … or the speed of the next serve at Wimbledon. All this action can be bet on from your cellular phone with instantaneous results. Bettors want instant action with results within a few seconds! This is where the market is going. This is why pari-mutuel event wagering is the ticket to the future for all event wagering. No program can handle instant wagering like pari-mutuel wagering. Pari-mutuel wagering is riskless to the operator.
Placing a bet can be a confusing affair. Sports books have their own lingo, and the systems vary. Figuring out how to bet smart enough to make money is entirely another matter.
How are the odds determined?
Who sets the line?
What percentage of the time do you need to win to break even (or to make money)?
These are all important questions that need answering prior to making a single wager.
Below is a description of how pari-mutuel sport/event betting works; and how odds are created in the traditional, Nevada book making system. The important elements of betting and odds making are explained. Once you understand how sport betting works you will appreciate why it is so popular in the United States.
Sports Betting Basics
Different sports have separate systems for odds making and betting. There are sometimes different methods used for the same sport, depending on what kind of game the bettor wants to play. To understand any of these systems, you first must understand the jargon.
Action – Action is simply betting activity. Phrases such as “I want in on the action” or “show me where the action is” come from this term. Since betting on sports is illegal in many places, you cannot look up your local bookie in the telephone book yellow pages. Where does one go for a little pool action?
Handicap – In sports betting “to handicap” is to give one team or player a point’s advantage in order to level the betting field. In pool one player will have one or more balls advantage prior to the game starting. That is the handicap.
Handle – The handle is the total amount of money wagered. The Super Bowl is the biggest wagering event of the year in sports betting circles. This one sporting event will generate the biggest handle of the year for most legal and illegal bookies in the United States.
Sports book – An establishment that takes bets, also known as a book. An individual who takes bets is known as a bookie.
Juice – This is the percentage of all bets taken by the bookie as profit. The juice is the commission on each bet. The juice is also known as the vig, short for vigorish. Sometimes bookies take a straight percentage of the handle, but more often the vig is figured into the odds. In pari-mutuel wagering the vig is taken out of the pool so both the winner and the loser pays vig on each bet. In current Nevada sports betting only the loser pays the vig or commission. The winner gets all the prepaid vig back when paid off.
The spread – The point spread is used in high-scoring sports like football and basketball. It is basically a handicap used to make all games competitive in the eyes of bettors. The spread gives one team an advantage of a few points. For Football games the standard notation for the point spread shows the favored team first, followed by a negative number (the actual spread). The home team is shown in capital letters. If Buffalo was playing against Green Bay in Green Bay, and they were favored to win by seven points, it would look like this;
Green Bay (-4) vs. KANSAS CITY.
If someone bets on Green Bay to win, Green Bay would actually have to win by more than four points for the bet to pay off. It’s as if Kansas City were given a four-point lead at the start of the game. So Kansas City could lose the game by 3 points and whoever bet on GREEN BAY would lose their bet.
The money line – In sports like baseball, scoring isn’t high enough to use a point spread. The money line is used instead. Pari-mutuel sport wagering pools are PURE money lines.
In Baseball money lines sometimes you will read 120 for one team vs. another team, which means you need to bet $120 on one team to win $100. Online sports books use a decimal system of 1.20, which means the same thing. So if the Red Sox were playing the Yankees and if you bet on the favored team (the Red Sox), and the line was 1.20 you would have to bet $1.20 for every $1 you want to win. If you bet on the underdog Yankees you would have to bet $1 for every $1.10 you want to win. This is known as the dime line, because ten cents separate the favorite from the underdog. Most bookies offer a dime line although it can increase to a 20 cent line or greater if one team is heavily favored.
Think of the money line as a simple pricing system. You want to win a certain amount of money on your bet. Chances are greater that the favored team will win the game. It costs more to bet on the favorite to win that amount than it costs to bet on the underdog to make the same amount (or more).
If you place your bet on the favored team at 120 or 1.20 you will have to pay the bookie $120 and if you win you will get back the $120 and $100 or $220 for your $120 bet. If however at the same money line you bet the underdog then you would only bet $100 in order to get back $210.
Pick’em – Sometimes money line games will be listed as “pick” or “pick’em.” This means that the teams are considered equal, and the line on both teams is -1.10. Betting on either team requires a $110 bet in order to win $100. Great line for the sports book – terrible line for the bettors.
