Posted in World Cup on March 2, 2010 @ 4:03 pm by Richard Hutchinson
LONDON – Warren Buffett said today that his Berkshire Hathaway Inc insurance division has sold an insurance policy that will pay out tens of millions of dollars if France win the World Cup.
He told the business channel CNBC: “I think we’re going to lose 30 million bucks or something like that” in the event the French national side wins in South Africa this summer.
The insurance was provided by Ajit Jain, a Berkshire Hathaway employee, to an unnamed client who wanted to protect themselves against potential losses on a French victory.
But betting experts today questioned whether writing such insurance was in breach of strict US anti-gambling laws. One leading European bookmaker told Live Odds and Scores: “The US law is quite clear. You can’t take sports bets anywhere apart from in Nevada and this sure as hell looks like a sports bet. You tell me what the difference is.
“If it were legal to offer sports insurance on this sort of event then every bookmaker in the world would set up in the US as an insurance broker and pay insurance taxes on every bet they booked. It would be the perfect way to enter the US market.
“Obviously without knowing how the insurance deal had been structured and which state or even which country it has been agreed in, it’s hard to say if anything illegal has been done. But if the contract has been agreed in Omaha I would think the Nebraska authorities might want to have a closer look at it.”
It would be 100 per cent legal for a European-based bookmaker to offer a bet against France winning the World Cup and some bookmakers even have their own insurance divisions. For example, Irish bookies Paddy Power run Airton Risk Management.
Ajit Jain specialises in insuring sports-related risks, such as top players’ contracts, prize draws, tournament cancellations and also natural disasters such as hurricanes, floods and earthquakes. He is based in Stamford, CT and is touted as a potential successor to Buffett, who has described Jain as “an extraordinary manager”.
France are rated 16/1 (bet $10 to make $160 profit) eighth favorites to win the World Cup; Spain are the 4/1 favorites, followed by Brazil at 5/1.
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