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Pari-Mutuel Revenues

What is 'Pari-Mutuel Revenues'

The income a gaming company earns from customers' mutual betting activities, most commonly on horse racing. Churchill Downs is an example of a company that achieves a significant percentage of its earnings from pari-mutuel revenues. In addition to pari-mutuel revenues, gaming companies may also earn income from other types of gambling, like online poker and casino games.

Explaining 'Pari-Mutuel Revenues'

In pari-mutuel wagering, the top three winning bettors have their bets pooled and share the earnings. Rather than betting against the house, the players bet against each other. Success depends on a combination of luck, experience and the ability to stick to one's overall strategy in the face of changing emotions. The rate of return on winning plays that allows one to earn a profit after factoring in losing plays, transaction costs and breakage (the rounding down of winning bets to the nearest dime or nickel) is called the "take."


Further Reading


Has riverboat gambling reduced state lottery revenue?
journals.sagepub.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

Lottery effects on pari-mutuel tax revenuesLottery effects on pari-mutuel tax revenues
www.jstor.org [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

Gambling on an alternative revenue source: The impact of riverboat gambling on the charitable gambling component of nonprofit financesGambling on an alternative revenue source: The impact of riverboat gambling on the charitable gambling component of nonprofit finances
onlinelibrary.wiley.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

A note on the changing incidence of state lottery financeA note on the changing incidence of state lottery finance
search.proquest.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

The political economy of gambling regulationThe political economy of gambling regulation
onlinelibrary.wiley.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

Income inequality and gambling: a panel study in the United States (1980–1997)Income inequality and gambling: a panel study in the United States (1980–1997)
www.tandfonline.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

State lottery revenue: The importance of game characteristicsState lottery revenue: The importance of game characteristics
journals.sagepub.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

An analysis of pari-mutuel racing's contributions to the South Dakota tourist industry and to public finance in the stateAn analysis of pari-mutuel racing's contributions to the South Dakota tourist industry and to public finance in the state
openprairie.sdstate.edu [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

The effects of state lotteries on the pari-mutuel industryThe effects of state lotteries on the pari-mutuel industry
link.springer.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …

The demand for slot machine and pari-mutuel horse race wagering at a racetrack-casinoThe demand for slot machine and pari-mutuel horse race wagering at a racetrack-casino
www.tandfonline.com [PDF]
… Incidence across individual households within a state may differ from the results reported here for revenue responsiveness to aggregate income per capita measured across states … 1989. Lottery effects on pari-mutuel tax revenues. Na- tional Tax Journal 42:89-93 …



Q&A About Pari-Mutuel Revenues


Who has to share the earnings in pari-mutuel wagering?

The top three winning bettors have their bets pooled and share the earnings.

How can you make sure that your business will be profitable even if you lose some money here or there due to transactions costs or breakage (rounding up)?

You can make sure your business will be profitable even if you lose some money here or there due to transactions costs or breakage (rounding up) by making sure

What is the definition of Pari-Mutuel Revenues?

The income a gaming company earns from customers' mutual betting activities, most commonly on horse racing.

What are some other ways that gaming companies may earn income?

Gaming companies may also earn income from other types of gambling like online poker and casino games.

How does success depend on luck, experience and sticking to one's overall strategy in the face of changing emotions?

Success depends on a combination of luck, experience and the ability to stick to one's overall strategy in the face of changing emotions.

Where does Churchill Downs earn a significant percentage of its earnings from?

From pari-mutuel revenues.

What is take rate for winning plays?

The rate of return on winning plays that allows one to earn a profit after factoring in losing plays, transaction costs and breakage (the rounding down of winning bets to the nearest dime or nickel) is called "take"."

Why do you need breakage when dealing with money?

Breakage is used when dealing with money because it helps prevent people from making mistakes such as accidentally paying $1 instead of $100 due to human error or misreading numbers/figures written down by hand.