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But if they knew it was going to be Sherwood (as implied by the OP) then surely it wouldn't matter what the maximum stake was as it would still mean paying out more money than they got in for that bet (unless they think they could get more in from losing bets placed after they became aware of...

Surely if they knew he was about to be announced as our next manager they would close the book or make the odds so short that no one would back it Why would they let people place winning bets on this and cost themselves money?