This post shows how the payouts of a parimutuel pool are calculated. Parimutuel betting is a type of betting where payouts are determined by the amount bet on each outcome.
Click here to view the parimutuel pool described in this post. The pool is hosted by CoinRoster.com and it uses bitcoins as currency.
The parimutuel pool described below asks “which fantasy lineup will get the most points”. The pool lists three fantasy lineups with four players on each lineup, and “tie” as a fourth outcome if the top score is a tie. The total amount bet in the pool was 0.00061020 bitcoins, which was worth about $2.13 at the time of writing.
Here are the amounts wagered on each outcome:
|Wagered||Implied Odds||Implied % Probability|
Based on the amounts wagered on each outcome, we can determine that if “Lineup 1” wins, then wagers on that outcome will get paid out at 3.93x their initial wagers. So a wager of 0.00001000 bitcoins wagered on Lineup 1 will be paid out 0.00003930. The odds imply that Lineup 3 and Tie are the least likely to occur, while Lineup 2 has the best chance of happening.
Click this link to view the actual pool, and you will notice the odds displayed at CoinRoster.com are a bit less than my example above. That’s because CoinRoster rakes 5% of the pool as their profit. To calculate the post-rake odds, simply multiply the inverse of the rake by the true odds = (odds * 0.95%).