Pools, cards, and parlays – A parlay is a combination bet. Instead of making five separate bets on five different games the bettor places a single parlay bet hoping he or she can predict the outcome of all five games. If any one of the games is a loser, the entire parlay is a loser. The payout is better for parlays, because the odds of successfully picking multiple winners are much tougher to beat. Most people are familiar with parlays through office betting pools or football cards. If you’ve ever paid $5 to select your winners from a list of that week’s football games (sometimes using the spread, sometimes using the straight scores) in hopes of winning the weekly prize, then you have made an informal parlay bet.
Office pools don’t usually involve actual bookies beyond the person who organizes the pool, and no one takes juice from the pool in your office. All the money is distributed to the winner or winners.
Odds maker vs. Bookie
What’s the difference between an odds maker and a bookie? A bookie’s job is purely mechanical. He gets the line from Vegas or another source and he then offers bets at those odds, then collects money from the losers. He pays out to the winners and keeps the vig. Odds makers don’t actually take bets; they study the games and set the lines. Bookies often adjust the spreads for their games, so they do a little odds making. Odds makers work for casinos that operate sports books and take bets. People have been informally betting on sports for about as long as there have been sporting events.
Organized sports betting took off in the United States at the horse racetracks that sprang up in the 1800s. Betting really caught on in the early 1900s when the pastime became more accessible to the middle and lower classes. At first, an auction system was used. Bettors bid on a lot that represented one horse in a given race. In this system the bettors themselves automatically set the odds. Each bettor was vying for the full pot and whoever had the lot for the winning horse got it. Horses that were highly favored to win were auctioned off at much higher prices, since the holder of that lot had the best chance of winning the pot. Lower-rated horses allowed bettors to take a chance at the pot for a smaller bet with a reduced chance of winning.
A similar system was used in other
sporting events such as boxing and early football games. It was hard for odds
makers to set the odds accurately. When a long-shot team came up with an upset
win, bookies lost a bundle. Around World War II, the point spread concept was
developed. The concept of point spread
betting on sports made all sporting events even more popular. The broadcast
of sports on TV kept the cycle going. Sports became increasingly popular
making betting more popular stimulating more betting, and so on, and so on.
Fast forward to 2019 picture a change in the landscape from straight line odds making to pari-mutuel sport / event wagering in the state of Nevada and beyond. Live sports and event wagering can now become a riskless venture to the operator and the bettor gets the best odds going for every single bet. There is absolutely no risk on any pari-mutuel pool so the future of all instantaneous or prolonged sports betting rests in pari-mutuel sport / event wagering. Pari-mutuel wagering is simply the only way to go. This is particularly true for live wagering on pool matches or tournaments or cash games.
The pari-mutuel betting system encourages micro betting or small amount betting, because the pools allow for the smallest size bet all the way down to a penny. Instant betting on live events are exciting and in a pari-mutuel context they can provide some very interesting odds compared to the fixed odds betting for live events. The current sports book betting system NEVER provides the bettors the “best of it” in terms of expected odds for any live event. Pari-mutuel live wagering systems will change that so the betting public will get very close to pure handicapping or wagering odds. Whenever there is more risk to the operator the betting odds bear no resemblance to expected odds.
In order to give the bettor the best of it compared to the current system and to eliminate all risk to the operator, all sports books will have to adopt the pari-mutuel sport wagering system.
What is pari-mutuel wagering?
In simple terms pari-mutuel wagering is the formation of pools of bets on an event, activity, or tournament. I.E. horse racing pools (win, place, show) wherein the winners of each individual pool are paid out of that pool after deducting administrative fees and taxes.
Definition from Wikipedia: Pari-mutuel Betting (from the French: Pari Mutuel or mutual betting) is a betting system in which all bets of a particular type are placed together in a pool; taxes and the “house-take” or “vig” are removed, and payoff odds are calculated by sharing the pool among all winning bets. In some countries it is known as the Tote after the totalizator which calculates and displays bets already made.
Pari-mutuel Wagering is used in gambling on horse races, greyhound races, Jai Alai, and all sporting events of relatively short duration in which participants finish in a ranked order. A modified pari-mutuel system is also used in all lottery draws.
Pari-mutuel betting differs from fixed-odds betting in that the final payout is not determined until the pool is closed. In fixed odds betting, the payout is agreed at the time the bet is made.
Pari-mutuel gambling is frequently state-regulated, and offered in many places where gambling is otherwise illegal. Pari-mutuel gambling is often also offered at “off track” facilities, where players may bet on the events without actually being present to observe them in person.
In the USA pari-mutuel wagering on horse races is legal in a racetrack, an off track betting parlor or over the Internet.
Pari-mutuel wagering is about offering several different types of wagers.
