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Hole in one probability can vary by a large factor depending on hole location and green contour. If that's all they consider, either they're heavily profitable

Hole in one probability can vary by a large factor depending on hole location and green contour. If that's all they consider, either they're heavily profitable or some tournaments could break even.

dgritsko 4y ago
True. Approximate skill of the golfer could also be an important factor - the article even mentions three LPGA golfers getting holes-in-one in the same tournament. Presumably they were quite a bit more talented than your average entrant.
- pjlegato 4y ago
  The article mentions in passing that pro golfers are usually excluded from the standard / cheaper insurance policies.
supernewton 4y ago
From the article, a 100 golfer tournament with a hole in one prize of $7500 costs $187 in premiums. If the hole in one probability of each golfer is 1/12500, the expected payout is only $7500/12500*100=$60, so I'm going with "hugely profitable".
- eru 4y ago
  I'd go with: the actual actuarial cost of the hole-in-one payout is a small part of their business. You still have lots of paperwork and taxes and general business overhead.
- listenallyall 4y ago
  Now add labor cost of a person to stand by the tee box all day and validate potential winners.
Slartie 4y ago
That's exactly what I thought as well: build a golf course that's effectively a giant funnel, with the hole deep down in the bottom spot where the ball inevitably ends up. The entire thing must be large enough to have enough "yardage" to get a low insurance premium. Register that course for a nice 10m$ hole-in-one insurance. Profit!
- SamReidHughes 4y ago
  That is of course what the 16th hole at Augusta National is (on Sunday). That pin placement has to have netted them at least $3M in ad revenue.
jiscariot 4y ago
I was responsible for cutting cups the morning on one of these tournaments (long, long ago). On the par three in question, it was due to be a middle front (red) pin (we rotated a 3x3 grid). I gave it a little over a pin length off the fringe, not being generous at all, because there was a water hazard about 2 feet off the front fringe. They didn't like how hard it was so someone had to fix my work. The only thing else I remember was the hole in one was for nice car and they had a witness that sat their all day, who could attest/validate if one occurred.

Hole in one probability can vary by a large factor depending on hole location and green contour. If that's all they consider, either they're heavily profitable or some tournaments could break even.

dgritsko 4y ago

True. Approximate skill of the golfer could also be an important factor - the article even mentions three LPGA golfers getting holes-in-one in the same tournament. Presumably they were quite a bit more talented than your average entrant.

pjlegato 4y ago
The article mentions in passing that pro golfers are usually excluded from the standard / cheaper insurance policies.

supernewton 4y ago

From the article, a 100 golfer tournament with a hole in one prize of $7500 costs $187 in premiums. If the hole in one probability of each golfer is 1/12500, the expected payout is only $7500/12500*100=$60, so I'm going with "hugely profitable".

eru 4y ago
I'd go with: the actual actuarial cost of the hole-in-one payout is a small part of their business. You still have lots of paperwork and taxes and general business overhead.
listenallyall 4y ago
Now add labor cost of a person to stand by the tee box all day and validate potential winners.

Slartie 4y ago

That's exactly what I thought as well: build a golf course that's effectively a giant funnel, with the hole deep down in the bottom spot where the ball inevitably ends up. The entire thing must be large enough to have enough "yardage" to get a low insurance premium. Register that course for a nice 10m$ hole-in-one insurance. Profit!

SamReidHughes 4y ago
That is of course what the 16th hole at Augusta National is (on Sunday). That pin placement has to have netted them at least $3M in ad revenue.

jiscariot 4y ago

I was responsible for cutting cups the morning on one of these tournaments (long, long ago). On the par three in question, it was due to be a middle front (red) pin (we rotated a 3x3 grid). I gave it a little over a pin length off the fringe, not being generous at all, because there was a water hazard about 2 feet off the front fringe. They didn't like how hard it was so someone had to fix my work. The only thing else I remember was the hole in one was for nice car and they had a witness that sat their all day, who could attest/validate if one occurred.