Mark,

The difference is the the person holding the bet is paying out according to the tote price. If he is holding $10,000 in bets and his exposure is greater on a certain horse than he would like (one big bet), he can bet $5,000 into the tote pool to bring down his eventual payout and actually firm or ease certain horse prices on the tote.

It's a bit like dutch betting in reverse.
I'm sure that the big players have software which calculates exposure given pool size and odds, just like a dutch betting calculator.

Here's a small example:

Let's say a tote pool is hypothetically $148,000
The favourite is showing $3.60.
I'm holding $10,000 in bets on $3.60
But I'm only holding $4,000 on all other horses in the race.
If the horse wins I have to pay out $36,000
If I bet back $5,000 into the pool the new dividend becomes $3.30 or thereabouts.

So instead of having to pay out $36,000 I have to pay out $33,000 but also win back $11,500 for myself in bets (profit), so my exposure has gone from payout of $36,000 on horse A to $33,000 less $11,500 in winnings, so $21,500 exposure.
Betting back into the pool, I've saved myself $14,500 in payouts and still win $5,000 on that horse if it loses.



[ This Message was edited by: Chrome Prince on 2004-04-29 11:55 ]