The Calcutta Auction – Not Another March Madness Pool

If you are a serious sports fan, a fairly serious gambler or work in some aspect of high-finance, you may have heard your friends or co-workers kicking around the term “Calcutta auction”, particularly if its close to “March Madness” time (I first came across the Calcutta auction during my analyst years in I-banking). What the devil are they talking about you ask? Quite simply, a Calcutta auction is any auction occurring the Indian city of Calcutta. Kidding! (well, sort of, because technically that IS a correct definition). In the world of sports gambling, Calcutta auctions generally refer to a gambling pool where entrants “buy” teams (players, horses, etc.) in an auction-style format (I do not condone gambling for real money. Capital in this article refers to imaginary funds, or “points”). The easiest way to describe and understand this is to look at the most common modern-day example: the men’s college basketball tournament. Here is a very brief overview:

1. An auction time and location are selected

2. Since there are 64 teams (I know, I know…65 with the play-in game), there will be 64 teams up for auction

3. Teams come up for auction in a random order

4. Entrants begin bidding for the team currently on the auction block. In order for an entrant to “own” a given team, he must be the highest bidder at the end of the bidding round

5. There is no limit on the number of teams a bidder can buy

6. The number of games a team wins in the tournament determines the percentage of the pot the owner is awarded (early round wins are worth a much smaller % of the total pot than later round wins)

That is basically it for the semantics of the auction. Sounds simple, right? Well, in theory it is, in reality, however, Calcutta auctions are highly complex and involve a great deal valuation work (which is why its so popular with investment bankers, hedge fund analysts, P/E analysts, lawyers and anyone else involved in valuation work). If a Calcutta-style auction sounds interesting to you, keep on reading.

A Detailed Overview of Calcutta Auctions

Now that you know the basics of a Calcutta auction, lets dive a little deeper. I will present this example using a men’s college basketball Calcutta once again (keep in mind this info is just as applicable to any other sports…professional football is a pretty common Calcutta format as well).

So, the word is out that a men’s college basketball Calcutta is forming in your office / school / group of friends. If you are interested in participating, the first thing you will need to figure out is how large the pool size is targeted to be (or if you are organizing, how big you want it to be). Estimating the total size of the pool is a critical component to being successful in a Calcutta. You do not want to spend the majority of you capital on a single team, only to find out that that team represents 50% of the total pot. You will also want to determine the % payout of each win in a given round.

For example, if a team you own wins a first round game, it may only be worth 0.5% of the total pot. If they go on to win the championship, that final win may be worth, say, 10% of the pot. It is CRITICALLY IMPORTANT to understand that the total amount you spend on your teams is not an accurate representation of your at-risk capital. This is because the only way you could lose 100% of your capital is if NONE of your teams win a single game, which if you do your homework, is an incredibly unlikely scenario. If you are willing to lose a given amount, you should be willing to spend a decent amount more than that on your teams.

Your next, and most important step, is to do some research on the teams for which you will be bidding. The way people approach this step varies wildly. Some people rely on a “hunch”. Others go with team loyalty – e.g. I went to School X, therefore I HAVE to own them or I love the team’s mascot and want to root for his team. The last group of people, and generally the most successful, conduct sophisticated statistical analysis using complex excel models. The last group is able to approach the auction in the most objective way possible, as they aspire to ascribe “fair” values to teams. This is the approach I take and it has proven quite successful. Now that you have determined what teams you would like to own, its auction time.

The auction is generally conducted in person at a set time and place. The rules of the auction should be clearly spelled out beforehand (e.g. how to signal you want to bid, how long after the last bid you deem the bidding closed, etc.) to avoid any conflict. Each team will be put up for auction until all are sold (In some auctions, the 13-16 seeds are packaged as a single team). Let’s say you win the teams you wanted. What now?

Once the auction has wrapped up and you have your teams, most of the hard work is over, but the fun is just beginning. This is what it must feel like to be the owner of a professional sports team! You will be rooting for the teams you own harder than the school you graduated from (or are currently attending as the case may be). It’s a blast! You will also find yourself updating your cumulative winnings and trying to figure out how many more wins you need to break-even.

If you participate once, you will undoubtedly be hooked!

What Does ‘Backing a Team to Win’ Mean in Betting?

‘Backing a team to win’ is a common term used in betting. In the olden times, only this kind of betting used to take place. Traditionally, a bookmaker was involved in such type of a betting process. Actually, he/she was the one to carry out the whole transaction for you. It is here that these bookmakers tried their best to deceive the innocent people. Now is the time, when everything is done without any hassles over the Internet. There are plenty of online betting exchange sites that allow you to indulge in bet exchanging and change your destiny. Bookmakers are now out of the scene and that is a plus point for bettors.

