Tote betting is a form of pari-mutuel betting whereby all bets of the same type go into a pool.
The odds fluctuate according to how much money wagered on each outcome. The dividend for a tote bet is determined by dividing the total win pool by the number of dollars placed on that outcome.
Tote betting in Australia can is available with any of the three totalisator operators:
Tote betting is often referred to as pari-mutuel betting. It differs from fixed odds betting as the bettor places the bet with a totalisator (tote), and not a bookmaker. The tote, therefore, takes on no risk. They withdraw taxes and a margin from the total pool size before dividing the pool amongst winning bets. For punters, the final price of a selection is not known until betting on the event has ceased. Tote betting is most commonly associated with horse racing betting.
The example above shows how prices are determined under a pari-mutuel betting system.
Despite not being totalisator agencies, online bookmakers can offer tote betting to their customers by simply mirroring the price paid by the tote. Many operators offer Best Tote betting and Mid Tote betting to provide better value to their clientele. Tote betting is also an important component of Best of the Best and Top tote plus betting.
Exotic horse racing bets like trifectas and quaddies are also pari-mutuel bets. Again, bookmakers other than the TAB can offer these bet types to their customers by simply mirroring the dividends paid by the tote.
Tote betting is an essential cog in the online betting industry. The popularity of tote products and the revenue they generate for the horse racing industry is significant. As such, tote betting is available with the three national totes and all online betting agencies.