[HN Gopher] The Gambler Who Cracked the Horse-Racing Code (2018)
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The Gambler Who Cracked the Horse-Racing Code (2018)
Author : sebg
Score : 161 points
Date : 2024-12-26 19:39 UTC (3 days ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| brudgers wrote:
| Could survivor bias be a more likely explanation than a good
| system? I mean among a large pool of people systematically
| betting on horse racing, a few are likely to have winning
| outcomes.
| pakitan wrote:
| You can't become a billionaire by betting on hundreds of
| thousands of events via "survivorship bias". It's about as
| likely as getting 1000 monkeys typing on typewriters and
| producing Shakespeare's works in 10 years.
| brudgers wrote:
| You might win a billion USD in a single lottery draw.
|
| https://www.nytimes.com/article/lottery-jackpot-record-
| power...
| pakitan wrote:
| Yes, you can. Not sure how that's relevant to the
| discussion though.
| bryanrasmussen wrote:
| it's a typical HN Gotcha of which I myself am often
| guilty, given hundreds of different chances, and one of
| those chances can make you a billionaire, then you can
| become a billionaire by betting on hundreds of different
| chances - but of course horse race gambling doesn't give
| you that billion in one shot chance.
|
| on edit - well I guess it technically does it give it,
| but at such a high rate of investment it isn't really
| that worthwhile either. The point about the lottery is
| that a single ticket which costs little can return a
| billion. A horse race that returned a billion probably
| needs at least a 100 million to be bet, which is probably
| not even possible.
| brudgers wrote:
| Do you think the probability of a working system are
| lower than the probability of laundering money at the
| racetrack?
|
| If you start with two billion, it's relatively easy to
| walk away from the track with one.
| bryanrasmussen wrote:
| it sounds to me like you think I've said something about
| the likelihood of a working system, and also that you
| think I am somehow in opposition to your second sentence,
| and require setting straight on the matter?
|
| I admit I am at a loss how either of these suppositions
| could actually come to be, based on what I wrote, so I
| suppose I am mistaken.
| brudgers wrote:
| You mentioned getting real money to make a system work.
|
| I pointed out an ordinary mechanism by which a person
| could find capital.
|
| A winning system could offer better rates to customers of
| a money laundering service.
| toast0 wrote:
| I think only the top one of those was actually a billion.
| Sum of payments is poor financial math, and I really wish
| news agencies would grow some standards and not use them in
| the headlines.
| Mountain_Skies wrote:
| The lottery commissions are major purchasers of
| advertising so don't expect the media companies to bite
| that hand any time soon.
| nycdatasci wrote:
| Definitely not luck. Bill runs with the same crowd that wrote
| the bible on advantage play (James Grosjean, etc). They are
| exceptionally talented.
| skippyboxedhero wrote:
| Bill originally worked with a team of people doing this in HK
| (that later broke up, some of the people involved
| were...characters). There was a whole group of people doing
| this in the 90s (some of these teams also did Japan). I
| believe he did stuff in casinos but parimutal obviously had a
| lot more scale.
| nycdatasci wrote:
| Exactly right. Impossible for individuals to operate at
| this scale. Bill led a large operation. Similarly,
| advantage play frequently requires teams to execute as you
| are often hoping to land a specific seat with a specific
| dealer.
| caminante wrote:
| It's closer to a hedge fund finding asymmetries (e.g.,
| under/over valued odds by bookmakers, bulk buying strategies
| when phone buying is turned off, etc.) plus some structural
| benefits (e.g., HK was a gambler's dream. Winnings were exempt
| from taxation! And the "pit boss" for the horse-racing scene
| wasn't kicking them out.)
|
| These don't apply to all horse-racing scenes.
|
| These advantages emerge, but get competed away.
|
| Look at how the protagonists here were in black jack card
| counting teams. They do make money until they get blacklisted.
| brudgers wrote:
| If you have a large bankroll and a relationships with track
| staff etc, past posting would be an available system.
|
| Or to put it another way, social engineering is usually a
| more reliable hack than technical means. I mean his card
| counting at blackjack was a team sport.
