Standard betting on sports, racing, or any other event, generally uses what is known as a fixed odds system. This means that the better will earn back a fixed amount on the bet placed. For example, if the bet maker makes a bet of one dollar, on fixed odds of 9/1, this means that if the bet wins, the payout will be nine to every one dollar bet.
It is also interesting to note that if applying the formula 1/ (9+1), which equals to 0.10, you can see that there is a ten percent chance of this bet winning. Which is a fairly low amount, and considering that the payout could be enormous, it becomes clear how the system balances out. The point to keep in mind, however, is that fixed bet odds always pay out a set amount, with no surprises ever given to the bet maker. There is another form of bet making which is known as tote betting, which uses a different system altogether.
About Tote Betting
Tote betting is offered at only a limited number of venues, and may well not be offered at a standard race track or bet making establishment. Tote betting works in a greatly different way to fixed odds, based on the number of people who bet on a certain outcome, as apposed to odds set in cement. For example, if placing a bet on a horse to win at a race track, and that horse wins, the amount paid out will be determined by the total amount of bets placed on that horse to win.
The odds are worked out, dividends determined, and payouts made to all those with a winning bet. This method is viewed by many to be a more fair way of determining payouts, but is also seen by others as having results that can be skewed by things other then the event itself. It goes without saying that the type of betting is not for everyone. Also keep in mind that the initial bet amount is not paid back, plus a winning amount on top, but rather the dividend includes the original bet.
Pros and Cons
For a clearer understanding of the potential benefits and detractions of this betting system, there are a few things to keep in mind. Firstly, consider that a long shot bet may lose value considerably if enough people bet on it. Why is this a problem? In fixed odds a long shot bet, or betting on the underdog, will often payout a massive sum, which makes sense based on the likelihood of the win occurring.
In political betting in Australia, there is no guarantee that the underdog bet, even if won fair and square, will payout anything close to fixed betting odds. It may, however, pay even more. Its all just a matter of luck. And, the opposite is likewise true. Betting on a favourite in tote betting is no longer by any means a sure way to get a fixed payout amount. Fixed odds may often give better results, but this again is determined entirely by the number of people placing bets.