7 Concepts of Betting and Wagering You Should Understand

By in Sports & Betting on
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Betting Wagering Cash

There are plenty of terms that are commonly used in betting and wagering. Some may seem uncomplicated but have more than one meaning. While others may sound overly technical but express an easy concept.

Much like any other topic, betting has a large vocabulary associated with it. Gamblers should learn to familiarize themselves with as many of these terms as they possibly can.

There are several different types of betting systems and methods of wagering. And these betting systems have different components and important features.

The terms on this list are crucial for every gambler to know and understand. Many of these ideas can even apply outside the world of betting.

1 – Parimutuel Betting

Parimutuel betting is a system where money is placed in a pool. A transaction fee is usually deducted for the house to take, then all players’ payoff odds are calculated based on the shared pool of winning bets. This is the opposite of fixed-odds betting, in which the payoff is predetermined.

In parimutuel betting, players bet against each other. Money distributed to the player comes from a pool of player bets. In this form of betting, the house does not have to pay out money that was not paid in, unlike fixed-odds betting. Vigorish is the term used to refer to the cut that the house takes in order to make the game profitable for itself. This is usually taken out in the pooling phase before winnings are redistributed.

Although this seems like a very old wagering system, it was invented in Paris in 1867 by a man named Joseph Oller. Oller was sentenced to jail for illegal gambling, but his system would spread from racetrack to racetrack. Eventually, the French government banned fixed-odds betting in 1891 and Oller’s system became widely popular.

2 – Fixed-Odds Betting

Fixed-odds betting differs from parimutuel betting in that players are given predetermined odds to bet against. These odds are created by the house or bookmaker. The method for determining odds and their payouts depend on numerous factors. Bookmakers have their own statistical models for determining odds.

How the odds are determined are less important than understanding how the odds pay out. The amount a player will win is adjusted according to the odds of success. A bet of $1 at 10/1 odds will return $10. If 10/1 seems a reasonable amount of risk for the gambler, then this would be a good bet.

Odds can be represented in several different ways. Most commonly, odds will be expressed as fractions or ratios. A player will bet on 4:1 odds or 1:4 odds. This means the bettor will make four times their bet (in the case of 4:1) or ¼ the original bet plus the initial amount.

Odds can also be read in decimal form. Moneyline odds are most common in the US. For example, 4:1 would be read as +400 as an underdog, while 1:4 would be a negative number indicating a betting favorite, -400.

3 – Sports Betting

The term sports betting may seem broad, but it encompasses so much of what wagering is today. It’s not only betting on games of football or baseball, it includes animal racing, mixed martial arts, and many more. Sports betting is also wagering on the outcome of events, such as the Emmy’s, any presidential elections, or even the NFL draft.

The most common types of sports betting include:

  • Moneyline bets
  • Spread betting
  • Parlays

In a moneyline bet, players wager on whether sports teams will win a game outright. In spread betting, one team is given an amount of points they must win by and the other, a number they lose by. A parlay is any combination of bets that a bookmaker will take in combination with each other.

Different bookmakers and exchanges will offer numerous other types of sports betting. Players can take bets on the scores at the end of a quarter or at halftime. Bets can also be made on the placement of different players in a race. For instance, predicting the placement of racers in NASCAR or riders in harness racing. With the advancement of modern tech, players can make bets on changing odds while a game is being played.

The topic of sports betting can be controversial. Many American professional sports leagues have a lukewarm embrace of sports betting. The National Football League is the only American sports league to openly take a stance against sports betting. Most professional sports leagues across the world have rules banning players, officials, and other participants from betting on matches.

4 – Arbitrage Betting

Arbitrage betting consists of making several different bets on different outcomes to cover the risk of loss. It generally requires a larger amount of investment because of the numerous possible outcomes covered. If the amount a player can win across all bets is guaranteed to profit, their arbitrage betting is a success.

Most bookmakers look down on arbitrage betting. With today’s online betting exchanges and odds-comparison sites, arbitrage betting has become more common. The practice of arbitrage betting is not considered cheating, but it also isn’t tolerated by bookmakers and often results in the closing of the player’s accounts.

Arbitrage bettors can take advantage of different odds offered by different bookmakers. They can balance wagers and back different outcomes with different bookmakers. Some betting exchanges offer signup bonuses and coupons that players can use to hedge their bets. It’s kind of similar to comp-hustling at a casino.

There are numerous risks involved with arbitrage betting. Players can lose their bets entirely or lose their advantage, as odds for matches can change by the minute.

5 – Betting Exchanges

A betting exchange refers to an online market where players can bet on sports outcomes. They offer an alternative service to a bookmaker. A betting exchange makes a profit usually by charging a commission on winning bets.

The first exchanges emerged around 2000. The largest today is Flutter Entertainment, traded on the London Stock Exchange. Many betting exchanges also offer online casinos and online poker.

Although commissions are taken from winnings, the odds offered by betting exchanges are often better than bookmakers. Exchanges also allow players to back an outcome and bet against an outcome. This is called backing and laying. The exchange doesn’t bet against any outcome, this means players bet against other players.

6 – Bookmakers

Bookmakers are the traditional option for placing sports bets. They can be an organization or an individual. Bookmakers make a profit by offering odds and spreads that guarantee a favorable outcome for themselves.

In the US, various states have different laws regarding bookmaking. Many websites from within the country operate like bookmakers, not betting exchanges. In 2018, the Supreme Court overturned a 1992 law that prohibited states from allowing sports betting.

Most people think of the standard movie-style bookie taking bets in the back of a smoky bar, keeping numbers in a little black book. This style of bookmaker will become less common as more states legalize sports betting. Like most illicit activity, once it’s legalized and regulated, the criminal element becomes less influential.

Small brick and mortar bookmakers are uncommon in the US. Most real-life bookmaking can be found at casinos or racetracks. Some states without a gambling industry are creating one thanks to the legalization of sports betting. Unsurprisingly, Nevada has the largest number of bookmakers.

7 – Simulcast Racing

Many sports tracks and casinos will offer a simultaneous broadcast of races. Players can place bets with bookmakers on the outcome of races in real-time. The most popular simulcast sports in the US include Thoroughbred racing, greyhound racing, and jai alai.

Many casinos allow players to bet on simulcast racing in a comfortable lounge-style environment. Simulcast race viewing is not common at smaller bookmakers. Many racetracks offer simulcast viewing of other tracks and sporting events.

Simulcast originally referred to a sporting event being broadcast on two mediums at once. This meant a game would be broadcast in real-time across radio and television similar to the way betting venues broadcast races in real-time.


There are many important wagering terms to understand. Some seem straightforward but have a deeper meaning, others sound complex but are astonishingly simple to grasps. Beyond terms associated with wagering, there are numerous betting systems and strategies. There’s also an endless list of types of wagers players can place with different bookmakers and exchanges.

Knowing some of these terms can save you money. For example, understanding the difference between an online bookmaker and a betting exchange is important for placing the best possible wager. Understanding how spreads work in fixed-odds betting is also essential.

Players should familiarize themselves with all the games available to them. Online sports betting can involve wagering on things beyond conventional sports. Simulcast viewing of races and events at betting locations is an excellent way to take in the excitement.

So, entertain the office pool with your knowledge of parimutuel betting. By understanding these terms, you’ll not only become better at placing bets but also at appreciating the games. Everything is a gamble anyway, so why not learn to understand these terms well and win more often?

Michael Stevens

Michael Stevens has been researching and writing topics involving the gambling industry for well over a decade now and is considered an expert on all things casino and sports betting. Michael has been writing for GamblingSites.org since early 2016. ...

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