Pari-mutuel sport / event wagering is about betting on pari-mutuel events, competitive tournaments, contests, games, and activities. There is no risk to the operator for any bet made. The pari-mutuel sport / event wagering system is legal.
The operator does not profit directly from the result of any event, tournament, game, activity, or contest, rather they earn a small commission for managing the pools and supplying the technology across all electronic platforms. The difference between the current wagering system and the patented pari-mutuel web wagering system is that the patented pari-mutuel systems do not require the operator to have any skin in the game. There is no risk on any bet. Every pool and all odds are generated from wagers rather than from a line, whose objective is to maximize operational profits.
Another big advantage of the pari-mutuel sport / event wagering system compared to the current system is that all bettors pay a commission. Both winners and losers pay a commission using the pari-mutuel system, whereas the current system collects a commission or vig from the losers.
The key to the pari-mutuel wagering system’s success in a market dominated by offshore unregulated corporations is the following:
1. The pari-mutuel wagering system provides greater odds to bettors.
2. The commission payment process is explained in a pari-mutuel wagering system.
3. The pari-mutuel wagering system provides simple and effective deposit and payment terms for account wagering 24/7.
The pari-mutuel wagering concept is way ahead of the curve on all three fronts. The pari-mutuel event wagering system ensures the best odds for every event. How? The pari-mutuel wagering system has ZERO skin in the game. The odds are always better than the odds for a sports book that risks their own money on any sporting event.
There is an educational process for pari-mutuel sport and event wagering. Bettors are sometimes told that it is not fair to bet into a pari-mutuel sporting event pool since the odds are expected odds and not final odds determined when the bet is made. Only after the pool closes are the odds final. The assumption is that the odds to the bettor will fall after the pool closes. This is not true. Betting on horses has followed the pari-mutuel event wagering system from its inception. There has never been a single complaint made at the Kentucky Derby or any other horse racing event. This explains the validity of true odds vs. expected odds before the pool is closed. It is a simple mathematical formula that substantiates pari-mutuel sport / event wagering provides the best return for the wagering public.
The legalization of pari-mutuel wagering will result in a lower cost for depositing and withdrawing funds on account. The results will be reliable and fast deposit / payment terms and conditions for every account holder. This is not the case with the current offshore unregulated sports books who churn through merchant accounts when they are flagged for illegal activity. The current offshore unregulated system is a house of cards ready to fall.
Pari-mutuel sport and event wagering is bigger than most people think. It is legal in many countries, although presently not in every state within the United States.
The purpose of this document is to point out how much money is made via illegal and offshore gambling businesses catering to American’s desire to bet on sporting events. In 2018 over $500 billion dollars will be wagered on the National Football League in the United States. This represents an excess of over $495 billion dollars presently bet illegally or through offshore unregulated gambling entities. The commissions for these illegal or offshore wagers are in excess of $20 billion dollars a year.
The untaxed and unregulated earnings going to offshore or illegal entities could instead be a part of a taxed and regulated pari-mutuel sport and event wagering industry. Therefore pari-mutuel sport and event wagering systems is a positive wagering service for bettors, state governments, and operators. How so? The bettors get the best odds for every sporting or event wager; the state gets a positive flow of new tax revenues; and finally the operator has a riskless venture for sport and event wagering that makes money, serves the bettor and the state.
The use of technology to bring pari-mutuel sport and event wagering to the user is as simple as pressing the on button of your smart phone. It would not take long for smart phone pari-mutuel wagering on sports and events to rise to the top of the pack of regulated sports and event wagering systems in the United States. The primary reason pari-mutuel wagering system rises above all others is due to its simplicity, and to the wagering benefits for all bettors. Provide the bettors a fair shake and they will use the pari-mutuel wagering system in great numbers. Users are looking for an edge that will provide additional return on their bet, and therefore give more entertainment value. When pari-mutuel operators provide the best wagering system to the users there is only one expected result – happy users.
It is important to note that this monetization overview of pari-mutuel sport and event wagering does not include any calculation of commissions from offshore sports or event wagering. Although this document implies there are plenty of offshore sports books taking action from Americans, we refer only to U.S., not foreign action. Be aware that offshore sports and event wagering currently handle billions of dollars of sport and event wagering for worldwide events wagered on by foreigners. This is another source of potential revenue not covered within this pari-mutuel monetization overview.
Pari-mutuel sport and event wagering provide the best odds for bettors, the best revenue potential for tax purposes, operator profitability, with no risk to the pool operators. There is no house action on any pari-mutuel wagering event.
For more information please contact Harry Platis @ 206-999-6655.