2019 March Madness Calcutta Auction Pool: Strategy, Tips, Picks
Brian Losness-USA TODAY Sports. Pictured: Ahmaad Rorie
Whether it is online, live or a silent sale the thrill of a competitive bid can be an exciting activity to a gambler. That’s the beauty of an auction.
While I have participated in auctions for classic cars, sports memorabilia and Kurt Cobain’s guitar, adrenaline for me is a March Madness auction, Calcutta style.
Calcutta March Madness pools work like this:
You auction off all 68 teams to the highest bidder. There are different methods of play — from each person naming a team one at a time, randomized nominations or bidding on blocks of seeds. For the purposes of this post, we will assume every team is randomly auctioned.
But here’s the fun and difficult part — there’s no set entry fee for a Calcutta pool. You may get a great value early in the auction and overpay later. A No. 4 seed may go for more than a No. 1 seed. It varies wildly by pool.
So there are two basic things you need to do beforehand:
- Estimate how much money you think will be in the pot
- Determine the probability of each team reaching each round
Payout percentages will be determined beforehand and will vary depending on what rules you want to use, but each team will collect a percentage of the pot for winning a game. For strategy in this post, we will assume 1% of the pot for each of the first two rounds, a 3% pot share for a Sweet 16 and Elite 8 victory, 5% for making the finals and 6% for the team winning the national title.
Under this format, a national title team will earn 19% of the total pot, runner-up 13% and so forth with the remaining teams.
The fun part of a Calcutta auction is bidding on teams while keeping a projection of the final pot total, because that’s what it’s all about — value relative to the final pot. But like I said, it’s also a huge challenge because you don’t know what the final pot total will be.
Using Vegas odds, our college basketball power ratings or our Bracket Simulator, you can calculate the probability of each team reaching each round. Then when bidding, you want to make sure you’re paying a smaller percentage of the pot than the expected value of what that team could return. We’ll explain below.
Higher seeds will of course have a better chance of advancing further, which is why they go for more money. Virginia may be favored by 7.5 points or more until the Final Four. This is a team that is capable of winning the 19% overall pot.
Using The Action Network parlay calculator, I can determine that Virginia’s toughest path to the Final Four will have odds around even money, in total. A Final Four visit in our Calcutta auction pays 8%, with a title paying 19% of the total pot.
It’s imperative that you’re running a calculation of the total pot is kept during the auction, dictating Virginia’s maximum purchase price of 8% of the expected pot. Any winning bid over 8% will cut into any hedge strategy for a potential 19% payout.
How to Estimate the Total Pot
Here’s the hard part. Let’s say Virginia goes for $100 as the first team nominated. What does that mean for the rest of the prices? There’s no guarantee Duke will be the most expensive team. There’s no ironclad way to know that paying 8% of the expected pot for Virginia will actually be a good move, even if you feel like it’s a good value initially.
Estimating the total pot becomes easier as the auction progresses, but there are two strategies pre-auction that will help execute the best Calcutta bids.
First, handicap each individual game by knowing the point spread and moneyline cost. When you bid on a favorite, understand there is an opposing underdog with a moneyline that you can use to hedge.
Secondly, handicap the crowd. Some pools consist of people that have a budget of $50 while other auctions I have participated in have reached 5-figure bids. If you shoot over the budgets of all other participants, you may be stuck with the worst value in the contest. So try to poke around and feel the crowd out.
Another strategy is to fire on the first top seed to be thrown out. Generally, the first top seed is the cheapest. As the bar is set, the other owners will try and catch up and overbid. Seeds that are favorites in the betting market will exceed their value in bidding in relation to the first seed thrown out.
In a decade of Calcutta auctions, I have never seen the first top seed NOT be the cheapest in the contest. With strategy in your back pocket, here are a few potential sleepers and their coordinating Calcutta auction strategy.
No. 12 Oregon Ducks
- Spread/Moneyline: -1/-120 vs. #5 Wisconsin
- When/Where: Friday 4:30 p.m. ET | San Jose, Calif.
- Calcutta Pot Price Limit: 1.35%
Oregon is a perfect team to bid for as long as the price does not exceed 1.35% of the projected pot. One of the keys to a Calcutta pool is the ability to hedge out of any first round game and free roll the remaining rounds after potential victories. In this specific case, Oregon opened a +2 underdog against Wisconsin before heavy money moved the Ducks to -1.5.
While Ken Pom predicts a 32% chance Oregon beats Wisconsin, the gambling market will have the Ducks listed around -125 on the money line. In the Calcutta auction, you would aim to buy the Ducks at 1% only to spend that equal amount at a sports book on the +105 money line on the Badgers. In this scenario, a loss earns a small percentage on the Badgers money line, while a Ducks victory is a free roll into the second round.
Per The Action Network Bracket Simulator, Oregon would possibly face Kansas State in the second round. We project a 4-point spread, giving the Ducks a 35% chance to win on the money line. A maximum purchase on Oregon should be 1.35% of the projected pot, with an equal value hedge on Wisconsin.
No. 15 Montana Grizzlies
- Spread/Moneyline: +15.5/+1000 vs. #2 Michigan
- When/Where: Thursday 9:20pm EST/Des Moines, Iowa
- Calcutta Pot Price Limit: 0.07%
One of the best Calcutta auction moments in my gambling life was just last year. The UMBC Retrievers were open for sale and one bid came through for a grand total of $16. For the price of a Golden Corral buffet, the owner had a 16 seed ready to beat the Virginia Cavaliers. The rest was history and this Calcutta auction owner was rewarded $1300 on his $16 dollar investment.
These upsets will always exist in March Madness, which is why a Calcutta pool will give you more bang for your buck with the underdogs. Montana is in a repeat opening game against a Michigan team that made it to the national championship last year. The advanced metrics are there for the Grizzlies as they are No. 6 in effective field goal percentage, 26th in 3-point percentage, and No. 6 in experience.
Perhaps the most telling stat is Minutes Continuity, defined by Ken Pom as “determining what percentage of a team’s minutes are played by the same player from last season to this season.” Montana ranks 19th in the nation similarity to the 2018 UMBC team that ranked 24th in Minutes Continuity.
Ken Pom suggests a 7% chance that Montana defeats Michigan, giving us a great target for how much to spend in relation to the total pot (0.07%).
No. 4 Florida State
- Spread/Moneyline: -10.5/-620 vs. #13 Vermont
- When/Where: Thursday 2:00 pm EST/Hartford, Conn.
- Calcutta Pot Price Limit: 2.05%
For this selection, I wanted to take a team that might have some legs in this tournament. Florida State just lost in the ACC Championship to Duke, previously losing in the Elite 8 of last year’s tournament. The Seminoles are a tough team to keep up with as far as athleticism and rank No. 9 defensively in efficiency.
An opening round game against Vermont with a point spread of -10.5 indicates a 92% chance of victory for Florida State. The following round will come against the winner of Murray State-Marquette. The Racers or Golden Eagles will be forced into a physical style on Sunday, as Florida State would be money lined anywhere from 68% to 92% to win the game.
The Sweet Sixteen is where this team is a make or break, but recent history in defeating Gonzaga helps. The moneyline percentage through the first weekend for Florida State will fetch a number just shy of 2%. With a Ken Pom win percentage of approximately 10% against Gonzaga, a maximum bid of 2% of the pot is recommended.
Any wins for the Seminoles from the Sweet 16 on would be extra frosting on a cake.