Expected value and 50/50 split knockout pools

[panerd]

So a friend of mine is running a knockout pool where 50% of the winning go towards his daughters soccer team (more specifically her travel) and 50% goes to the winner. While completely understanding the spirit of such a pool being "for the kids" I have to take issue with him having multiple (three) entries. Is this not completely taking advantage of a situation where you are already getting a bunch of charity from your friends? My wife says just let it be because we will probably be hounding the same group for donations in a few years but my opinion is enter once and have fun... enter three times and you are totally taking advantage of the setup. What do you all think? Overreaction?

[QuikSand]

How do you figure he is taking advantage of anything? Every entry immediately gives away half of its value in the charitable cut. What is the downside for the other participants?

[MacroGuru]

I don't, he is basically donating 3x to the soccer team....does he increase a chance of winning yes, but nothing is to stop others for multiple entries and maybe he is hoping others follow suit.

[panerd]

Originally Posted by QuikSand

How do you figure he is taking advantage of anything? Every entry immediately gives away half of its value in the charitable cut. What is the downside for the other participants?

The entries are $20 (10/10 split) I am going to assume that he doesn't contribute anything to the travel side because he basically would just pick up the slack and it goes towards his daughter anyways so he is paying $10 an entry. I guess I kind of get what you are saying that he is playing for the same $10/person side pool but I am looking at it as (for cleaner math let's say 100 entrants, I think its 94) as him entering 3 times for a $2000 jackpot for $30. Maybe I shouldn't look at the $1000 for his daughter as winnings and then it's fair?

[panerd]

Originally Posted by MacroGuru

I don't, he is basically donating 3x to the soccer team....does he increase a chance of winning yes, but nothing is to stop others for multiple entries and maybe he is hoping others follow suit.

Yeah but it's to his daugther specifically not the team. Anyone else who enter multiple times is pitching $10 into the side pot and $10 that goes to his daughter.

[JPhillips]

So the proceeds go to the single girl? That's really ripe for corruption.

Do you have proof he's only paying 10$ per entry?

[panerd]

More outragous example but to clarify my point...

50 people enter and he enters 50 times
$500 to daughter, side pot $1000. He enters 1/2 of the entries and either gets $500 or $1500. Expected value 2 times his bet while ours is .5 times ours.

I know he is making some money just off the set-up of something like this but he still shouldn't take advantage

[panerd]

Originally Posted by JPhillips

So the proceeds go to the single girl? That's really ripe for corruption.

Do you have proof he's only paying 10$ per entry?

It's definitely for his daughter's travel specifically. Now I was clear on that so I am ok with the premise just not the fact that he would have multiple entries.

[molson]

This is a thing? People run fundraisers for their own kid? (Kids who aren't facing life-threatening illnesses or anything)?

Anyone here want to chip in for my Vegas trip in November?

[panerd]

Originally Posted by molson

This is a thing? People run fundraisers for their own kid? (Kids who aren't facing life-threatening illnesses or anything)?

Anyone here want to chip in for my Vegas trip in November?

Yeah. I mean I guess it isn't so much worse than girl scout cookies with a chance to actually win some money and have some fun. You're right that its usually under the "help the whole team" premise but I would guess a lot of stuff like that siphons the money raised proportionally for how much each kid brings in.

But to clarify I don't care as much about the $10/$10 split (which I guess could be seen as the bigger issue). My gripe is he already is getting a 50% cut so if he wants to enter once I guess I am cool with it. Three times is just taking advantage.

[QuikSand]

Originally Posted by panerd

More outragous example but to clarify my point...

50 people enter and he enters 50 times
$500 to daughter, side pot $1000. He enters 1/2 of the entries and either gets $500 or $1500. Expected value 2 times his bet while ours is .5 times ours.

I know he is making some money just off the set-up of something like this but he still shouldn't take advantage

Your math is absurd here.

Even if we take your assertions at face value (that all the "charity" money go directly back into his pocket, and that his entries are being made at half price) -- then every penny of his +EV out of this is just from the sense of charity that his sucker friends are contributing. Zero of it comes from making additional entries into the pool.

How about this as the reality check on your scenario above:

50 friends play for $20 each, he doesn't play at all. He ends up +$500.

50 friends play for $20 each, and he plays for 50x$10. He's in for $500 with a 50/50 chance to win either $0 or $1000. That part, arising from the pool, remains a zero to him, and remains a zero to the other players. He's still only $500 up resulting from the benevolence of the other pool players who are essentially each paying a donation.

[Julio Riddols]

I just think its amazing someone can get 90+ people to go in on a pool like this for 20 a pop. I don't think the dude should be entering the pool at all to be honest, since he is already getting handed about 500 bucks for nothing.

[molson]

Maybe if I can buy one of those fake pregnancy tests I can get a bunch of people to chip in for my future kid's piano lessons.

[panerd]

Originally Posted by QuikSand

Your math is absurd here.

