During the Conference Championship weekend for 2014, Gallery Furniture, a Houston based furniture store offered up refunds to customers who a) correctly picked the winners of both the AFC and NFC championship games, and b) bought more than $5000 worth of furniture. As shown from the video below, the promotion worked either great, or horrible, depending on your point of view.
When companies run promotions like this which have the possibility to return a lot of money to people, they usually do some sort of statistical analysis to see what the odds of winning actually are. If they're not comfortable with that sort of risk, companies will frequently insure their promotions so they won't bear the full risk. The insurance company calculates the odds of success, bills the company making the promotion, then pays out the winnings if the contestant hits.
That leads us to two questions. The first is relatively easy to answer: What are the chances of each combination of winners in the Championship games? The second is more difficult: What will people be betting on?
The games themselves were very well matched. The Broncos and Seahawks were a combined 26-6 in the regular season, while the Patriots and the 49ers were "only" 24-8. Though their seeding didn't really reflect it, this was really a matchup of the two best teams in each conference. So, how did Gallery Furniture lose so much money?