Parimutuel Betting wha?

So for those of you who actually visit my site in the 'eflesh,' rather than through google reader or some other similarly functioned RSS reader, you might have noticed a new link along my sidebar. One directing people to Monocle Madness, a new online lottery and ATX betting site. First let's take a look at their primary betting model for the Alliance Tournaments and go from there.

Their bets operate on a "Parimutuel" betting system, a rather obscure, but good system that allows winners, no matter the odds to take home some money, while essentially paying the house just a small commission.

Simply put instead of betting against the house you bet directly against the people betting on the other side. So if more people bet the same way as you, the amount of money you take home if correct is stuck at just 1.08 of investment. However if you bet against the crowd and win, the return can be significantly higher. They seed each of the matches with some small starting capital, and let it build organically from there.

Bets climb as match time approaches, but for one thing, this style of betting encourages you to get your friends to bet opposite from yourself, thus increasing your winnings. Last weekend some of the matches were topping out at about 1.2+ billion isk in a pool. Not bad for a new site.

As explained, the house takes a small cut of the action for being the holder of all the money, but the vast majority of the winnings are returned to players and not kept by the house. This plays in well with the overall feel of Monocle Madness, aka people winning instead of the house winning. The betting is not only very exciting, but also very social.

Maximum bets are in place to prevent the return on a bet from dropping lower than 1.08 percent, but as the pool increases on both sides, the maximum bet does as well. At initial buy in, 5 mil is the maximum bet, but with just a few minimum bets, the maximum can be up to as high as a few hundred million. from there even more.

Strange to think that Monocle Madness and it's link to ATX betting just came from "a human API calculator" and a bunch of friends and alliance mates betting last year, to a full fledged betting and Lottery site this year. But it was an idea and opportunity that one of the Founders, Tony Two Bullet, couldn't ignore.

"We saw all these micro lotto sites coming up, and we were saying that there's a market for the opposite style of lotto."

Monocle Madness, in addition to AT betting, actually finds year round appeal with their mega style lotteries. These lotteries are the opposite of micro lotteries like Somer Blink, or BIG Lotteries. Think of it as a pool of prizes that each entry has a chance to win one prize or stays in the running until all the prizes are gone, or it wins. In short layman terms, the Madness system is based around many tickets but also many prizes. To illustrate;

Errr, wait, no. More like the following; You buy 20 tickets for a specific pool of prizes, lets say there are 120 prizes in the pool. Now, in a micro lottery like Somer, you have a chance to win a prize or even all the prizes if you get lucky and get the one winning ticket, but in a mega lottery like Monocle Madness, each one of those tickets has a chance to win one out of the 120 available prizes, you might even end up with more than one winning ticket out of your 20. Odds of winning "something" are generally held around 1 in 10, sometimes higher when it does not negatively effect the prize pool by making it too easy to win something. 

Tony says that "Mo-Ma's ideal goal here is to promote lots of (thousands?) of EVE players to feel confident in buying smaller tickets frequently and have a chance at a variety of big money prizes, rather than going bankrupt on heavy betting for single prizes."

Suddenly each ticket a person buys is not only a chance to win the prize, but also a chance to win another prize. For me that is all about maximizing my chance to win something, even if I don't get the main prize, I might still make my money back, or win other good prizes.

Currently Madness has only been open to the public for a few weeks, and their prizes are either generated in house, bought from alliance mates/friends, or bought off the open market. That's why when you look at their site you don't see hundreds of lotteries in action, but just a few. They will be looking to scale their operation up as time goes along, and interest increases.

Madness will be allowing people to convert ship winnings back into isk in the form of 'credit.' You can either bet or buy more tickets with that, or... Unlike some other sites, they will allow players to convert their winnings from the site back into game isk. Tony said "We expect a lot of people to claim the ISK in conversion. Otherwise we're only providing prizes in Jita with plans to expand[to other trade hubs in the future]."

Their in game channel is Monocle Madness, come join and take a look. It's filling up right now with speculation about the upcoming matches.