More March Madness Math

After last week's post on the ideal March Madness strategy, a reader and I had a pretty in-depth conversation about whether there is any point to make a serious effort in filling out brackets. His argument, and I'm quoting here, is "how many guys follow basketball all season, make intelligent and well-thought out picks, only lose the pool to the dumb blonde who picked based on how pretty she thought the teams' uniforms are." I'm going to be honest, I've witnessed something like this before, but I don't think it refutes my point.

(from Flickr user Mouzzy)

Think about it like this. Imagine that you play in the same NCAA pool every March. The buy-in is $10 and it's winner-take-all and the prize is $100. Now let's say you carefully study teams and statistics and make solid picks. You still lose 8 out of the 10 times. Should you consider this a failure?

Absolutely not. In this scenario, you've paid in a total of $100 ($10 each year) and you've collected $200 for your two wins. Thus, your expected value is $10 per year, a 100% return. Incredible for any investment, let alone in sports betting.

But it's really really hard to put this into perspective, because the NCAA tournament comes just once per year, so most people will consider this outcome a failure. If you knew you could consistently make a 100% return by making some bet, even if you didn't win every time, or even the majority of the time, you'd make that bet as often as you could. You can't with the NCAA tournament, because it occurs too infrequently, and most people forget what happens from year-to-year.