Today’s Times of India lists the bets being offered by the bookies (prominently Ladbrokes’) for bettors wanting to stake their fortunes on their predictions for the winner of the World Cup.
Like, say, India’s odds are 11/4. So if a bettor bets Rs. 4 on India, then if India wins, he receives Rs. 11 plus he gets back his Rs. 4 – total Rs. 15. So the “cost” of betting on India is 4/(11+4) i.e. 0.2667. If the odds are a/b, then the “cost” is b/(a+b).
I have totalled the “costs” of betting on all the main contenders. A little bit of thinking will reveal that if the total “cost” is 1, then it means that by betting Re. 1 uniformly across all the options, I am guaranteed a return of Re. 1. This would mean that there is no additional cost being imposed by the bookie.
However, we know that in reality, the bookie needs his daily bread, and the bettor always starts out at a disadvantage. Typically in betting centres like Las Vegas and Macau, the dice is loaded in favour of the casino – the minimum being just above 1% for Baccarat and 3-4% for Blackjack and Roulette. If the casino doesn’t play a game, it typically takes 3% of the winnings. This pays for the airconditioning and the hors d’oeuvres (and the hostesses).
So far, fair enough. So what is the cost imposed by the bookies for cricket betting? Here are the odds offered and their reciprocals which represent the cost of betting on that particular team : India 11/4 (0.2667), Sri Lanka 4/1 (0.20), South Africa 4/1 (0.20), Pakistan 8/1 (0.1111), Australia 9/2 (0.1818), West Indies 20/1 (0.0476), England 8/1 (0.1111), New Zealand 20/1 (0.0476), and Bangladesh 66/1 (0.0149). I have ignored the rest. The total cost comes to 1.18. I.e. in order to earn a rupee, I need to wager Rs. 1.18!!! By betting a lac, I can get a return of only Rs 84,750, luck ignored. The bookie is imposing a cost of more than 15%!!! Without needing to pay for the airconditioning…
So next step for the gamblers… Macau? Or better still, just meet up with one of your ilk, play some loud music, and toss a coin. At least you would have had the satisfaction of getting the betting ‘cost’ down to zero.