|
| Hedge funds trade on inside information because making money
| is the goal. Not style points.
| sourcepluck wrote:
| I only learned yesterday after reading this article that,
| apparently, a good many countries have no taxes on gambling
| wins. The reasoning is - again, from my quick bit of reading,
| if someone in the know wants to correct me please do - that
| most people lose, and the government doesn't want to be
| liable to help all the people who lose heavily.
|
| Which is great for the pros, I suppose. Here's a list of
| countries, which you'd have to check individually, after I
| searched "gambling tax free countries":
| Austria Australia Belgium Bulgaria
| Canada Czech Republic Denmark Finland
| Germany Hungary Italy Luxembourg
| Malta Romania Sweden United Kingdom
| sourcepluck wrote:
| Hmm, reading a bit more on the same article, i.e., this one
| here:
|
| https://www.vegasmaster.com/gambling-tax-free-countries/
|
| I see these relevant lines: > The laws
| concerning gambling tax around the world aren't all black
| and white. In most cases, there is a sort of gray area
| which states that you will be taxed on winnings if gambling
| is your profession or your main source of income. However,
| if you gamble and win but you have a bigger source of
| income and don't rely on professional gambling to pay the
| bills, you won't be taxed. In other countries,
| like Kenya and Ireland, players aren't taxed on their
| winnings, but bookies must pay a certain percentage of
| taxes on the total bets or winnings they record. In Ireland
| bookies must pay 1% on all bets placed through them, while
| in Kenya bookies have to pay 7.5% tax on all winnings they
| record.
| xxs wrote:
| I am to provide some context, in many of those countries
| people do not normally fill in tax reports, themselves,
| either. Lots of those countries have rather sophisticated
| regulations when it comes to gambling.
|
| Take Italy which (along the UK) has one of the largest
| gambling market and the strictest regulations. Effectively
| every bet is sent to the regulator in near real time and
| some stuff like bringing money to the table (game) requires
| an explicit approval of the regular beforehand. To put it
| simply taxing the gambling firms, that already need a
| license, is much easier.
|
| There are monthly reports, regulator mandated vaults that
| have to reflect the state of each player, including all
| bets and wins done, player (and operator) set limits (e.g
| deposit limits)
|
| So overall not taxing the end user is a good choice, it
| just it's a lot more involved that just 'no taxation'
| whimsicalism wrote:
| yes survivorship bias almost certainly plays a little bit, but
| i also imagine that there is great arbitrage on int'l horse
| betting markets prior to like 2012
| ACow_Adonis wrote:
| I'm a very cynical man who has also had the honour of working
| for the national statistics organisation, so take what i say
| with a grain of salt.
|
| While there are lots of "real and theoretical gains" to be made
| in gambling, a far more cynical take is that the "advanced
| analytics" is the frontbusiness for the real money being made
| by criminal enterprises, insider-trading, front-running,
| special access advantages, arbitrage, regulatory and
| competetive inefficiencies and insider-jobs.
|
| "No no, we're all really smart see, look at this math that you
| don't understand, that's how we make millions while being
| bankrolled by mysterious money and business partners from
| vegas, who also by definition can't understand the math and
| hence can't validate what we're doing but who are totally
| willing to just front us a bankroll :)"
|
| Its possible that there are certain gains left on the table,
| especially in old and early markets, but be wary of anyone
| being bankrolled by external forces and earning
| millions/billions and needing to explain that wealth with
| "smarts".
|
| Often i wonder whether these articles that appear aren't a form
| of marketing or reputation laundering, but i have absolute no
| proof and i'm not particularly interested in looking into it
| much further. So you know, i'm probably way off :)
| caminante wrote:
| The article is messy in that sense, but you already knew that
| was the reality. It's smart people that found a system they
| could exploit.
