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£250k from £5 bet

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malkymoo
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£250k from £5 bet

#396711

Postby malkymoo » March 18th, 2021, 11:58 am

According to this story, a lucky punter is due a £250,000 minimum payout from a £5 stake.

https://www.bbc.co.uk/sport/horse-racing/56435950

I know very little about betting, but this payout seems unfeasible high. The punter has had four wins at 12/1, 10/1, 4/1 and 25/1. Multiply those odds together and you get 12,000/1, so from a £5 stake I would expect payout to be of the order of £60,000.

Where am I going wrong, where does the £250,000 come from? Or is the story b***ocks?

dealtn
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Re: £250k from £5 bet

#396714

Postby dealtn » March 18th, 2021, 12:07 pm

malkymoo wrote:According to this story, a lucky punter is due a £250,000 minimum payout from a £5 stake.

https://www.bbc.co.uk/sport/horse-racing/56435950

I know very little about betting, but this payout seems unfeasible high. The punter has had four wins at 12/1, 10/1, 4/1 and 25/1. Multiply those odds together and you get 12,000/1, so from a £5 stake I would expect payout to be of the order of £60,000.

Where am I going wrong, where does the £250,000 come from? Or is the story b***ocks?


It's a 5 horse accumulator. You have only assessed the first 4 results. Factor in that £60,000 remaining at the 9/2 antepost odds and ...

So instead of letting it run he can now hedge the result on Betfair. Regardless of the winner of the remaining race he is now up at least £250k.

SalvorHardin
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Re: £250k from £5 bet

#396716

Postby SalvorHardin » March 18th, 2021, 12:15 pm

Remember to add the stake each time to the winnings to get the amount which rolls over to the next bet. The calculation is thus:

First bet. £5 wins at 12-1 = £60 win plus £5 stake returned = £65

Second bet. £65 wins at 10-1 = £650 win plus £65 stake returned = £715

Third bet. £715 wins at 4-1 = £2,860 win plus £715 stake returned = £3,575

Fourth bet. £3,575 wins at 25-1 = £89,375 win plus £3,575 stake returned = £92,950

The punter now has £92,950 bet on Envoi Allen at 9-2. If Envoi Allen wins that's £418,275 plus £92,950 stake returned = £511,225 potential return

As per the betting slip which is shown in the article linked below:

https://talksport.com/sport/racing/851285/cheltenham-betting-tip-envoi-allen-punter-cash-out-accumulator/

However, if the fifth bet (Envoi Allen) doesn't win he gets nothing. The £250,000 is Betfair's offer to close out the bet: £250,000 paid now and an extra £50,000 if Envoi Allen wins.

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Re: £250k from £5 bet

#396719

Postby bluedonkey » March 18th, 2021, 12:17 pm

Takes me back to Yankees and Heinzs.

malkymoo
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Re: £250k from £5 bet

#396733

Postby malkymoo » March 18th, 2021, 12:44 pm

SalvorHardin wrote:Remember to add the stake each time to the winnings to get the amount which rolls over to the next bet. The calculation is thus:

First bet. £5 wins at 12-1 = £60 win plus £5 stake returned = £65

Second bet. £65 wins at 10-1 = £650 win plus £65 stake returned = £715

Third bet. £715 wins at 4-1 = £2,860 win plus £715 stake returned = £3,575

Fourth bet. £3,575 wins at 25-1 = £89,375 win plus £3,575 stake returned = £92,950

The punter now has £92,950 bet on Envoi Allen at 9-2. If Envoi Allen wins that's £418,275 plus £92,950 stake returned = £511,225 potential return

As per the betting slip which is shown in the article linked below:

https://talksport.com/sport/racing/851285/cheltenham-betting-tip-envoi-allen-punter-cash-out-accumulator/

However, if the fifth bet (Envoi Allen) doesn't win he gets nothing. The £250,000 is Betfair's offer to close out the bet: £250,000 paid now and an extra £50,000 if Envoi Allen wins.



Thank you for that very clear explanation. The £250,000 offer to close out still seems high to me. The punter now has £92,250 riding on Envoi Allen. How does his position differ from that of someone who has just placed a bet of £92,950 on Envoi Allen? I don't think Betfair would want to close that for £250,000.

