Gilithin, on 2023-November-21, 15:53, said:

If I were into betting, getting 3-1 on a Biden win looks pretty tempting.

As Pescetom notes, I have botched up item 1 (the easy part!). I have to get the lingo straight. But I think I am right about item 2. Suppose candidate X gets 25 percent of the bets. Then if that candidate wins, we can give back 4 dollars on the dollar for a 3 dollar profit, right? If 1000 people bet, there is 1000 dollars in the pot, 250 people have to be paid off, each gets 4 dollars, but they put in 1 dollar, so the profit is 3 dollars. Is this called 3 to 1 odds or 4 to 1 odds? Calling it 3 to 1 makes sense to me, you either win 3 or you lose 1. But then we can't say that the odds are the reciprocal of the percentages. The reciprocal of 0.25 is 4, but I think the odds are called 3 to 1.

As I mentioned, I don't really know much about betting.

I still think I have the payoff structure right. If 25% of the people bet on Biden and you place a dollar bet on Biden, then if Biden wins you get $4, which is the $1 you bet and your $3 profit. Is that much right?

I have left item 1 as I wrote it, but I agree I said it wrong.

I also am not a better and yes, 3 to 1 sounds good. But I want to comment further, others can correct me if I misunderstand. For simplicity let's say the bets are a dollar each.

1. If you bet on Biden at 3 to 1, you place a dollar in the pot and if Biden wins you get 3 dollars from the pot so the profit is 2 dollars not 3 dollars. At even odds, 1 to 1, you put a dollar in and if your choice wins you get 2 dollars back for a 1 dollar profit. Ok, I suppose everyone knows this but I thought I would mention it.

2. Here is where I am uncertain. I think when you place a bet in this sort of scheme you do not actually know what the return will be if you win, the odds change as the game goes on and your return depends on the final odds. this would fit in with Shyams description of the percentages as being a reciprocal of the odds. Let's say that the final odds are as Shyam quotes, that these numbers give the payoff. And let's say Biden wins and that 1000 people have placed a bet, with 263 bets on Biden. The payoff for a dollar bet is then to be (1/0.263) of a dollar, and there are 263 such bets, so the total payoiff is (263) times (1/0.263) which is exactly the 1000 dollars in that was placed in the pot.

Of course whoever is running the game skims off something, I dunno, maybe 10%, so maybe the actual payoff is only (0.9) times (1/0.263) per dollar bet.

Am I basically right about this? At some point the betting closes, at the close of betting the payoff odds are determined by the percentage of bets that were placed on each candidate then the betting window closed. The percentages when you placed the bet, maybe long before the betting window closed, do not determine the payoff.

I am happy to go through life understanding little or nothing about betting, but since it came up I thought I would check my understanding with those who know this stuff