|
| In poker, the top cash players win by choosing who's (i.e.,
| lesser players) in their games, not playing against other top
| players. People with math acumen are most likely to find some
| of these anomolies like the Stats PhD who kept winning
| scratch off lottos.[0]
|
| _> Its possible that there are certain gains left on the
| table, especially in old and early markets, but be wary of
| anyone being bankrolled by external forces and earning
| millions /billions and needing to explain that wealth with
| "smarts"._
|
| Do you have favorite examples in mind?
|
| [0] https://www.dailymail.co.uk/news/article-2023514/Joan-R-
| Gint...
| ACow_Adonis wrote:
| I don't have any immediately at hand, so whether you
| believe some random guy on the internet from here on out on
| is up to you.
|
| I actually did a little bit of private investigation myself
| into betting markets of a handful of sports a number of
| years ago out of both curiosity, and potentially profit.
| And I'm currently working on perceptions of skill and merit
| along various systems just for my own intellectual project.
|
| I find it interesting you've discovered the systematic bias
| strategy of choosing your opponents and events (these are
| done both consciously by players in various systems, but
| often formally and informally supported or enabled by
| various governing bodies and competitive structures).
|
| Aside from both the boredom (arbitraging and scraping stats
| can be meticulously dull especially in fields you have no
| interest in or if you lack a hustler or profit maximising
| mentality or significant bankroll), opportunity cost (how
| much you can earn in other markets with such skills given
| equal investment of time and safety), the moral question
| (you're taking money from other ignorant bettors and I
| personally consider a lot of gambling and exploitation of
| people's ignorance relatively immoral, the house/market
| maker in many contexts still profits just through sheer
| trading frequency or other profit making actions), these
| days you have many market makers targeting little sharps
| presumably because they want to keep their ignorant base
| happy and gambling and don't want the perception of playing
| agaist certain losses or against people capable of seeing
| through the systems to reveal internal operations.
|
| That's the only reason I can come up with for why they
| target and close accounts of profitable gamblers while
| they're still taking the house edge on every bet as profit.
|
| What I (of course) also informally discovered in some
| markets I looked into was evidence of various fixing
| activities and systemic biases.
|
| Now if you were going to do this for large scale profit,
| one of the things you are going to have to do is stop the
| illusion you're modelling skill and start modelling
| corruption.
|
| It's all well and good for these articles to come out and
| pretend skilled prediction will win you millions, but you
| can be the best statistician in the house and if you place
| bets in a game based on models of skill, but the game
| outcome is rigged, you can kiss goodbye to your bankroll.
|
| Criminals win because their outcomes aren't statistical or
| based on skill.
|
| And now you're suddenly in the business of modelling and
| fighting people who profit from rigging markets rather than
| morally neutral statistical models in games of skill.
|
| You can of course model such and go down that rabbit hole,
| but at some point you either buy into such a world and get
| involved (either by being hired by or interacting with
| criminal and questionable enterprise) or you are
| effectively trying to do statistical surveillance of
| criminal activities... Which will then show up in the
| statistical patterns of your own betting activities and
| potentially alert said enterprises to your existence.
|
| And that's about where I bowed out of my investigations and
| turned back to more theoretical work.
|
| That's not particularly a world I want to be involved in,
| but I am relatively confident popular sports and markets
| have illicit match fixing and other activities going on in
| them at significant levels, but I'm not interested in
| fighting with or building implicit knowledge bases of
| people who have million dollar anonymous backers from
| Vegas, billion dollar contracts, and whom die from
| accidental sleeping pill overdoses... If you know what I
| mean ...
| mkj wrote:
| Quite possible. David Walsh (of Tasmania's MoMA) had a similar
| betting system to make his fortune. A story/warning he told to
| a hedge fund conference was that he _did_ think his system was
| infallible/bound to win, but revisiting the calculations later
| it turned out the expected value would be failure - he just
| happened to win at the right moments, initially. (Australian
| Financial Review article from a couple of years ago)
| RossBencina wrote:
| *MoNA, Museum of Old and New Art
| Allybag wrote:
| I am a professional automated sports gambler, and I win
| basically every day, and the handful of losing days I have per
| quarter are significantly smaller than the average daily win.