In simple terms, backing can be defined as the act of making your selection and betting on it. When you back a team to win, you place your bet predicting that your chosen horse will win in the race. You can place bet on other sports as well. The main thing to be emphasized here is that you predict the outcome of the game as to who will be the winner and place bet on it. When you exchange bets, you have the liberty to demand a higher price. For doing this, all you need to do is simply click on the back button and fill the figure of your choice. Once you have entered the figure revealing your bet, it will then shift to the lay section. If your bet price matches with the laying price of other bettor, your bet will be placed. In other case, if there is nobody to lay your selection, then you will have to either lower down your bet price or take what has been offered. It all depends on how enthusiastic you are and how you perceive things.

Let us try to understand the above mentioned concept with the help of an example. Let us suppose that the best offer in the market for draw at France vs Italy is 2.80. At this point of time, you need to go through betting exchange rates. Let us consider that you succeed in finding an odd bet of 2.90. Now this kind of a bet can certainly be considered and you can think of backing or buying the bet. The procedure is almost similar to what was practiced earlier when bookmakers were involved.

In case it happens that you select an event, make selection, place bet and make a clear cut mention of your stake but are not satisfied with the final result, then you have the option of back order available with you. Let us consider for a while that you are happy with the available odds and your desire is to bet at odds 3.10, then you can place the order for backing at 3.10 by putting 100 pounds on stake. In this situation, you will have to wait for the time till you succeed in finding a punter who is ready to draw the match at 3.10 by laying 100 pounds. If someone is ready to match your bet deal then your bet can be placed. If you find a bettor who is ready to put 30 pounds on stake at 3.10, then for the left 70 pounds, you need to look for another bookmaker who can lay bet at 3.10. This is how backing is done.

The Many Forms of Internet Censorship

Many countries engage in some form of internet censorship, whether it is in the form of banning an online community or a full-blown censoring of popular websites such as YouTube or Wikipedia. Internet censorship is defined as “control or suppression of the publishing or accessing of information on the Internet.” Countries vary in how strict or lax the control is over the Internet, but even the most lax countries still target certain websites such as religion-related sites or social networking sites, and ban them accordingly. The censoring of the Internet has brought about different resources for accessing restricted sites, mainly in the form of circumventors, such as anonymous proxy servers.

In 2006, Reporters without Borders published a list of 13 Enemies of the Internet including: Belarus, Burma, China, Cuba, Egypt, Iran, North Korea, Saudi Arabia, Syria, Tunisia, Turkmenistan, Uzbekistan, and Vietnam. These countries practice the most extreme form of Internet censorship and often retaliate against citizens who violate censorship laws. The OpenNet Initiative (ONI) also uses a classification system and categorizes countries as pervasive, substantial, nominal, and watchlist. Pervasive includes countries that practice the most extreme cases of censorship, especially banning websites with political content. Many of the Internet users can be certain to face imprisonment for even visiting these websites. A partial list of nations in this category includes: Iran, Burma, and China. Substantial includes countries such as: South Korea, Yemen, and Saudi Arabia. Nominal countries include: Australia, Canada, and India. Watchlist countries include: Morocco, Norway and Russia.

Another method for classification is based on what content is blocked by certain countries. Websites classified as “political” include content that strays from the political view of the government. This category also includes human rights, religion, or other social causes that restrictive governments attempt to control. “Social” sites are related to sexuality, gambling, drugs and other subjects that could be deemed as “offensive” by a nation. The “conflict/security” category focuses on sites that relate to wars/skirmishes, dissent, or other types of conflicts. The “internet tools” classification includes websites used to circumvent censorship, anonymous proxy surfing, language translation websites, or sites that promote the use of Instant Messaging or E-mail services. Countries may block some or all of these types of websites, depending on the content and the strictness of the regime.

Aside from restrictive governments, many companies censor and monitor the Internet in their offices. Most websites are blocked that are considered leisure, and not related to the employees’ working environment. IT departments may block certain domains or track the Internet usage because employees have no reason to be using certain websites during office hours. Again, circumventors and other such software can be used to gain access to blocked websites, but IT departments are quick to act so that they can stop the more popular proxy sites from being used.

Internet censoring also comes in other forms such as portal censorship or online community moderation. Portal censoring is basically when a portal, such as of Google, excludes websites that would, under normal circumstances, be included in a search. The portals may censor sites for a number of different reasons, particularly when required by law. The censored sites are basically hidden and made invisible to an average user. The other from of censorship comes from moderators or administrators of online communities blocking content that they feel should not be posted in their forums, or that do not follow the forum’s rules and guidelines.

