Pari-Mutuel Revenues


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.

BREAKING DOWN '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."

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