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Super Bowl Prop Bets and Monte Carlo Simulation

This Sunday, the Denver Broncos and Seattle Seahawks will square off in Super Bowl XLVIII. For many fans, making a wager of some sort—such as betting on the point spread, the over-under, a family/office pool, etc.—is a part of the experience. Most bets are relatively straightforward; however, if you’ve ever been to Las Vegas to watch the big game, you’ll find Super Bowl wagers are taken to an entirely different—and more complex—level. In addition to traditional wagers, you’ll find an almost unlimited number of proposition—or “prop”—bets that can stray into more peripheral aspects of the game.  Consider the following prop bets from last year’s Super Bowl between the Ravens and 49ers:

  • Who will win Super Bowl MVP? (Winning bet: Ravens’ QB Joe Flacco at 11/4 odds)
  • What color will the Gatorade (or liquid) be that is dumped on the winning coach? (Winning bet: Clear/water at 7/4 odds)
  • Will Alicia Keys’ rendition of the national anthem be over/under 2:15? (Winning bet: Over, at 2:42)

One of the more talked-about on-the-field wagers of this year’s game centers around how many touchdown passes Broncos quarterback Peyton Manning will throw against the Seahawks vaunted defense. During the regular season, Manning set single-season NFL records for touchdown passes (55) and passing yards (5,477) and led Denver to 603 regular season points, which is also a record. Countering that attack will be the Seahawks, which featured the league’s stingiest defense. Here’s a comparison of Manning and the Seahawks’ per-game passing stats:

 

Manning

Seahawks

 Passing yards/game : 342.3  Passing yards allowed/game:  172
 Passing TDs/game: 3.4  Passing TDs allowed/game: 1

 

“If you really spend your time on it, I think you can make money on prop bets,” says Dr. Wayne Winston,  a professor of operations and decision technologies at the University of Houston Bauer College of Business and a nationally respected sports probabilities expert.  On his website, Winston offers a variety of sports probabilities, and he’s even written a book, Mathletics: How Gamblers, Managers, and Sports Enthusiasts Use Mathematics in Baseball, Basketball, and Football, that breaks down how probabilities are utilized in athletics.

So how many touchdowns will Manning throw in the Super Bowl? Las Vegas has its opinion, and Winston—who ran 10,000 simulations using Monte Carlo simulation—has his. As the table below indicates, Winston and Vegas agree most closely on whether or not Manning will throw zero or one touchdown pass. However, the gap widens—with Winston having less confidence in Manning—when calculating the possibility of two, three or four TD passes.

 

Manning Super Bowl TD passes Winston’s Estimate Vegas’ Estimate
0 9.53% 9.09%
1 22.40% 22.22%
2 26.33% 33.33%
3 20.63% 28.57%
4 12.12% 18.18%
5 or more 8.70% 9.09%

 

 

Obviously, such predictions aren’t an exact science, but it is interesting to see how probabilities can differ, based on the data inputs utilized. And if your inputs are better than Vegas, then you may stand a chance to come out ahead. That said, Winston hasn’t determined how many times Manning will utter the phrase “Omaha” at the line of scrimmage on Sunday. Not surprisingly, Vegas has considered it, and has the over/under at 27.5.

Managing Risk at America’s Big Game

As the Super Bowl gets under way Sunday in New Orleans, event organizers will be working feverishly behind the scenes, making certain that all aspects of the game go off without a hitch. From plans that focus on the potential for severe weather to controlling alcohol intake by fans to ensuring the halftime show goes on, organizers and insurers are working around the clock leading up to, during and immediately after the game. I contacted Chris Rogers, director of risk control at Aon Risk Solutions and Lori Shaw, sports and leisure practice leader for Aon Risk Solutions to get their take on the risks and how they are handled.

RM: New Orleans is known for its party atmosphere.

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How will event organizers protect employees, fans, vendors and facilities from crime and unruly visitors?

Chris Rogers: Event organizers will work closely with local law enforcement personnel and emergency response personnel to assess any risks to employees, fans, vendors or the facilities. A threat assessment will be completed and preparations made and put into place that serve to mitigate or eliminate those threats. The NFL and team owners have made a commitment to providing a safe and secure venue for everyone’s enjoyment.

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They have also worked closely with organizations, such as [Techniques for Effective Alcohol Management] T.E.A.M. Coalition, to promote the responsible use of alcohol and have provided VIP tickets for the winners of designated driver contests held throughout the season. Event organizers have received outlines and guidelines relating to security matters that are intended to be shared with their personnel and event attendees that provide additional support for those events during this time.

RM: What types of insurance needs to be in place to protect event organizers from myriad of possible risks?

Lori Shaw: Event organizers need to consider not only the traditional lines of insurance purchased by a business enterprise, such as general liability, property, workers compensation and auto, but also specialty coverages designed to protect event-specific activities, such as athletic participant legal liability, volunteer and participant accident, liquor liability, directors and officers, coverage for pyrotechnics, third-party property damage, terrorism (and threat of terrorism) and event cancellation, including adverse weather, communicable disease and non-appearance of essential performers/players/entertainers.

RM: How do event organizers navigate advertising and sponsorship exposures?  

