Parimutuel betting, also known as pool betting or tote betting, is a specific way for a betting institution to conduct its wagering operations. It is an alternative to fixed-odds betting sites and betting exchanges.
Instead of deciding on fixed odds, pool betting essentially allows all wagers placed on a specific event to be put in a big mutual pool of money. When the event starts, bets are closed and so is the pool. Once the outcome is known, the operator takes a small percentage of the pot as a fee, and then splits the pool between all the winners. Therefore, the final odds for each outcome are only known once the bets are closed.
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