A Guide To Calcutta Betting Auctions

A Guide To Calcutta Betting Auctions

Jack Andrews
Calcutta Auctions
March 6, 2024

calcutta auction gavel


With March Madness around the corner, some of you may be gearing up for your own springtime Calcutta betting auctions. A Calcutta auction provides bettors with the ability to gamble and match wits against their friends or peers in a challenging format.

Perhaps you’ve heard about various Calcutta betting auctions but have been afraid to give one a try. No problem. We’ll explore what a Calcutta betting auction is, how they can be advantageous to bettors, and how to build a model to compete in one.

We’ll also disclose some of the basic strategy secrets that betting professionals have utilized in high stakes auctions like the Bet The Process podcast Calcutta auctions.


What Is a Calcutta Betting Auction?

A Calcutta betting auction is a form of pool betting where the assets are auctioned off in random order. Participants compete to bid a purchase price for the asset. The winning bids for each asset combine to make an aggregate pool for the competition. No one knows what the total pool is going to be before the bidding starts, but they do know how pool is awarded, based on a scoring matrix. 

Sounds clinical, right? In actuality, Calcutta betting auctions are pretty straightforward. Much like a season-long fantasy draft, you’re purchasing an asset to control for the length of a tournament or season. The performance of your asset relative to the payout schedule dictates what amount of the aggregate prize pool you’ll win. 


The Components of a Calcutta Betting Auction

An easy to understand example of a Calcutta betting auction is one which revolves around the postseason in the NFL. Our friends at the Bet the Process podcast are big fans of Calcutta auctions. They have run them for March Madness, major golf tournaments, and for the NFL. 

BTP NFL CalcuttaLast year, they conducted a Calcutta for the 2022 NFL playoffs. You can watch how it played out on their YouTube coverage of the auction. The 14 teams were auctioned off among seven bidders. 

The total of all the winning bids created a prize pool worth 693,000 RufuCoin (rc). While there is no house edge in their Calcutta betting auctions, the folks at BTP prefer to play it safe and not openly indicate they are wagering with U.S. dollars. So in all their correspondence they use a fictional currency called RufuCoin. (I can assure you that the people involved in these auctions wouldn’t be doing this for funny money. Let them have their ruse.) 


The Scoring Matrix

An important part of any Calcutta betting auction is the scoring matrix. If this was just a winner-take-all auction where the team that wins the Super Bowl gets 100 percent of the prize pool then the auction would resemble the market odds for the Super Bowl. It would be fairly unimaginative. Instead, a good Calcutta includes a mix of skill-based handicapping and some outside-the-box proposition bets that aren’t as easy to handicap. This adds a layer of variance to the results. 

Calcutta scoring matrix


As you can see, 80 percent of the BTP NFL Calcutta was made up of dividends based on playoff wins that escalate as the playoffs go deeper. The Rams were worth 33 percent of the prize pool by starting in the Wild Card round and running the table. If the 2022 No. 1 seeds, Green Bay or Tennessee, had won, they would have netted 29.5 percent of the pool after their first-round byes. 

To spice things up, various prop bets made up the remaining 20 percent of the prize pool. Some of these had value that increases the purchase price of otherwise unattractive assets. For instance, biggest loser by point differential or most turnovers. Being able to estimate the relative value of all facets of the scoring matrix is important when competing in a Calcutta betting auction.


The Advantages of Betting Into a Calcutta Auction

0% house edgeThe biggest advantage of betting into a Calcutta is the lack of vigorish. If done as a friendly competition among peers or friends, typically there is no rake taken from the prize pool. That was the case with the BTP Calcutta. The other major advantage is that you will exit the Calcutta auction feeling as if you just got the best of it. 

Since you are bidding your estimation of the relative worth of an asset, when you have a winning bid you feel you have positive expected value. When you reach your limit and stop bidding on an asset you feel is overpriced you’re letting someone else take the negative EV hit. As a result, at the end of the auction you’re probably patting yourself on the back for a job well-done in beating these suckers.

That’s the allure of a Calcutta betting auction. Situations where two people disagree as to the relative value of an asset can create big betting opportunities. We don’t see it much in today’s betting markets with many regulated sportsbooks timid about stepping out with an opinion. Calcuttas provide opportunity for bettors to gain positions on a wager they might not otherwise be able to get. 


Calcutta Auctions Reward Advanced Handicapping

Another advantage to Calcutta betting auctions is they reward those who are able to handicap more esoteric outcomes than their peers. As we mentioned, the BTP NFL Calcutta had 20 percent of the prize pool dedicated to prop bets. You can’t use the market lines at Bookmaker or Circa to devise a projection of winning those props. 

