Odds in local pool vs, odds in Vegas
We recently held a Calcutta auction of the NCAA basketball teams and I'm curious as to how our bets stack up with Vegas odds.
I have a limited background in math and would love it if someone can give me a formula to figure out the relative value.
For instance, Villanova sold for $1600 and if they win it all, will return $11,130. This is the equivalent of getting 5.956 to 1 ($11,130 less the cost of $1600 makes a profit of $9530).
Vegas shows a line of 8 to 1 so it looks like 5.956 is a bad bet. However, we pay more than one place and that needs to be taken into consideration.
If our team wins 1 game we collect $50.
Win 2 games, collect another $100 ($150 total)
Win 3 games, collect another $300 ($450 total)
Win 4 games, collect another $1424 ($1874 total)
Win 5 games, collect another $2848 ($4722 total)
Win 6 games, collect another $6408 ($11,130 total)
I'm not so concerned with the $50, $100, and $300 bumps, but collecting $4722 for losing in the championship game is a nice consolation prize we would not get if making a "win it all" bet in Vegas.
Is there an easy formula I can use to determine how good (or bad) a bet we made for our various teams?
Another instance, Iowa State sold for $475 and would return the same $11,130 for 1st place. This amounts to a profit of $10,655 or 22.43 to 1.
Vegas shows them at 55 to 1, so I assume this is a much better wager than buying them in our auction, even with the consolation payoffs.
How about it? Can anyone give me a formula that I can plug in our numbers to determine the value of our purchases?
Thanks in advance.
These are the results of the auction for those who are curious:
3-Florida State $750
4-W. Virginia $725
5-Iowa State $475
6-Notre Dame $525