Problem in structuring a gambling venture
 

This is set up:

Say a buy in of 50 poker chips entitles you to join 19 other participants in an auction draft of NCAA tournament seeds. Draft order is a randomly drawn snake.

What way do you balance out the fact that the guys picking in the top 12 have the best chance to win a portion of the 1000 poker-chip pot? (with the payout more or less getting the majority of your buy in back by getting a team to the elite 8, along with getting 100 chips for a final four appearance)

Given that 20 doesn't divide into 64 seeds evenly (yes, it's a 68 team field; I'm using 'seeding' as criteria here), it kind of means that if it were a straight draft that each selector will get 3 picks with the last four allotted in a manner to be decided.

What if a draft selector chooses a 1-4 seed with the first pick, they waive their chance to pick for the rest of the draft? So statistically these 16 guys have the best chance of winning something owing to the history of high seeds in the tournament, but guys drafting later have more chances of getting to a payout?

Feedback is appreciated, let me know if something isn't clear...

About the best you could do would be to divide the field of 64 into 20 parcels with equal expected value based on previous NCAA results based on typical performance of a seed and the way you stage your payouts. Assuming you got this far, when each player's turn to draft came up, they would select their parcel and then populate it with teams at the designated seeds. For example a parcel might include a 1 seed and a 15 seed. Another parcel might have a 5 seed, a 6 seed and two 7 seeds.

The first step would to developing the parcels determine the probability of finishing in each position in the tournament based on historical seeding. Then you need to divide those seeds into parcels and simultaneously play with the payouts to make each parcel have equal expected value. This doesn't sound trivial.

Why don't you just let them bid on teams? The 50 poker chips buys you 1,000 bidding points. Now put the 64 teams out there in an open bid. Every day you award the top 6 bids or so and people re-bid. That way no one can complain because everyone has a chance to get every team, depending on how they want to spend their money.

I don't really have a gambling problem, but I know it can be a problem if you have a problem with it.