Pari-mutuel is a form of betting whereby all bets of the same type go into a pool. The winning dividend for a pari-mutuel bet is determined by the total pool size divided by the number of winning bets. The operator will withdraw taxes and a margin from the total pool size before dividing the pool amongst winning bets.
Pari-mutuel betting is also referred to as tote betting or the tote (totalisator) where punters can view the current dividends at any point in time on screen.
The major bookmakers now offer tote betting in some form or another. The bookmakers simply payout the dividend declared by the tote. Some bookmakers now offer an added percentage (%) on top of the tote dividend.