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Economy May 24, 2013

IPL betting: Why bookies always have the last laugh

By Firstbiz Staff

From the day the IPL spot-fixing scam broke,everyday, the newspapers and TV channels are filled with stories --about a new revelation of egregious wrongdoing, an exclusive angle or a new break in the case.

Three cricketers and more than 12 bookies have already been arrested. And everyday, some new bookie is being arrested.

Despite knowing that they might get into big trouble, why really were these cricketers and the big names motivated to betting? The simple reason is greed.

But, there's something beyond that. The bookies knew they will win. How? That can only be explained by mathematics.

Getty Images

Getty Images

Mint's Dilip D'Souza shows us by some simple probability what makes betting possible and why bookies are likely to have the last laugh.

He gives two instances of tossing a coin and throwing of a dice as examples to explain the game behind betting.

So, people who knows simple probability are not likely to bet ifthere'sa 50:50 chance. For example, for every rupee you bet, you get a rupee if the coin lands heads, and lose a rupee if it lands tails, you are actually not making any money. Because, if you keep betting, you are losing your money half the time.

If you move this to a dice instead, nothing much changes. Now, the chances are 1/6. Here, for every rupee you bet, you are promised Rs 5 if the dice shows 3. It may sound like you will earn a lot, but not, really. You will lose your rupee five out of six times.

Now, let's move to actual cricket. If you are a cricket follower, you know how the bowler bowls in every over. So, if a bookie tells you that you will get Rs 1,000 if a particular bowler bowls a no-ball in the first over, you are very happy at the deal. Why? You know that's how he exactly bowls and you bet your money on it. Only what you don't know is the bookies are smarter. He has asked the bowler to bowl two no-balls in that over. And instead, promised him half your money.

You lose, obviously. And both the bookie and your favourite bowler have the last laugh.

Do read this brilliant Mint article here for better understanding.

by Firstbiz Staff

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