While governments and businesses are restricting the way people use the Internet, new methods are always being created to circumvent restrictions and gain access to censored websites. With many restrictive governments using imprisonment as a method to implement censorship, it is becoming more important to be able to circumvent the censors. A popular method for circumventing blocks is The Onion Router, also known as TOR. This service allows users to stay invisible against traffic analysis by bouncing the network connection over various gateways around the world. Users do not have direct access to the site they visit, instead they are sent through a series of connections, called relays. The relays are individually encrypted and sent along to the next gateway until it reaches the exit node and the user can then see the website that was requested. A third method for circumventing blocks is Java Anon Proxy, commonly referred to as JAP, which allows users to choose which network, run by independent organizations, to surf through. Once chosen, the data stream is scrambled and mixed with other users’ data streams so that anyone trying to steal or restrict the data flow is confused by the muddled stream they see. Psiphon software was directly created to circumvent the tight Internet censorship of countries such as China and Cuba. The traffic between clients and servers is encrypted as the data is being transferred. Users in countries with tight censorship can log in and send a request to a server located in another country to gain access to blocked websites. Another method called sneakernets allows people to transfer electronic data, such as computer files, by manually carrying them on portable storage devices, such as USB drives or CDs. This method could also be used in conjunction with other methods, since the encrypted data can be sent as usual but the encryption keys could be delivered by sneakernet. Regardless of government restrictions and censorship, this data can be moved freely since it does not travel over a network at all. One of the most popular methods to access censored content is by using anonymous proxy servers. These are usually the easiest to find and use, since they can be found in abundance by doing a simple Google or Yahoo search. Anonymous surfing software and websites allow a user to hide their IP address and surf freely. A good proxy will also encrypt your connection so that anyone trying to spy on the flow of data will not be able to see what is being sent and received.

Internet censorship varies in seriousness depending on the country or business, but ultimately a user’s privacy rights are being taken away by tight controls over Internet usage. Many different services are available to help a user take back their privacy and avoid being censored or spied on by restrictive agencies. A user should always be familiar with their surroundings and know how extreme or lax the Internet usage policies are before implementing any of the anonymous surfing services. Policies will be different and range dramatically depending on location so knowing the environment is important to staying protected while surfing the Internet.

The SP Bookmaker

The term SP Bookmaker means Starting Price Bookmaker which generally refers to receiving bets at fixed odds or starting price.

This type of gambling was legal in Australia only for licensed bookmakers working on course meaning at the racetrack. In the 1930’s with the radio and telephone in full swing the races could be heard without going to the track. Lots of people liked to have a punt on the horse racing but often could not go to the track to put on the bets.

The Melbourne Cup was well known by the Australian punters and everyone wanted to have a small bet.

This being the case it made it very difficult for most people to put a bet on if they could not get to the track.

The Illegal SP Bookmaker, it could be anybody. It could be a small timer operator run by a single person taking minimal wagers from one or two friends including neighbours, family members, workmates etc.

Runners as they were known who would go around the neighbourhood collecting wagers from clients in their own houses, at the local hotel, in back streets and so on. Cockies short for Cockatoos who would be placed in positions of high points and other keen viewing advantages to warn Runners and Bookmakers of approaching law authorities.

Then there was the large scale telephone based SP Bookmaking ring involving people answering phones all day long taking thousands of bets worth thousands and thousands of dollars just in one day.

Of course this was all illegal but the authorities were slow to act and did not realise the magnitude of money being generated by this activity in the racing industry. In fact police often turned a blind eye to this as it seemed harmless and was in fact the SP Bookmaker supplying a service to the public.

Eventually the Government finally caught onto it and realised something lucrative was happening in this part of the racing industry. They also realised that it was not generating any taxes and therefore a Royal Commission was launched in 1959.

In 1961 due to the Royal Commission an Off Course Totalisator Agency Board was introduced.

This now resulted in some of the money that was being wagered on racing bets being returned to the racing industry. Punters could now place bets without fear of the law.

As time went on TAB Agencies were showing up everywhere, Hotels, Clubs, shopping centres and so on.

The racecourse Bookmaker still had short comings. In Australia legalised Bookmakers were unable to operate off course shops similar to other countries around the world. So the majority of bookmakers were only allowed to take bets from people at the track up until the 1990’s.

The death of the SP Bookmaker and the final nail in their coffin is near.

Corporate bookmakers were then able to offer another alternative to the punter thanks to new legislation. The Northern Territory Government could now issue Licences offering phone and online gambling to the Bookmakers. Online Bookmakers are now legal and bets can be placed with them from customers in Australia and overseas on all Australian racing and sporting events by almost any means.

With all this new legislation and control by the Governments of Australia the SP Bookmaker slowly died out. They are no more.

To place a bet now, you can use your mobile phone to ring your local legal Bookmaker at the track or at his office, have a credit account with them if you wish. You can place a bet on via the internet with one of many online bookmakers, go to the local pub and use the TAB, place a bet using your TV remote control handset while watching the race or even do something different, go to the racecourse and have a bet with an oncourse bookmaker.

Who will be next to die, not the oncourse Bookmaker I hope.