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A minus pool is a term used in betting to describe a situation when a book’s losses exceed its winnings. A minus pool occurs when there is a large amount of money wagered on a single outcome or selection, which reduces the odds and the payout for that outcome or selection. A minus pool can also affect the odds and the payout for other outcomes or selections in the same event, as the book tries to balance its books and avoid losing money.
A minus pool happens when there is an overwhelming favorite or a sure thing in an event, such as a horse race, a football game, or a political election. A large number of bettors place their bets on the favorite or the sure thing, expecting to win a small but guaranteed profit. However, this creates a problem for the book, as it has to pay out more money than it receives from the bets.
For example, suppose there is a horse race with four horses: A, B, C, and D. The odds for each horse are:
The total amount of money wagered on each horse is:
The total amount of money wagered on the race is $1175. The book’s profit margin is 10%, which means it keeps $117.50 and pays out $1057.50 to the winners.
If horse A wins, the book has to pay out $1000 x (1/10 + 1) = $1100 to the bettors who backed horse A. The book’s loss is $1100 – $1000 = $100.
If horse B wins, the book has to pay out $100 x (5/1 + 1) = $600 to the bettors who backed horse B. The book’s profit is $600 – $100 = $500.
If horse C wins, the book has to pay out $50 x (10/1 + 1) = $550 to the bettors who backed horse C. The book’s profit is $550 – $50 = $500.
If horse D wins, the book has to pay out $25 x (20/1 + 1) = $525 to the bettors who backed horse D. The book’s profit is $525 – $25 = $500.
As you can see, the book loses money if horse A wins, but makes money if any other horse wins. This is a minus pool situation, as the book’s losses exceed its winnings.
A minus pool affects the odds and the payout for both the favorite and the other selections in an event. The book tries to avoid losing money by adjusting the odds and the payout accordingly.
For example, in the previous scenario, if horse A wins, the book loses $100. To prevent this, the book may lower the odds for horse A from 1/10 to 1/20. This means that if horse A wins, the book only has to pay out $1000 x (1/20 + 1) = $1050 to the bettors who backed horse A. The book’s loss is reduced from $100 to $50.
However, this also means that the bettors who backed horse A will receive less money than they expected. Instead of getting back $110 for every $10 they bet, they will only get back $10.50 for every $10 they bet. This reduces their profit margin from 10% to 5%.
On the other hand, if the book lowers the odds for horse A, it may also raise the odds for the other horses to attract more bets on them. This means that if any other horse wins, the book will have to pay out more money than before.
For example, suppose the book raises the odds for horse B from 5/1 to 6/1. This means that if horse B wins, the book has to pay out $100 x (6/1 + 1) = $700 to the bettors who backed horse B. The book’s profit is reduced from $500 to $400.
However, this also means that the bettors who backed horse B will receive more money than they expected. Instead of getting back $60 for every $10 they bet, they will get back $70 for every $10 they bet. This increases their profit margin from 500% to 600%.
As you can see, a minus pool affects both sides of an event by changing the odds and the payout for each selection. The book tries to balance its books by making the favorite less attractive and the other selections more attractive. The bettors have to adjust their expectations and strategies accordingly.
A minus pool is a term used in betting to describe a situation when a book’s losses exceed its winnings. A minus pool occurs when there is a large amount of money wagered on a single outcome or selection, which reduces the odds and the payout for that outcome or selection. A minus pool can also affect the odds and the payout for other outcomes or selections in the same event, as the book tries to balance its books and avoid losing money.