Sheldon Adelson Rolls The Dice

Click here for an explanation of the probability theory behind Adelson's $100 million bet on Romney. It's from a diary on Daily Kos by Melanie in IA, and explains the calculation of EV (Expected Value). Here's the Wikipedia definition of "expected value":

In probability theory, the expected value (or expectation, or mathematical expectation, or mean, or the first moment) of a random variable is the weighted average of all possible values that this random variable can take on. The weights used in computing this average correspond to the probabilities in case of a discrete random variable, or densities in case of a continuous random variable. From a rigorous theoretical standpoint, the expected value is the integral of the random variable with respect to its probability measure.

For his $100 million bet, Adelson stands to win -- in addition to casino-friendly legislation -- $2 billion a year (payoff: 20 to 1) in reductions to his personal taxes; if the estate tax drops to zero, he and his family stand to win $11 billion (payoff: 110 to 1). Winner, winner, chicken dinner!

(Free bonus jackpot: War with Iran! Payoff from investments with your defense contractor cronies: You need more columns on your calculator!)