Archive for August, 2009

The origin of parimutuel

A very popular form of sports betting is the so-called parimutuel format, from the French expression “pari mutuel” which means a common bet.

Unlike other sports venues where the bookmaker is in charge of offering odds for various types of bets, hedging his risk with a spread called the “vigorish” (vig in short), parimutuel does not involve a bookmaker.

And unlike fixed-odds betting where you know exactly how much you will make if you win your bet, as this was determined when you placed the bet with the bookmaker, in parimutuel it is only after all bets are closed that the odds are known. As the bets are pooled together and after taxes and a house vig are deducted, the relative amounts bets on each outcome determine the payouts.

Parimutuel was invented in France in 1867 by Joseph Oller.  Initially considered illegal gambling by the French Government, it is only in 1891 that parimutuel became the official form of horse race betting in France, rapidly spreading to numerous horse racing venues all over the world. As it was thought that without a bookmaker able to manipulate the odds, the system was fairer.

The bookmaker Joseph Oller was a very inventive man and even though he has not benefited from his creation in sports betting, he was forced to seek other business ventures in which he became very successful: impresario. Oller opened numerous auditoriums and venues in Paris, of which the most famous are the music-hall Paris Olympia and the famous Moulin Rouge.

Parimutuel is the state-regulated form of  sports betting in many countries such as France, and it is interesting to see how the legal system has found a way to collect taxes by authorizing one form of sports betting and banning another.

The French have invented many things and another one is the more recent form of parimutuel, where the betting consists in finding the first 3, 4 or more horses crossing the finish line.

The tiercé was created in 1954 by André Carrus, who was the directeur of PMU, Pari Mutuel Urbain, the company managing the French horse race betting. The goal was to find the three fastest horses (tierce stands for three) in the right order or in disorder. Later came out the Quarté for four horses and the Quinté + for five.

Tiercé took France by storm and to this day there is no village in the hexagone where the elders do not talk about their bets on Sunday morning at the village café. This also spread out all over the world.

To me, people who are trying to ban sports betting are idiots who do not understand that people like to make bets. Regulate it, do not make it a crime.