Money l Success

The Unknown Gambler That Made $1 Billion

Crack the system

With sports betting, the odds are stacked against you. Bill Benter managed to beat that system.

This is the fascinating story of how Bill Benter cracked horse racing.

Roots

Bill Benter grew up in Pittsburgh, Pennsylvania. He had a talent for mathematics and was persuaded to use it to make money. After getting a degree in physics, he immediately went to Las Vegas.

The book Beat The Dealer helped him develop his card counting skills. This strategy involves counting the number of high and low cards in order to see if there are any high cards left in the pack. The more high cards there are, the more you bet.

He teamed up with Alan Woods, who is a professional gambler, to make a career out of it.

The problem with card counters is that casinos notice them and they are kicked out because they make too much money. After a couple of years of consistently making money, they were banned from all the casinos in Las Vegas.

Changing career

Alan Woods was very interested in horse racing. In Asia, particularly in Hong Kong, there is a huge amount of horse race betting. The Hong Kong Jockey Club is the most famous one. They knew they wouldn’t stand a chance if they were randomly gambling, so they tried using mathematical models.

So they flew to Hong Kong to gather horse racing data from the Hong Kong Jockey Club that dated 5 to 10 years back. The Hong Kong Jockey Club is almost a laboratory for studying horse racing. There are around 100 000 races each year. So if they wanted a lot of data to create a system that could predict future results, Hong Kong was the place to go.

It took them 9 months to manually insert all the data into a computer.

The system

The system would measure the quality of a horse and past results in order to come up with the chance the horse could win the race. They would compare the odds of their system to the odds the public was estimating. The way to make the most money is if the public estimates a horse has a very low chance of winning but your system says it has a decent or higher chance.

In their first year of operation, they lost $150 000. The system had all sorts of glitches and bugs. Because the Jockey Club takes a 15% cut on every bet, it’s even harder to make a profit.

The public odds are determined by the number of people betting on a horse and the sums they bet, determine the odds.

Apart from developing a system that could predict future results, they also designed a system that could carefully trickle money into the market. If all of a sudden you would bet thousands of dollars on one horse, it would increase the public odds, therefore lowering your profit.

Eventually, they incorporated the public odds into his system. This finally made their system profitable.

After a few years of horse betting, Bill Benter had made enough money that he could hire employees to place bets for him.

One day he gets a phone from the Jockey Club. Because he was a card counter in Las Vegas, he assumed that they were going to ban him. But instead, they said he was one of their best customers and asked what they could do to make his life easier. Because the Jockey Club makes a percentage on the amount that is being bet, the more Bill Benter bets, the more profit they make.

Bill wanted a better computer. So the club gave him a Customer Input Terminal that could execute hundreds of bets in fractions of seconds. This was a true game-changer for him.

Because Bill made so much money, the Jockey Club knew that if the word got out that a foreign-owned specialist computer team was gaining all the money from the betting pool to the detriment of the average bettor, it might discourage individuals to go horse betting. This is why they banned Bill Benter from the Jockey Club.

He didn’t even pick up the prize

Just after he had been banned, they placed their last bets on a record jackpot. They spent over $100 thousand to place 50 000 different bets. The odds of the jackpot were 10 million to 1.

They had 30 different winning bets including 1 which won the entire jackpot. They didn’t even pick up the $20 million prize, they did it to test how good their model was.

Final thoughts

Bill Benter truly changed the gambling industry. At the time, people were gambling randomly. But today there are computer teams all over the world trying to predict the future outcomes of games.

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