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Buying the Extra Half Point Is Now Called 'Executing the No-Push Endorsement'

Don't like those pesky laws against sports gambling stopping you from placing a hefty wager on France to win the World Cup? Well, just stop in to your local insurance agent. Because while you can't legally place a bet on the outcome of the tournament, it's OK to take out an "insurance policy" AGAINST THE RISK that France might emerge victorious.

According to this Bloomberg article, Berkshire Hathaway overlord Warren Buffett disclosed in an interview this morning on CNBC that one of his insurance companies (it's so hard to keep track of them all) issued a policy that will result in a payout of $30 million if the French, underdogs to the tune of 12 to 1 according to Doc's Sports, manage to shock the world. The article talks about other "unusual" policies issued by Berkshire companies, including guaranteeing contracts of pro athletes, insuring against certain weather risks and backing companies that sponsor long-shot fan participation contests (blindfolded half-court shot, anyone?). Unusual? Maybe. But not flat out gambling on the outcome of a sporting event.

Maybe there's some aspect of this policy that makes it less an end run around the prohibition on gambling, assuming the policyholder is even a U.S. person or entity. Maybe it was purchased by a manufacturer of t-shirts that already started a run of "Spain: World Cup Champions 2010" Heather Gray 3/4 sleeves. Having seen more than my share of insurance (and reinsurance, which is just insurance of insurance) policies during my BigLaw days, I can say that they're generally a bit longer and more intricate than the betting tickets printed out in the Vegas sportsbooks (of which I've also seen quite a few). So, somewhere in the fine print, maybe there's a justification. But based on the article alone, it sounds like if you've got enough cash and connections, you can find a way to take the Bulls and lay the points, the law be damned. Wonder what the premium would be if I wanted to protect myself against my car being stolen and the Yankees winning the World Series?

Posted by Eric Lipman on March 1, 2010 at 03:32 PM | Permalink | Comments (3)

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