How this man made a billion dollars from gambling

Humans evolved brains that are pattern- recognition machines, adept at detecting signals that enhance or threaten survival amid a very noisy world…. But there is only sure fire method of proper pattern recognition, and that is science.- Michael shermer.

There are patterns in the birth charts to predict future, patterns in fingerprints to identify people, patterns in stocks to pinpoint prices, patterns in lie detectors to detect lies. Then there are people who spend a lifetime studying these patterns, recognizing and deep analyzing them to predict the perfect outcome.

“though this be madness, yet there is a method in’t”

Here is one such person, who made a fortune for himself through his skills, in the worlds toughest game- Gambling.

The start

At elementary school, it was already obvious that Benter had outstanding skills in mathematics. While many talented mathematicians decide to choose a career of research or teaching, Benter chose to put his skills into a differnt direction – to make money.

He started his professional gambling career counting blackjack in Las Vegas. Soon he was known in many casinos and quickly banned from there.

However, Bill didn’t lose his appetite towards gambling. He had to find a place where he can stay far from cameras and bumpers. That’s how he found the field.

In the year of 1984, he joined forces with another physician named Alan Woods and they moved to Hong Kong where horse racing is a religion. Their first algorithm was handling 16 variables including the horse’s previous finishing in races, their preferred surface condition or even the weather.

Credit-
you tube channel- Economics Explained

First time’s a fail

Benter started to test this model and found out that it’s not working. He went bankrupt and had to move back to the US. After collecting some funds from blackjack winnings, he returned to Hong Kong, to the Mecca of horse racing. He said: “The general thrust of model development is to continually experiment with refinements of the various factors.” With a few hundred thousand dollars and was able to gain $600.000 in the first year.

Furthermore, Bill realized that his model is working with publicly available information. If you are betting on horse racing you must know that insider information is gold. If you have a Jockey friend who can tell you how was the horse in the last few days, that can be pure gold. Somehow he managed to add the factor of lacking insider information to his algorithm.

The 1997 ban –

In 1997, Hong Kong went under Chinese authority. The new regime banned gambling by phone which made everything more complicated. At this time, Benter grew into a big company working with many programmers, professional gamblers, analysts, and people who placed the bets. Since the prize money for winners was compiled by the loss of other gamblers so they were trying to keep the algorithm as a secret. As they had to be present personally this became more complicated.

The company was renting hotel rooms next to betting shops. A few minutes before the game started they printed a pile of betting tickets. Then they’d run to the betting shop with a bag of money and feed tickets to the terminal.

The end game-

The perfect method to win at horse racing was ready at this time. In 2001, there was a huge jackpot worth about $13 million on a single bet called Triple Trio. The point of Triple Trio is that you guess the three winners of three consecutive races. As there are more than 10 million possible combinations, winning this prize was the biggest success of the algorithm so far.

Benter agreed with his associate that they are not going to claim this ticket. If nobody claimed the jackpot, it was shared for charity purposes in Hong Kong.

William Benter is retired now, after all, his company and his horses are working for him. He’s running many charity programs and giving lectures about statistics all around the world at big Universities.

For more blogs visit- www.mind4scape.com

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.