Basic Principles of Betting Part 1
In a fair bet two or more persons pay different amounts of money for their divergent opinions into common pool. The more convinced a bettor, the higher his contribution to the pool (stake). After the decision who was right, the winners get the whole pot and share it relative to their stakes. Consequently, the higher the stake of a bettor, the higher his share in the pot, but the lower his relative profit, the odds (pool/stake).
Finding a trustworthy partner with additionally opposite opinions is not easy, therefore a market of tote operators at race tracks and bookmakers has emerged. These two kinds of institutions offer the service of nearly permanent and (almost) riskless betting. Since this service has its price, pools are redistributed only partially. Bets become (at least mathematically) unfair.
In case of a race track totalisator a meeting of interested people is arranged at a specific time (mainly weekends) at a specific place (racetrack). The bettors place their amounts with a fiduciary person (tote operator), who cares for a just distribution of the pool on the winning tickets. For covering his costs (Running the track, etc.) and taxes he retains a definite percentage of the pool (20% - 30%, depending on the type of the bet, American figures are about 1/3 lower than European ones), the so called take.