You’ll need to do your own handicapping to estimate the value. If you have a competitor who thinks the value in those props is completely random you’ll have a different projection of value than they do. That, in turn, leads to betting opportunities. It also helps inflate plus-EV money into the general pot size. 


Disadvantages of Betting Into a Calcutta Auction

Many of the same reasons that make Calcutta betting auctions advantageous can also be a double-edge sword. You are only as good as your projections. If your projections are wrong you may end up paying dearly for it.  

Moreover, variance and luck play large roles in a Calcutta betting auction. An early-round upset can result in a quick minus-100 percent ROI. In the case of the BTP NFL Calcutta only 14 assets were auctioned off. The action was fairly distributed in that auction with five people buying two teams, Preston/Jeff buying three, and Johnny from Betstamp having a sole team. Larger auction events, like the Masters golf tournament, result in dozens of assets to be auctioned. Be sure you visualize how much or how little of the field you might own.


Calcutta Betting Auction Basic Strategy

If you’ve watched any of the previous BTP Calcutta auctions, it may appear to be a bunch of high stakes gamblers bidding up a storm. In truth, each of them are likely deploying their own strategies. While it might not be fair to completely reveal the recipe for everyone’s secret sauce. There are some universal basic strategies that will assist you should you find yourself bidding in a Calcutta betting auction during March Madness.


The Importance of the First Asset

Calcutta auction first bidThe winning bid of the first asset auctioned is a very important cog in the auction. It sets the relative value for every other asset auctioned after it. That first asset will likely be a bargain or a costly overpayment by the winning bidder. Furthermore, it’ll be the responsibility of that winning bidder to determine the outcome. 

Let’s use the example from the BTP NFL Calcutta. The first team up for bid was the Las Vegas Raiders. Preston Johnson, bidding on behalf of the host, Jeff Ma, won with a bid of 29,000rc. If someone felt that the Raiders, based on how far they expected that team to go and how much they contributed to props on the scoring matrix, represented 2 percent of the prize pool, the projected pool was now going to be 1.45 million rc. However, if someone felt that the Raiders were 4 percent of the projected pool, then it was projecting out to be a pool size of 725,000rc. 

But the strategy moves beyond that. With only 1/14th of the final winning bids known, it’s tough to say what the aggregate pool size will be. For Preston, the strategy is to make sure he didn’t overpay for this pick. This may include intentionally bidding up some other teams to make others potentially overpay. Any overpayment by another relative to your value becomes plus-EV in the pool. 

At this point, the first asset winning bidder has a chance to really control the auction. They could create an auction tempo that prices out some of their lesser-staked competition. With unlimited funds they could buy up every asset and effectively cancel the auction. Sometimes a good defense is to not let an auction bully win the first asset. Even if that means overbidding. 


Mid-Auction Strategy

As the auction moves on, a clearer idea of the potential prize pool comes into view. All the auction participants update their spreadsheets to see their value as each asset is auctioned. They also need to keep an eye on what assets are left to auction. This is because their value is relative to all the other asset values. This is why overbidding is not a fatal mistake if there are  still some assets left to auction. 

An overbid can be corrected by driving up the price of other assets. In an auction like this with NFL teams, there are direct correlations between teams that could potentially play each other early. If you drive up the price of a team opposite your asset, you create more direct value in your asset’s path. 

Also, diversifying your portfolio is key. A majority of bidders in the BTP NFL Calcutta chose to take positions in opposite leagues to minimize the chances of cannibalizing their own chances.


Late-Auction Strategy

Late in a Calcutta betting auction, the relative value is more certain. The final pot size begins to get better approximated. It’s also a time when a bidder can take advantage of both auction fatigue and FOMO. 

In a smaller auction, like BTP’s NFL Calcutta, going into the final team there was one bidder who had not yet won an asset. Johnny from Betstamp. This creates a situation where he may experience FOMO, Fear of Missing Out, and be willing to overpay to have an asset in the tournament. As a result, it’s an opportunity for others to drive up the price on him and add value to their own positions. 

Conversely, in an auction where many assets have been auctioned off and everyone already has assets, there can be auction fatigue that sets in. Many bidders already have enough exposure and don’t wish to add more. This artificially deflates the bidding action and can result in some late auction value for those willing to step up and make a bid. 

The key points in a Calcutta betting auction are at the very beginning and the very end. That’s where value can be generated and where mistakes can be made. Generally, the gambling doesn’t end after the auction closes. There are often a lot of behind the scenes equity swaps to help offset some positions. 

If you want to see how things played out in previous years’ March Madness Calcutta, all the action is archived on Twitter at @BTPCalcutta.