Even if we take your assertions at face value (that all the "charity" money go directly back into his pocket, and that his entries are being made at half price) -- then every penny of his +EV out of this is just from the sense of charity that his sucker friends are contributing. Zero of it comes from making additional entries into the pool.

How about this as the reality check on your scenario above:

50 friends play for $20 each, he doesn't play at all. He ends up +$500.

50 friends play for $20 each, and he plays for 50x$10. He's in for $500 with a 50/50 chance to win either $0 or $1000. That part, arising from the pool, remains a zero to him, and remains a zero to the other players. He's still only $500 up resulting from the benevolence of the other pool players who are essentially each paying a donation.

No plans to challenge you on the math (as they say "Don't get into a math fight with Quiksand, that's a fight you aint gonna win") I will however still stick with my premise that 3 entries is far more unethical than 1. You seem to be putting all of the blame on his friends for playing a game like this in the first place but my main point was since we do agree to play he certainly then takes it to a higher level by entering three times. We have probably all played 50/50 raffles at Catholic trivia nights or bowling and are all aware that 50% of the money is going to the prize pool and 50% to something else. I still think we would have reason to be pissed if we found out some of the priests (fill in whatever alternative you want) decided to enter for $10. Doesn't technically effect the math I guess but I think in a way it does (costs half as much to enter) and it definitely is pushing the grounds of ethics.

It's like by agreeing to enter and give $10 to the charity we also agree to be ripped off by a guy that doesn't have to.

[panerd]

Originally Posted by molson

Maybe if I can buy one of those fake pregnancy tests I can get a bunch of people to chip in for my future kid's piano lessons.

I play in stuff like this all the time. The "charity" is often times more general but the idea is the same. NCAA tournament, knockout pool, super bowl squares, raffles at bowling. You never play 50/50 stuff? I far prefer it to donating money for running laps or buying overpriced pizzas. It's still gambling with a chance to win some money.

[molson]

Originally Posted by panerd

I play in stuff like this all the time. The "charity" is often times more general but the idea is the same. NCAA tournament, knockout pool, super bowl squares, raffles at bowling. You never play 50/50 stuff? I far prefer it to donating money for running laps or buying overpriced pizzas. It's still gambling with a chance to win some money.

I've played in 50/50 pools for various charities and youth organizations, I guess what's throwing me off here is that is just for one guy's parenting expenses. Of course, I've never really thought about where the money from those pools goes, so maybe it's ultimate destination is similar. If the money went to team uniforms or something, then the parents are still saving money at the end of the day, I guess, it's not like you're helping a kid play a sport where otherwise he wouldn't be able to. (Though, there's also 50/50 pools that contribute money to THOSE kinds of situations....mostly though it seems like more of a social thing, like, you do it for my kids, I'll do it for yours - like how sometimes you bring your kids' friends to the movies, and sometimes the other kids' parents bring your kids.)

[panerd]

Originally Posted by molson

I've played in 50/50 pools for various charities and youth organizations, I guess what's throwing me off here is that is just for one guy's parenting expenses. Of course, I've never really thought about where the money from those pools goes, so maybe it's ultimate destination is similar. If the money went to team uniforms or something, then the parents are still saving money at the end of the day, I guess, it's not like you're helping a kid play a sport where otherwise he wouldn't be able to. (Though, there's also 50/50 pools that contribute money to THOSE kinds of situations....mostly though it seems like more of a social thing, like, you do it for my kids, I'll do it for yours.)

Oh yeah that's exactly it, its the unwritten exchange of charity stuff. This would be my friend's girl scout cookies or magazine sales or fill in the blank. Shit I would rather have a chance at $500 making some football bets than overpriced thin mints or a Better Homes and Gardens that often times is thrown away with its plastic cover on.

As far as where the money goes I guess my friend is maybe more honest to me? I don't know. I kind of always assumed that the kid who sold 100 candy bars got more than the kid who sold 20 and ultimately (like you said) that is less the parent has to pay for a uniform. (In my friend's case traveling for soccer tournaments)

[sterlingice]

Originally Posted by molson

Maybe if I can buy one of those fake pregnancy tests I can get a bunch of people to chip in for my future kid's piano lessons.

SI

[QuikSand]

Originally Posted by panerd

You never play 50/50 stuff? I far prefer it to donating money for running laps or buying overpriced pizzas. It's still gambling with a chance to win some money.

And this is the core of why you and I are never going to see eye to eye on this stuff.

You see the $20 pizza that's only worth $10 as a dumb way to support a cause. But you see the $20 football pool that's only worth $10 as more worthwhile. I see them as exactly the same thing.

That variation in thinking is the complete explanation why you end up down a path that concludes the guy is "taking advantage" by buying multiple pool entries, which I reject. That's the fork in the road, right there.

[CU Tiger]

Btw state laws vary, bu I'd wager a small fortune him running a raffle for a single person is illegal in your state.