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The biggest upset in sports history is costing bookmakers millions of dollars

Stacks of hundred dollar bills
Chung Sung-Jun | Getty Images

On Sunday, Leicester City will face Manchester United in an English Premier League matchup that is attracting more attention than usual.

If Leicester wins, it would clinch the league title, even with two weeks left to go. This is a team that was so bad last year it was barely lucky enough to continue to play in the Premier League. It started the season with 5,000-1 odds in the U.K. to win the title, and now some gambling houses could be about to lose big time.

"By far this is the biggest future payout I've ever seen," said Nick Bogdanovich, director of trading for William Hill's U.S. sports betting operations in Las Vegas. "The biggest I'd seen before this was maybe 300-to-1, and I've been working since 1989."

"In the U.K., they are estimating $20 million worth of losses," Bogdanovich added. "That's probably realistic because soccer is like their NFL, so everybody is betting on it." He made the point that in the U.S., every year people bet on football long shots like Tampa Bay, Oakland and Jacksonville. These die-hard fans just want to support their teams, even for a few bucks.

Last year, Leicester spent the majority of the season in last place out of 20 teams. Only a late-season rally kept them from finishing in the bottom three. Those three teams get relegated to a lower level — kicked out of the Premier League altogether.

In the offseason, its manager was fired, and the new one simply hoped the team could stay outside the bottom three again. Finishing 17th or better was the goal — certainly not winning it all.

The Foxes have never been a threat for the top of the league standings. They finished eighth in 2000 and then never again in the top 10. In fact, for a majority of the 21st century, they haven't even been good enough to be in the Premier League.

That's why Leicester started the year with 5,000-1 odds of winning it all.

Somehow, someway, the Foxes kept winning. And here we are, with them almost but not quite guaranteed to win everything. A $20 bet placed with odds of 5,000-1 would mean a payout of $100,000 today.

Bogdanovich points out that winning the EPL title is so much more difficult, because there is no playoff. A team needs to be good the entire season to win. In a playoff, a team can get hot and win a few games and be the champion. That's not the case in English soccer.

Even as Leicester was winning, the odds only dropped to 20 to 1. Only once the calendar year changed and its nearest competitors faltered did the odds rapidly move in its favor.

In the U.S., "we only had three different tickets at 2,500-to-1," Bogdanovich said. "Thank goodness they were all really small."

"Every year we have massive risk on the NFL's biggest long shots," he added.

Bogdanovich said it's just one of those freak events, but there isn't much to be learned. He pointed to the example of the 1991 World Series, when the Atlanta Braves played against the Minnesota Twins. Each team had been its league's biggest long shot. Bookmakers for a while after wouldn't offer anything bigger than 100-to-1 odds.

But over time, they were making money again and started to open up the odds again, to 200 and 500 and so on. "Over time, people forgot about it."

Generally though he did say that a team with 5,000-to-1 odds might as well be 50,000 or 50 million. Nobody thinks they are going to win, but the houses have to be careful not to let somebody bet $10 on a $50 million payoff. That would cost them too much risk. But they still want to keep the odds reasonable enough so that fans can feel like they are getting some value, making it fun enough to bet some small tickets.

"Vegas books have been hurt by long shots. That's why you rarely see teams listed above 300- or 500- or 1,000-to-1 odds." Bogdanovich did say that in the long term, the bookmakers still make a lot of money on all these long-shot bets. Enough people buy small-sized tickets, with very few instances of any payoff.

Leicester City v. Manchester United airs Sunday at 9am/ET on NBCSN.