What is a Calcutta Auction for March Madness? Calcutta Auction Strategies

<p>AP Photos</p>

AP Photos

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OddsJam StaffJune 1, 2022, 09:19 AM

A Calcutta auction is a type of group betting that is growing in popularity especially around March Madness, though it can be adapted for almost any tournament (or even a full season if you want to get creative).

Essentially, a Calcutta auction is an auction among a group of people where teams, players, etc. are “auctioned” off one by one. As the tournament goes on, a portion of the pot goes to each team/player for any pre-arranged accomplishments.

In a golf tournament, it may be depending on finishing position, while for March Madness teams typically earn a portion of the total pot for each win as they progress through the rounds. 

How Does a March Madness Calcutta Auction Work?

For March Madness Calcutta auctions, each team is auctioned off in a randomized order. The highest bidder for each team reaps the accomplishments of that team for the duration of the tournament. With each win that team picks up throughout the tournament, the highest bidder’s portion of the pot grows.

How To Set Up a Calcutta Auction For March Madness

Setting up a Calcutta auction for March Madness can be complicated, especially if you have never participated in one before. First of all, be sure to determine and make clear to all involved the payout percentages — more on that down below.

If the auction is in person, it can be fun to write each team on a slip of paper and draw it out of a hat. If online, sites like calcuttaleague can run the auction for you like ESPN or Yahoo or any other fantasy site does with their drafts.

Rules

One key rule to remember is that the percentage of the pot paid out to each team is cumulative, and does not stack after each round. For example, let’s say you won the bid on Gonzaga and they win two games in the tournament.

A fairly standard payout structure is where winning one game is worth 1% of the pot and two games is worth 2% of the pot. If the Bulldogs are eliminated in the Sweet 16, ending their run with two wins, their final payout for you is the 2% for two games, NOT the 2% plus 1% for the first round. 

The best part about Calcutta auctions is how group-oriented they are. It’s great to do with friends or co-workers and encourages friendly trash talk. Whatever group you are in can customize the rules and payout percentages however you’d like, but be sure the payout adds up to 100% of the pot. 

Assuming the play-in teams are paired together forming one bid, 32 teams will not win a game and lose in the round of 64, earning no winnings.

  • 16 teams will win one game and lose in the round of 32
  • Eight teams will win two games and lose in the Sweet 16
  • Four teams will win three games and lose in the Elite Eight
  • Two teams will win four games and lose in the Final Four
  • One team will win five and lose in the Final
  • One team will win six and be the champion

As mentioned, these payouts are fully customizable as long as they add up to 100%, but here is an example payout structure.

0 wins1 win2 wins3 wins4 wins5 wins6 winsBiggest upsetWorst loss
# of teams3216842111 (divided up if ties)1 (divided up if ties)
% of pot per team0%1%2%4%7.5%12.5%21.5%1.5%1.5%
Total % paid in that round0%16%16%16%15%12.5%21.5%1.5%1.5%

The bottom row adds up to 100% (always check the math!), so this payout structure would work.

How To Value Teams

When deciding what to bid on certain teams, take a look at your bracket (or mathematical predictions) to see how far you think those teams will go. Of course, early on in an auction with no spending limit, it’s hard to know exactly what the pot will be. Obviously, the biggest payout will be the champion, but if you can get an 8/9 team for 0.5% of the pot and 1% is paid for winning just one game, that is positive expected value. There is around a 50/50 chance that the team wins that one game to double your investment, and of course, they could always win more. 

Calcutta Auctions & Bankrolls

Speaking of spending limits, you will have to discuss with your group if the auction will have a minimum cap per person or if it will be a truly open auction. This is entirely personal preference, but a minimum makes sure everyone gets involved and a maximum ensures the pot doesn’t get so high that someone can’t afford to participate at all. Be considerate of what other people would like. 

Pros & Cons

Pros

  • Socially fun
  • Root for and follow your teams throughout the tournament 
  • Fully customizable

Cons

  • Possibility of early elimination and spending the later rounds with no involvement
  • A little complicated to understand at first

Calcutta Auction Strategies

Typically, and especially in a large group, do not be afraid to bid early. Once the auction progresses, people realize they don’t have as many teams as they would like and are willing to overpay to get in on the action. I’ve seen a 3-seed at the end of the auction go for more than double what another 3-seed went for in the beginning when everyone was still feeling out the process.

The one exception to this strategy is if your Calcutta has a spending limit. In this case, I’ve seen people wait until the end and snatch up value when everyone is approaching their limit and hesitant or unable to bid.

Another strategy is to drive up the pot even if you don’t specifically want the team being auctioned. Especially when there is no spending limit, the pot can go as high as people bid, and a higher pot benefits everyone who already has won teams.

For example, if Kansas is being auctioned off and you notice someone with a Jayhawk sweatshirt who talks about Kansas all the time starts to bid, it’s probably fair to assume that person will do almost whatever it takes to own his favorite team.

Bid them up so that they have to put more money into the pot. Be careful though, there is always a chance they won’t one-up you and you’ll be stuck with your bid.