Horse racing and pool betting

Horse racing is the oldest regulated betting market and still one of the largest. Two models coexist: pari-mutuel pool betting, where all stakes go into a pool shared among the winners, and fixed-odds betting with bookmakers. How betting money flows back to the sport is a policy question in almost every racing country.

Pari-mutuel: the tote

In pool betting, the operator takes a fixed deduction from each pool and the rest is shared among winning tickets, so the final payout is only known when betting closes. The operator carries no risk on the result. In France, Japan, Hong Kong and much of the United States, pari-mutuel betting dominates and is run by or for the racing industry itself.

Fixed odds

Bookmakers offer fixed prices on races, which in Britain, Ireland and Australia is the main form of racing betting. Because bookmakers profit from racing without organising it, most racing countries require them to contribute through a levy, a race fields fee or media rights payments.

Regulation and tax

Racing betting is often licensed separately or given its own tax treatment to protect racing's funding.
In the United Kingdom, horse racing bets are excluded from the higher remote betting duty due from April 2027.
State monopolies such as Norsk Rikstoto in Norway run pool betting as a separate exclusive right.