I worked in reinsurance, and there was the (apocryphal) story one year of how the government of South Africa had promised a million dollars to every player if their team won the world cup. On the flip side, the government looked for a reinsurer to insure them for that risk. My company said no because so basically it distilled down to sports betting and we did not have any experience in that market.
Say that the difference between winning and losing a final is £50k, and the bookmakers pay out even on a bet that you lose. If you bet £20k on you losing, you change a "nothing if I lose, £50k if I win" game into a "£20k if I lose, £30k if I win" game.
Some players prefer such a game. Placing that bet might even increase their chance of winning, as part of the stress gets removed from the game (you're playing for £10k, not for £50k)
You're usually not allowed to bat on yourself for fairly obvious reasons.
On a related note, a friend who's a sports better always placed the biggest bets against his own teams. Partly because he trusts his judgement better when not clouded by the hope that his team will win, partly because if he looses the bet, hey, his favorite team just won the game against the odds!
