Was Michigan St @ 50-1 a Good Bet?

The 20K bet by Las Vegas casino owner Derek Stevens has been widely publicized since Mich St made the Final Four. Word is Stevens made a few bets sized to payoff one million dollars and the Spartans have survived and need two more tough wins to cash the whopper of a ticket.

20K @ 50-1 pays back $1,020,000.


Potential Million Dollar Ticket on Mich St

Sounds great but the sports books know that these bets are big moneymakers for them over the
long haul. Having to sweat the occasional big payoff is just part of the deal and it generates a good buzz for the sportsbook win or lose. Fact is, this was a nice bet for the Nugget to take. One that probably had 5 figures worth of profit built in.

Taking Mich St @ 50-1 to win the title literally months before the tourney started (wager was made Dec 5th) may sound like a great spot now, but back then it was hardly a sharp play. Better odds existed elsewhere and few places were offering the type of return one could’ve had by merely waiting for the tourney to start and taking the moneyline and rolling it into the next game as each was played. In fact, just waiting for the tourney to start to make the same bet would have been better too. The Westgate opened the Spartans at 60-1 once the field was announced and even higher numbers existed offshore. After one day of betting, the odds on Mich St had risen to 75-1 at the Westgate indicating that the path to the championship was evaluated by bettors to be a rough one as other teams in their region drew more action.

It’s interesting that the William Hill outlets that operate out of both the D and the Golden Gate, both of which Stevens owns (he can’t bet there due to the deal in place), were offering a comparatively fat 100-1 three days before the tourney began.

Golden Nugget sportsbook director Tony Miller has been a popular interviewee and radio guest since the bet made the news. At times he’s had to defend the risk taken on the bet even though
it was a big +EV transaction for the house. On paper, the Nugget knows they had the best of it.

Examining the money lines available for each game one could calculate the approximate payout a 20K wager would return had the game-by-game moneyline route been taken instead of the 50-1 future bet.

This is merely an exercise to show the differences between the long method of wagering using the game by game, let it ride route vs accepting the future book odds. In reality, a bet of this size would soon become difficult to re-bet in it’s entirety so this is primarily theoretical due to the size of the bets involved. It’s not impossible to bet, just quite difficult for most.

Mich St would first have to make the tourney, which for the sake of simplicity we’ll assume they were 100% to do. That will make it a six game moneyline rolling parlay at varying prices.

Round of 64:
Game 1 vs Georgia: Bet of 20K on Mich St ML @ -250 wins $8,000
New bank $28,000

Round of 32:
Game 2 vs Virginia : Bet of 28K on Mich St ML @ +180 wins $50,400
New bank $78,400

Sweet Sixteen:
Game 3 vs Oklahoma: Bet of $78,400 on Mich St ML @ -120 wins $65,333
New bank $143,733

Elite Eight:
Game 4 vs Louisville: Bet of $143,733 on Mich St ML @ -135 wins $106,469
New bank $250,202

Final Four:
Game 5 vs Duke: Bet of $250,202 on Mich St ML @ +200 wins $500,404
New bank $750,606

NCAA Championship:
Game 6 – 70% of the time vs Kentucky @ +450 and 30% of the time vs Wisconsin @ +200.
Avg price in Championship game rounded to +375.

$750,606 on Mich St ML @ +375 wins $2,814,773

Final bank $3,565,379

++The online sports book 5Dimes projected the Final game prices as +500 vs Kentucky
and +225 vs Wisconsin

That’s a net win of $3,545,379 so using the money line parlay method returns an additional 2.5M.
It would have netted more than triple (effective odds 178-1) what the ticket pays @ 50-1 and earned a shipload of comps along the way. Again, betting in this manner would be most likely impossible. What this comparison does though is illustrate just how vig-heavy those futures charts can be.

It also shows what happens when the media gets wind of a big potential payout on a major sporting event. They can turn a bet with a return inferior to any state lottery ticket into the best investment since Apple.

Posted in LVAS Now, Uncategorized