Despite having over 700 billion dollars in assets under management, Goldman Sachs really isn’t that much different than you or me. They like to watch a good game of futbol over a pint. In fact, every four years they come out with their World Cup preview:

Lovely! Included in their WCP is a table that lists the odds of each team winning the cup. Now, you might be aware that there are wagering markets on the World Cup.

Whoa, are you ok? You must be an American. Here, have a sip of water. Relax, I fainted too when I first heard people actually wager on international sporting competitions. Feeling better? Good. Back to the wagering.

Because Goldman Sachs gave percentages for each team’s title chances, and because this guy was awesome, we can figure out how much they should wager on or against each team.


While that might work for most people (such as Nate Silver, whom I’ll get to in a bit), that won’t work for an animal as large as Goldman Sachs. As such, I gave Goldman Sachs a budget of $10,000,000 and estimated how much they could bet into the market without moving the lines so much that they are damaging their expected value. In some cases that was simply the maximum bet allowed on a line at a certain site, while in other cases I had to look at the market depth at multiple locations and use certain estimates as to how much more could be offered and filled at that price.

Without further ado, Goldman Sachs 2014 World Cup wagers:

Brazil to win: $3,130,000 to win $9,390,000
Iran to win: $5,000 to win $15,000,000
Netherlands to win: $145,000 to win $5,800,000

Japan not to win: $500,000 to win $2,400
Ivory Coast to not win: $540,000 to win $3,000
Mexico to not win: $504,000 to win $1,500
Columbia to not win: $540,000 to win $9,000
Chile to not win: $500,000 to win $8,000
Uruguay to not win: $720,000 to win $20,000
Argentina to not win: $470,000 to win $100,000
Spain to not win: $560,000 to win $80,000
England to not win: $732,000 to win $24,000
Italy to not win: $600,000 to win $20,000
France to not win: $550,000 to win $20,000
Portugal to not win: $504,000 to win $15,000

Between Brazil, Iran, and the Netherlands, Goldman Sachs gives themselves a 54.2% chance of winning outright. I find it highly amusing that their single best possible outcome is an Iran victory.

I promised I would come back to Nate Silver. I’ll write a separate post, but the short story is I am giving Nate $100,000 to invest in the World Cup, with the formulas provided by John Kelly, and the individual game odds from 538.

Spoiler alert: Nate is going to be investing over 52% of his bankroll game one on Brazil ($52,600 to win $17,884 on Brazil -0.5).

Good luck Nate!

  • Matthias Kullowatz

    “Whoa, are you ok? You must be an American. Here, have a sip of water. Relax, I fainted too when I first heard people actually wager on international sporting competitions. Feeling better? Good. Back to the wagering.”


    Can you explain to this admittedly naive American why Goldman Sachs can’t bet “too much.” I understand how lines move, but that’s only after the bet, right?

    • Seth Burn

      Sure. The market only allows a certain amount to be bet at one time. A sportsbook has a bet limit, while an exchange only has so much money being offered on that side (and price) at the time. Some sportsbooks allow you to rebet after they’ve adjusted the line. As for exchanges, what you can do is post an offer (and in this case the size might not be limited), and wait for various parties to accept your offer in bits and pieces.

      • Matthias Kullowatz

        Got it. That makes sense. Thanks!

  • Gadiel Szleifer

    I assume he is betting full kelly then?

  • Gadiel Szleifer

    Anyway assuming that’s the case, I am wondering why the choice of full kelly?

    Sure, he has a good model–I agree with his methodology and even if I didn’t of course I’m more likely to be the one that’s wrong about this than Nate Silver. But this isn’t counting at blackjack where you can pinpoint your edge with perfect precision. The world cup is a tiny sample so anything could happen, but in the long run I would expect full kelly to go broke every time betting soccer.

  • Dan

    Any chance of a follow-up post explaining Kelly wagering in more detail? I tried to do some research but articles either seemed to go for A vs B outcomes (less useful for football), or generalise to n-state quickly and send my head spinning!


    • Seth Burn

      Possibly. I’d need to find a good event to use as an example.

Improve Performance and Productivity in Your Club:
State-of-the-art Football Analytics