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#31
09-09-2006, 04:10 PM
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Re: How Can Mansion Afford This?
Their english soccer sponsorship and their poker-dome TV show reportedly cost them around $60 million each and I doubt either expense got so many high-ish rolling gamblers to set up accounts on their site.
There's some mad money to be made in sportsbooks, but the trick is getting the gamblers to try it out in the first place. I have a hunch this will prove to have been an effective way for them to spend $6-million. 
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#32
09-09-2006, 04:55 PM
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Re: How Can Mansion Afford This?
[ QUOTE ]
The free bet cost them about $480 * 5000 = 2,5 million. Hedging cannot help that. Whether they hedged or not they had EV of -2,5 million with this promotion. [/ QUOTE ] A similar misundersanding is why Jeff Skilling is headed to federal pound-me-in-the-ass prison.
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#33
09-09-2006, 07:50 PM
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Re: How Can Mansion Afford This?
[ QUOTE ]
[ QUOTE ] Look up the word HEDGE in the gambler's dictionary. [/ QUOTE ] You are not suggesting that hedging means they did not lose money with this promo, are you? (I have read several posts that suggest so) If you are, tell me how do they hedge so that they negate the free money (~$480/bet) they give away? And if they can do that, why isn't every sportsbook offering similar free bets? The free bet cost them about $480 * 5000 = 2,5 million. Hedging cannot help that. Whether they hedged or not they had EV of -2,5 million with this promotion. [/ QUOTE ] they bet 5.5 million on pittsburgh somewhere else? or 2.5 million? or whatever number achieves their desired exposure? you do realize if pitt didnt cover they didnt have to 'refund' any actual money right?
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#34
09-10-2006, 03:00 AM
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Re: How Can Mansion Afford This?
I have never understood all the people that said they just bet it on another book...
1. If Pittsburg wins they win so they can pay for free. That is correct. 2. If Miami wins it is also correct that they dont have to pay (doesn't cost them any thing to give the money back) HOWEVER, if Miami won they would have lost their bet at the other book. If they bet Miami obvisouly its basically like a 50-50 bet of 5.5 million for them. Basically there was no way for them to guarantee 0 loss. It was a promotion and it cost them money (or a risk of money no one will ever know for sure) BUT do not be mistaken in thinking it was no big deal for them YES they can afford it but it was not a guaranteed break even situation for them as I have seen multiple people mention it was. Someone please correct me if I am wrong somewhere in this?
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#35
09-10-2006, 03:40 AM
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Re: How Can Mansion Afford This?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Look up the word HEDGE in the gambler's dictionary. [/ QUOTE ] You are not suggesting that hedging means they did not lose money with this promo, are you? (I have read several posts that suggest so) If you are, tell me how do they hedge so that they negate the free money (~$480/bet) they give away? And if they can do that, why isn't every sportsbook offering similar free bets? The free bet cost them about $480 * 5000 = 2,5 million. Hedging cannot help that. Whether they hedged or not they had EV of -2,5 million with this promotion. [/ QUOTE ] they bet 5.5 million on pittsburgh somewhere else? or 2.5 million? or whatever number achieves their desired exposure? you do realize if pitt didnt cover they didnt have to 'refund' any actual money right? [/ QUOTE ] coarse numbers: 1. They bet $5.5M on pittsburgh elsewhere: A) Pittsburgh wins, they pay $5M winnings to their clients, and receive $5M winnings from elsewhere, breaking even. B) Pittsurgh loses, they break even on their clients, and lose $5.5M from their bets elsewhere. On average, they have -EV of about $2.5M using this hedge. 2. They bet $2.5M on Pittsburgh elsewhere: A) Pitts wins, they pay $5M winnings to their clients, and receive $2.5M winnings from elsewhere, losing $2.5M. B) Pitts loses, they break even on their clients, and the $2.5M they bet elsewhere. On average, they have -EV of about $2.5M using this hedge. Any other suggestions for hedging? The claim that if the promotion bet did not win "they didn't have to refund any actual money" does not have any real meaning. Mansion is not some degenerate gambler, they take the probability of both results in account and calculate the EV of the whole. I did skip calculating the effect of Mansion's clients bets on Miami and their payouts for two reasons: a) during this promo, it can be argued that majority of Mansion's clients bet on Pittsburgh and the effect is negligible and b) the fact that Mansion clients also bet on Miami does not change their overall -EV of this promo. If you want to do the more complicated examples using also Miami bets, be my guest. All in all I believe people who say "they just hedged, dude, they did not lose money" just have not thought this out properly. Feel free to prove otherwise.
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#36
09-10-2006, 04:53 AM
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Re: How Can Mansion Afford This?
i highly doubt anyone bet miami for any reasonable size on mansion.. They could have gotten the same line elsewhere and taken the steelres for free provided they had the bankroll but I total agree they had to lose money as I pointed out earlier [img]/images/graemlins/smile.gif[/img] I am a genius I know
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#37
09-10-2006, 06:27 AM
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Re: How Can Mansion Afford This?
[ QUOTE ]
Any other suggestions for hedging? [/ QUOTE ] Note that they also got a nice hefty middle from those of us who made the promo bet early and got stuck with -4.5 or -5. Hard to judge the EV impact of that (because we don't know how many bet the line before it moved vs. after) but it's significant.
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#38
09-10-2006, 10:56 AM
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Re: How Can Mansion Afford This?
The dude loves sports and loves to bet. Most likely he didn’t even hedge. Betting a few million on a football game for him is not surprising. He seems quite generous, does a lot of charities in Hong Kong.
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#40
09-10-2006, 12:23 PM
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Re: How Can Mansion Afford This?
to make it simple (and overlook the juice)...
weren't mansions options.... take 50% risk of $5.5 million loss. hedge for certainty of $2.75 million loss... and if they wanted to buy insurance, wouldn't they just pay $2.75 million plus whatever insurance company marks it up. i think this is a terrible way to do business... did they even lock in your money for a year, or have a drawing for the opportunity to take part? i think that's a much better way to do it.... i guess it's $550 sign-up bonus, but from what i saw they aren't locking you in (feel free to correct me)
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