A:

The NCAA Men’s Basketball tournament is well known for creating madness among college sports fans. Each year millions tune in to watch the games, with many fans participating in bracket challenges. Bracket challenges have become incredibly popular, with everyone from employers to major sports networks creating their own to see who can pick the tournament champion.

In 2014 Warren Buffett, the billionaire investor, decided to get in on the action by announcing his own bracket challenge. The payout: correctly guess the winner of each of the tournament’s 63 games and win \$1 million every year for life. This year he's sweetened the offer, doubling the prize if a team from his home state of Nebraska wins the tournament. In the past years, news of the contest dominated media outlets for weeks and thousands of bracket entries poured in, but Buffett had almost nothing to fear because he had statistics on his side.

How likely is it that someone could pick a perfect bracket? Not very. During the 2013 tournament, no one who created a bracket on either Yahoo! or CBS picked more than 50 games correctly, and many seemingly perfect brackets turn sour after the second day of the tournament.

The tournament may involve more teams, but brackets only contain 64 teams due to play-in games. To get a perfect bracket a participant would have to pick 63 games correctly (every team that doesn’t win the championship loses one game). Each game has two possible incomes: either Team A wins and Team B loses, or Team B wins and Team A loses. To calculate the total number of ways to fill out a bracket take the total number of possible outcomes for each game (2) and multiply it out 63 times: 2 x 2 x 2….x 2, or 2^63. The odds come in at one in over nine quintillion - odds that don’t seem very promising.

Basketball games are harder to predict than simply flipping a coin, though. Teams in the tournament are assigned a seed, with seeds ranging from 1 to 16. The best teams are given the 1 seed, and the worst teams a 16 seed. The opening games pit seeds against their opposite: a 1 seed plays a 16, a 2 seed plays a 15, etc. History has shown that top seeds don’t lose to bottom seeds often, meaning that the odds of picking one game correctly are actually different than 50/50. This makes calculating the odds of a seeded tournament nearly impossible to figure out, with estimates ranging from 1-in-5 billion to 1-in-128 billion.

Are you filling out a March Madness bracket this year? Better check out Betting On March Madness? Watch Out For The Tax Man.

RELATED FAQS
1. ### Are 401(k) contributions tax deductible?

Find out what the tax advantages of a 401(k) retirement plan are. Learn what tax brackets gets the most benefit and why deferred ... Read Answer >>
Related Articles
1. Insights

### The March Madness Effect

Colleges experience an uptick in giving when their teams compete well, and increased ticket, apparel and memorabilia sales boost the bottom line.

### 5 Ways March Madness Makes Money

With the popularity of the college basketball tournament, there's a lot of cash changing hands.
3. Managing Wealth

### Buffett Sponsors \$1 Million/yr March Madness Contest Again at Berkshire

Berkshire employees are testing the odds of betting on the right NCAA Basket Brackets
4. Tech

### How To Game The Video Game Industry

Investopedia explores the business, current developments, future trends of video games industry and how the overall industry makes money.
5. Insights

### How Much do Wimbledon Champions Make

And other numbers from the oldest tennis tournament in the Grand Slam, including the price of strawberries and cream.
6. Tech

### How The Video Game Industry Is Changing

Video game creation has become increasingly complex, and the cost of creating a game to run on one of the major consoles has risen with this greater complexity.

### How To Raise Seed Capital and Grow Your Startup

To get a business off the ground, entrepreneurs need a clear understanding of how to strategically position themselves for VC firms and angel investors.

### How Major League Baseball Makes Money

Major League Baseball is big business. Let's take a look at where the money comes from.
9. Tech

### Play Video Games; Become A Millionaire

New ways to benefit from this industry have emerged over the last few years. The best part is, they're very profitable.
10. Investing

### Video Game Add-Ons: Growth Driver or Inhibitor?

Video game makers shift to a 'games as a service' model, but the trend is a two-edged sword.
RELATED TERMS
1. ### Federal Tax Brackets

The Federal tax brackets are the tax ranges set by the Internal ...
2. ### Bracketed Sell Order

A bracketed sell order is a short sell order that is accompanied ...
3. ### Marginal Tax Rate

A marginal tax rate is the amount of tax paid on an additional ...
4. ### Income Shifting

Income shifting reduces overall tax liability by transferring ...
5. ### Warren Buffett

Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire ...
6. ### Series A Financing

Series A financing is the first round of financing undergone ...