Re: Tuan Le and The Grinder
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If the Grinder has a positive expectation in tournaments how could his backer(s) have a negative expectation on the deal?
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Say horse plays ten-handed, no-vig, winner-take-all single table tournaments. If horse wins, he keeps 30% of the win. If horse loses, backer eats the whole entry.
Horse is a good player, so he wins 1/8th of the time. Thus, after eight plays:
Seven times he busts out, so backer is minus 7 entries. Horse is minus nothing.
One time he wins, so backer wins 70% of 9 entries or 6.3 entries. Horse wins 30% of 9 entries or 2.7 entries.
After 8 tournaments, horse is up 2.7 entries, but backer is stuck 0.7 entries.
For backer to come out ahead, one of the following needs to happen:
1. Horse needs to play better.
2. Horse's percentage needs to drop. 15% would work in this scenario.
3. Horse needs to be paid a fixed amount per tournament, and backer gets 100% of win.
4. Horse and backer need to contract to extend their relationship over a large number of tournaments, after which horse will get some percentage of the total net, not the total gross. The longer the relationship, the higher that percentage can be for the horse and still remain profitable for the backer.
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