When bookmakers set odds, they do so using either totes or fixed odds frameworks. Generally, totes are used for horse racing while fixed odds are commonly used in sports betting. Before placing a bet on any event, you need to understand how both systems work.
How Totes Work
Totes are also known as pari-mutuel or pool bets, with the word “tote” being derived from “totaliser”. As you might be able to gather from all of these names, a tote involves all wagers of the same kind being grouped together.
The odds are calculated by removing the sportsbook’s profit, often called the “house-take”, and then dividing the remaining pooled bets between all the winners. That means that the odds will change as an event draws closer, and more people put money on the results.
Usually, you won’t know what the actual odds are until betting has closed and the horse racing betting event has begun. The totaliser is used to calculate and display the odds of the wagers that have already been placed, and can give you a good approximation of what the actual odds will be.
How Fixed Odds Work
As you might guess from their name, fixed odds bets are the opposite of totes; their odds are set when the wager is placed. Once you’ve made your prediction and put your money down your odds won’t change; you’ll be paid out according to those figures no matter what else happens.
However, just because your odds are fixed doesn’t mean that the odds on the event remain the same. Operators change the odds as the probability of each results grows bigger or smaller, to ensure that they always generate a profit.
For example, if you place a bet on Crystal Ocean (currently Europe’s highest-rated middle-distance horse) winning and the stallion then suffers an injury, the odds will be adjusted and get much longer but yours will remain the same.
Which is Better?
No matter what type of odds you choose, you should always do as much research as possible. Check how a horse performs on the type of track surface being used, recent running times, injury reports, and how the horse and jockey interact. Above all, never wager any money that you can’t afford to lose.
Now for the issue at hand – should you opt for totes or fixed odds? How do you decide? First and foremost, you might not have to – often only one type of betting structure is used for an event. If you can choose, however, a good rule of thumb is to use fixed odds when you’re not sure of the result, and pari-mutuel bets when you are confident in what will happen.
This reduces your chances of dealing with odds that are worse than you expect them to be. In the case of totes this is because you’ll be able to anticipate how most people will bet, and with fixed odds this is because you’ll know exactly what your odds and potential payout is before you put any money down. Either way, you avoid a nasty shock.