The Tote, or previously referred to as the Horserace Totalisator Board, is a U.K.-based bookmaker with head offices in Wigan. It was formed as a statutory body in 1928 by the British Government and eventually sold to gaming operator Betfred in 2011. Tote betting is essentially pool betting in which all wagers on a horse race are pooled into a fund, minus about 15 to 25 percent for course expenses and taxes. Winning tickets are paid from the remaining funds.
Pool betting is also known as Pari-Mutuel betting, and it differs from fixed odds betting in that the odds on a gambler’s bet are not known until the event has closed for betting. The odds are finalized once the sum of the pool bets is tallied and expenses are deducted.
Unlike fixed odds betting, payout amounts on Tote bets are calculated by computer using the pari-mutuel system of allocating funds. There are lower dividends on the most popular horses as there are more winning tickets to pay if a favorite wins. Thus, more winners result in lower payouts, and vice versa. Fewer winners, and a long-shot horse, result in higher payouts.
At odds 5/2, a winner gets £5 profit for every £2 wagered. The Tote guarantees profits for the bookmaker. The payout system is tabulated according to risks and rewards, and adjusts gains and losses based on the players’ risk tolerance.
In the U.K., Tote betting is available at every racecourse. All money bet on horses in a race goes into a 'pot' or 'pool' and following the race, this pool is shared out amongst all those who have placed winning bets. According to the British Horseracing Authority, all profits from the Tote go back into racing.