Pari-Mutuel Revenues

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS '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."

RELATED TERMS
  1. Sin Tax

    A state-sponsored tax that is added to products or services that ...
  2. Gambler's Fallacy

    When an individual erroneously believes that the onset of a certain ...
  3. Gambling Income

    Any income that is the result of games of chance or wagers on ...
  4. Lottery

    A game of chance, where winners are typically decided by a drawing. ...
  5. Gambling Loss

    A loss resulting from games of chance or wagers on events with ...
  6. Gamification

    Gamification describes the incentivization of people's engagement ...
RELATED FAQS
  1. How does economic order quantity assist a company with maximizing profits?

    Economic order quantity can assist a company in maximizing profits because it finds the number of units the company should ... Read Full Answer >>
  2. How does a company make a spending decision using marginal analysis?

    A company can make a spending decision using marginal analysis by reviewing the effects of its marginal costs and marginal ... Read Full Answer >>
  3. When do I need to project run rates for my business?

    A business might project a run rate if it needs to evaluate potential future outcomes. Common scenarios where a run rate ... Read Full Answer >>
  4. Should I be alarmed if a company experiences a one- or two-quarter decline in net ...

    A one- or two-quarter decline in net sales can be considered alarming especially for top marketing executives, but this should ... Read Full Answer >>
  5. Which industries tend to have the most inventory turnover?

    The industries that tend to have the most inventory turnover are those with high volume and low margins, such as retail, ... Read Full Answer >>
  6. What is the difference between marginal benefit and marginal revenue?

    Marginal benefit measures the consumer's benefit of consuming an additional unit of a good or service, while marginal revenue ... Read Full Answer >>
Related Articles
  1. Investing Basics

    What Are The Odds Of Scoring A Winning Trade?

    Just because you're on a winning streak doesn't mean you're a skilled trader. Find out why.
  2. Investing Basics

    Are You Investing Or Gambling?

    We look at ways in which gambling creeps into trading, and what may drive an individual to trade - or gamble - in the first place.
  3. Taxes

    Winning The Jackpot: Dream Or Financial Nightmare?

    Don't assume all prizes are free. Many come with enough costs to render them worthless.
  4. Fundamental Analysis

    The Evolution Of The Gaming Market

    The gaming market has a rich history in America, from lotteries in colonial settlements and card games in old west saloons to today's multibillion-dollar casino industry.
  5. Active Trading

    Invest In Hollywood With The Film Futures Market

    It's been 10 years in the making, but you can now bet on which movies will hit it big, or which will flop.
  6. Options & Futures

    Going All-In: Comparing Investing And Gambling

    People often compare stocks to gambling, but how close are they really?
  7. Investing

    The Strong Dollar’s (Real) Toll On Tech Stocks

    A large portion of U.S. technology companies’ sales occur overseas, given the strong international business and consumer demand from many U.S. tech firms.
  8. Investing

    Apple or Google: Which is the Better Bet?

    Apple and Google have made many investors rich since the turn of the century. Which is more appealing going forward?
  9. Fundamental Analysis

    Invest in Cancer Research with These 3 Stocks

    These cancer research stocks offer both a high ceiling and the potential to save lives.
  10. Fundamental Analysis

    How Microsoft & Apple's Balance Sheets Compare

    Looking at two iconic companies, Microsoft and Apple, whose balance is sheet is stronger and where?

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center