Quote:
Originally Posted by Enoch Root
To a 'house' that ticket is worth $1.46M.
You hold the ticket. And you could collect bets of $1.46M on Vegas to win.
If Vegas wins, you collect $2.5M but you pay out $1.04M to the people that bought Vegas to win above (net $1.46M)
If Vegas loses, the original ticket gets framed, but you collected $1.46M in losing bets (above).
Either way, you have $1.46M when it's over.
The guy holding the ticket isn't a bookie (presumably), so he can't do that. But a house can. So they offer him $1M. Tidy arbitrage for them.
If I was him, I ask for $1.25M (and take it if offered)
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He can also just hedge by betting on Washington.
Washington is +125 meaning he can guarantee himself about 1.425 million profit by betting 1.075 million on Washington and hedging his bet. He would need to borrow that money but he has guaranteed collateral in the ticket so getting that loan should be simple (assuming bet is with a big sports book)
So his ticket is guaranteed ~1.4 million - interest on a 2 week loan if he decides to hedge (Or sell off the bet as you stated above to a high roller)
Only an idiot would take the 1 million as some are suggesting.
This is a perfect example of people not understanding the proper math and getting ripped off.