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Re: £250k from £5 bet

#396735

Postby SalvorHardin » March 18th, 2021, 1:01 pm

malkymoo wrote:Thank you for that very clear explanation. The £250,000 offer to close out still seems high to me. The punter now has £92,250 riding on Envoi Allen. How does his position differ from that of someone who has just placed a bet of £92,950 on Envoi Allen? I don't think Betfair would want to close that for £250,000.

The thing is that the odds have changed in the punter's favour which greatly increases the effective amount staked.

The punter has a bet of £92,950 on Envoi Allen at 9-2, so if Envoi Allen wins his winnings are £418,275. But as I type this Envoi Allen is the odds on favourite at 4-9.

4-9 odds says that the horse's chance of winning the race is 9 / (4 + 9) = 9/13 or 69.23% (I'm excluding the bookie's profit margin to simplify matters).

So the expected value of £418,275 winnings at 4-9 odds is £418,275 x 9/13 = £289,575 and £250,000 is 86.3% of this.

Those of us who have online accounts with bookies will probably have noticed that bookies' cash in offers tend to be around 80% to 85% of the expected value of the bet based on the current odds

I have a mere £130 on Envoi Allen at 8-13 :D

malkymoo
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Re: £250k from £5 bet

#396741

Postby malkymoo » March 18th, 2021, 1:13 pm

Got it now, thanks! Best of luck with the £130!

SalvorHardin
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Re: £250k from £5 bet

#396745

Postby SalvorHardin » March 18th, 2021, 1:24 pm

malkymoo wrote:Got it now, thanks! Best of luck with the £130!

Envoi Allen has just fallen.

Our punter must be extremely pleased that he took Betfair's offer

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Re: £250k from £5 bet

#396749

Postby Dod101 » March 18th, 2021, 1:57 pm

SalvorHardin wrote:
malkymoo wrote:Got it now, thanks! Best of luck with the £130!

Envoi Allen has just fallen.

Our punter must be extremely pleased that he took Betfair's offer


Did you tell us that at one time you were an actuary? That would help explain your grasp of such matters, which I accept if you study odds are not difficult but I now know more about betting and odds than I have ever known in all my years.

Thanks for that

Dod

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Re: £250k from £5 bet

#396755

Postby SalvorHardin » March 18th, 2021, 2:22 pm

Dod101 wrote:Did you tell us that at one time you were an actuary? That would help explain your grasp of such matters, which I accept if you study odds are not difficult but I now know more about betting and odds than I have ever known in all my years.

Yes, for my sins I used to be an Actuary. Which is basically accountancy with more mathematics, notably probability theory, statistics and compound interest.

I know two Actuaries who have become professional gamblers. The Actuaryial "toolkit" gives us a bit of a head start :D

Then again as the saying goes, an Actuary is someone who didn't have the personality to become an accountant (or who found accountancy to be too exciting)

One of the origin stories about probability theory says that some key building blocks were laid by Pascal and Fermat, when worked on how to split the stake in a game of chance when the game was interrupted (dice games, interrupted by the Cardinal's Guard raiding the tavern in Paris). It might even be true!

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Re: £250k from £5 bet

#396817

Postby Dod101 » March 18th, 2021, 4:25 pm

Yes a few years ago I became a very mature student of the OU and took a maths degree so to that extent I can relate to Pascal and Fermat and indeed a few others whose names I have now forgotten. I found probability theory not very difficult although I had no real interest. Clearly i am not a gambler.

Dod

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Re: £250k from £5 bet

#397475

Postby BobbyD » March 20th, 2021, 5:20 pm

Dod101 wrote:Yes a few years ago I became a very mature student of the OU and took a maths degree so to that extent I can relate to Pascal and Fermat and indeed a few others whose names I have now forgotten. I found probability theory not very difficult although I had no real interest. Clearly i am not a gambler.


The gambler is the party who doesn't understand probability.

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Re: £250k from £5 bet

#397477

Postby chas49 » March 20th, 2021, 5:24 pm

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