Building a Calcutta Auction Model

After reading this, are you interested in possibly participating in a Calcutta betting auction? You’re going to need to do a little homework before you dive in. You’ll need to come to the auction with your estimates of how much each asset is worth relative to the aggregate pot size. To do this, you’ll need to do some basic projection and modeling. 

Again, we’re using last year’s BTP NFL Calcutta as our example. We will work our way backwards. The first question to answer would have been: Who will win the Super Bowl?

We know that the Super Bowl win was worth 13 percent of the prize pool. Market prices at the time of last year’s auction were a guidepost. We could take the projections at the time from a sharp book and remove the vig to get an implied probability of each playoff team’s chances. 

Super Bowl Odds TableAt the time of the auction, here were the Pinnacle odds for the Super Bowl winner, along with their corresponding implied probability. The final column removes the vig by dividing each implied probability by the sum total of the implied probabilities. 

Using just this information, we saw that Arizona had a 3.01 percent chance of winning the Super Bowl. Since winning the Super Bowl was 13 percent of the prize pool, we multiply that by .13 to get the 0.39 percent of the prize pool equity represented by Arizona winning the Super Bowl. We can do that for each team.


Working Your Way Backward and Forward

To repeat this step for the Conference Championship as well, make a table for each conference. Your NFC teams’ vig-removed odds will sum to 100 percent and your AFC teams’ vig-removed odds will sum to 100 percent. Each team’s results are multiplied by 0.1, because a Conference Championship win was worth 10 percent of the pool, and added to their Super Bowl winning equity. 

When it comes to the Divisional Round, you had to get more creative. Skip over the Divisional Round and work out the results of the Wild Card Round first. You can build a matrix based on the projected outcomes of the Wild Card games based on the market lines. Again, remove the vig from the market lines. Add it to their previously determined equity.

For the Divisional Round, it’s more of a Sudoku puzzle. You’ll need to estimate the Divisional Round pairings based on probabilities from potential Wild Card results. You then need to  estimate some lines based on the potential matchups. One way to do this is using power ratings like the kind you found at the time on the Unabated NFL Simulator, or build yourself.

Unabated NFL Playoff Power Ratings


For instance, if there was a 70 percent chance that Cincinnati was going to play Tennessee, you could look at the power ratings here and subtract Tennessee plus their home field advantage from Cincinnati’s power rating and get roughly -2.5. In the NFL, that’s about a 55 percent probability of winning (you can use the Unabated Alternate Lines Calculator to derive that). You multiply that 55 percent by .7 and then add that to the probabilities for other potential Divisional matchups for Tennessee.

Oh, I didn’t say this would be easy.

When finished, be sure to checksum your work and add this equity to your Super Bowl, Conference, and Wild Card win equities per team.


Factoring Props Into Your Model

How you approach estimating your prop equity is up to you. However, be sure that everything tallies up to the, in this case, 20 percent of the pool. One method suggestion is to start with an even distribution across all 14 teams, and then nudge each team up or down based on your qualitative analysis. 

As an example, given an equal distribution 14 teams have a 7.14 percent chance each of winning the prop bet. Using the example of “biggest loser” by point differential. It was far more likely to be Pittsburgh or Philadelphia than Green Bay or KC. You could have bumped Pittsburgh and Philadelphia to 12.14 percent each and taken Green Bay and KC down to 2.14 percent. Maybe you bump the Raiders up to 10.14 percent and take Tampa Bay down to 4.14 percent. Arizona and San Francisco  bumped up to 9.14 percent while Buffalo and Tennessee go down to 5.14 percent. It’s all qualitative, but it’s an exercise in right-sizing your projections.


Adding it all Together

In the end, you will have probability percentages for each team for every facet of the scoring matrix. By multiplying those probabilities by their pool percentage, you have the relative worth of each team in the auction. If you’re ambitious, you can build a Monte Carlo simulator to simulate out these projections to get a better handle on tail events. 

This becomes your value guidepost. It is the percentage amount of the total prize pool that you feel each team is worth. The only thing you don’t know is how much the prize pool is going to be. That’s where the science of Calcutta betting auctions meets the art of Calcutta betting auctions. That first asset up for bid has a large influence in determining what kind of auction this will be. 


Key Takeaways

  • The Calcutta betting auction format is a fun way to gamble among peers or friends without the house taking a cut. 
  • In a Calcutta auction every participant leaves the auction feeling like they just got the best of it.
  • Building a model to compete in a Calcutta involves projecting out the probability of every possible outcome relative to the scoring matrix.
  • In the actual auction, the first asset is important and sets the tempo for the rest of the auction.
  • Look for value early and late in Calcutta betting auctions.

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