Thursday, 16 September 2010

A Really Good Bet....gone bad

Notes from an interesting statistical story in the Wall Street Journal...

"A British Man Placed a $10 Weather Wager That Could Have Netted Him $27 Million, but the Complex Bet Was Invalid"

"As snow enveloped much of the northern U.K. over Christmas, the 52-year-old graphic designer found the weather outside delightful -- and profitable. Mr. Bryant wagered that snow would fall in various regions of the country, and he placed what is known as accumulator bets, which can pile up winnings like the wind-driven snow. Mr. Bryant believed his bets had netted him about $27.5 million in winnings."

(In the UK, there are regulated betting shops in almost every small village where you can place bets on literally anything)
Accumulator bets work like this, The bettor places simultaneous bets. If the first comes through, the initial stake plus the winnings are placed on the second bet. If that comes through, the entire pile is placed on the third bet, and so on. If all parts of the wager are won, the winnings accumulate quickly. If even one part of the bet loses, though, there are no winnings.

"Mr. Bryant recalls going into his local shop and producing one of his two winning accumulator betting slips. He recalls that the manager "started doing the math, and turned a bit white." Then he placed a phone call to headquarters and reported that the ticket was invalid."

So much for agency law in England... but it is a nice story for stats teachers to use in class...and ask why the bookie would be willing to accept a bet on four football games with an accumulator bet, but not on snowfall in four postcodes in England.
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