Shaw: For large events, the advertising risk is usually carried by the broadcaster. The risk of broadcast interruption could be passed to the event organizer, and if that is the case, the event organizer would look to secure broadcast interruption insurance.

RM: What happens in the case of extreme weather, such as an off-season hurricane or rare Louisiana snowstorm?

Rogers: The NFL and other sporting organizations have developed plans over the years to address the additional and unique challenges posed by extreme weather. These plans have been developed in conjunction with public and private weather services to ensure that the best information is available to event organizers so that they can respond properly and in a timely manner. These plans are further augmented by the development of emergency contingency plans that address what will be done if the weather affects the game, either just prior to the beginning, or even during the game. If something occurs during the game, the stadium’s “shelter-in-place” plan would have to be activated.

RM: What if the half-time headlining act cannot go on? Are event organizers prepared with a backup plan?

Rogers: A backup plan will greatly depend upon when it becomes apparent that the headliner cannot go on. If it is a few days before the event, a substitute act could possibly be arranged. If the change is something that is sudden and occurs just before halftime, it will mostly depend upon who is involved and what might be an alternative. Perhaps the rest of the pageantry can be expanded or they could cut to the broadcaster’s booth for additional commentary on the game.

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Super Bowl: A Game of Risk

The most-watched sporting event of the year is upon us. This Sunday, the Packers will take on the Steelers in a battle of brawn. But such a large event undoubtedly poses serious risks to everyone in attendance, including vendors, teams and spectators. To understand how the NFL and the stadium handle such threats, I contacted Chris Rogers, director of risk control for Aon Risk Solutions’ national entertainment group with a few questions.

RM: For an event the size of the Super Bowl, there are bound to be concerns regarding the safety of fans, vendors and the facilities used. How does the NFL and Cowboys Stadium go about protecting these assets?

Chris Rogers: As with any event of this nature, the sponsors and promoters are very concerned with fan and participant safety. All responsible organizations spend a large amount of time in the planning and preparation phases necessary to put on such a grand event. Safety and security will be at the forefront of all deliberations during decision-making times. These plans and preparations will have begun virtually the same day that it was announced when and where the Super Bowl would be played and continues right up to, and during, the game itself.

Today, most of these plans will follow the basic outline of the National Incident Management System (NIMS) and their model of Incident Command Structure (ICS), which provides for a structured approach to coordinating all the various entities that will be involved. Using this system, risk and threat assessments will be completed that attempt to identify what threats may be posed and how best to eliminate or mitigate them. These plans will also incorporate the training needed by safety and security personnel working the event.

RM: Does the league or the stadium incorporate weather policies and procedures into the overall emergency planning process. If so, how?

CR: Weather is a large factor in the planning and preparation process. Using historical data and assistance from public and private weather services, various scenarios will be mapped out and preparations will be made for response personnel. These plans would include situations before the game as well as during. Plans will also be reviewed regarding “Sheltering-In-Place” procedures should that be required.

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Weather-trained experts will be on site during the game for immediate consultation and assistance.

RM: What types of events could cause a cancellation of the game? How would that be managed?

CR: The events that might be cause for an event of this nature to be canceled would include: severe weather situations (lightning, earthquake, flooding, tornadoes, etc), civil disorder, major fire, terrorist attack, structural collapse, major news events (assassination of a political figure, outbreak of war), as well as pandemic illness (SARS, flu, etc.).

Each of these situations will have to be addressed by risk and security personnel to determine how likely the event might be as well as how severe it might be. In other words, they will conduct a risk assessment for each during which they will address the likelihood of occurrence and how well prepared they are to handle such a situation as well as what the consequences might be if the event occurs. After this assessment, they will begin to decrease their vulnerability by outlining current controls and capabilities as well as a plan for reducing those vulnerabilities wherever they can. These reductions could involve the “hardening” of the venue with new barriers (additional perimeter fencing, additional security personnel, additional lighting, etc.) as well as implementing new restrictions on deliveries and access to the venue or providing additional training for staff and response personnel.

Another aspect of this will be who will be responsible for deciding when and if a cancellation is needed. This will be decided well beforehand and would include procedures for advising all participants that a cancellation is in effect. These procedures will obviously vary depending upon when the decision is made (before the event, just prior to the event or during the event) as each will have unique challenges associated with it.

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RM: How does the stadium work to prevent possible terrorist attacks. What types of security measures are taken inside and outside of the stadium?

CR: The potential for a terrorist attack is an ongoing threat that any stadium hosting an event must be prepared for. For several years now, large public assembly venues have been “hardening” themselves as a target in order to discourage an attack or at least make it as difficult as possible for someone to do harm. This hardening includes structural changes (additional barriers, increased security patrols, new access control systems, closed circuit TVs, etc.) along with procedural changes (employee and vendor background checks, training, delivery appointments, etc.).

There will also be many meetings with law enforcement agencies to review any known or suspected threats. Pictures of any known threats will be circulated and discussions held regarding possible scenarios that might be an issue. And if the event should be designated as a Special Security Event (SSE), additional military and government personnel and capabilities will be made available as well.

RM: Who do you think will win? Why?

CR: As for who will win, GO PACKERS. As for why, because they have a quarterback with a great last name (even though he spells it differently).

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