|
| If you place enough bets (I make about 15k bets each day that
| are matched) that have a positive expected value your chances
| of a losing day become pretty low.
|
| For example, I had a losing day on Christmas Day, but was only
| able to place about 500 bets as it was such a big holiday that
| there were almost no events.
| anoncow wrote:
| Teach me your ways.
| MaxikCZ wrote:
| And me please, ill give you some portion of my profits :P
| Someone wrote:
| I don't know their ways, but I expect there's a lot of
| emotion in sports betting that can be exploited (bookmakers
| will not purely optimize for expected profit, but also want
| lower variance in their profits). If so, betting against
| clubs in rich countries where betting is popular is the
| better option.
|
| Whether it beats the bookmaker's margin I wouldn't know.
| le-mark wrote:
| These guys never talk about the details. Either they're
| LARPing or there's something to it. "Betting exchange" is
| your clue. I've followed this thread before. Apparently the
| exchanges are mostly in Asia and allow people to buy and
| sell bets. So presumably this person is placing bets well
| before the date the event occurs and using them to
| arbitrage the result as the event nears. This is due to
| line movement up to the event. To participate in this you
| have to use btc/crypto and risk being ripped off with no
| legal recourse. Also presumably there's a system around
| what bet to place when. They never talk about that.
| refulgentis wrote:
| Not even wrong, in the Pauli sense.
|
| > allow people to buy and sell bets.
|
| Can't sell - you can buy, or find a counterparty. The
| exchange part is finding a counterparty.
|
| > placing bets well before the date the event occurs and
| using them to arbitrage the result as the event nears.
|
| Narrowly correct -- we could, of course, offset our X
| wins bet at $100 with a Y wins bet for $20. The
| implication is this is done by selling bets, which as
| mentioned above, isn't a thing in this world.
|
| Are there _some_ websites where this can be done? yes.
|
| Is it widespread? No.
|
| Is it implied by the phrase betting exchange? No.
|
| The implication with betting exchange is "you're not
| betting against us, we're not making lines, we're just
| matching you up with a counterparty, so our incentive
| structure is aligned with you, we'll build an API even.
| also fees are much lower, its a pure rake"
|
| > you have to use btc/crypto and risk being ripped off
| with no legal recourse
|
| Sites that only take crypto _do_ exist, but its certainly
| not a given or predominant.
|
| > Also presumably there's a system around what bet to
| place when. They never talk about that.
|
| This is confusing because:
|
| - you spelled out a system, intuitively, that most people
| would grok instantly (arbitrage on the line)
|
| - "presumably" is doing 0 work, besides implying there's
| some hidden secret: _any_ system involved in placing bets
| would have to provide information on what bet to place.
| :)
|
| Generally, I don't think it's _anyones_ job to spell out
| how to pull off consistent net-positive money machine,
| and it 's quite odd to not only want it, but _expect_ it.
| le-mark wrote:
| Thanks for the corrections; more info to refine my
| understanding. In a way it seems you are the book maker
| and the "exchange" is the platform that lets you do it
| (matches bettors).
| FergusArgyll wrote:
| Always bet against the Jets
|
| You're welcome
| wodenokoto wrote:
| How do you place so many? When you read about small fish
| manually betting on sports sites they get kicked off when
| winning too much.
| Allybag wrote:
| It's automated, I bet on a betting exchange which has an
| API, so the bets get placed without any input from me.
|
| As it's a betting exchange they don't care if you win or
| lose as you aren't winning money from them, but they start
| to take steeper cuts of your profits if you're a regular
| winner above some threshold that a random punter is very
| unlikely to hit.
| sourcepluck wrote:
| Betfair, or somewhere else, if I may ask?
| patrickhogan1 wrote:
| The title for Bloomberg says
|
| "Bill Benter did the impossible: He wrote an algorithm that
| couldn't lose at the track."
|
| The article is more nuanced. He created an EV+ system. It
| included tickets bought that did lose as part of the system he
| used. In fact buying tickets that would lose was part of his
| system. Along with other tickets that would win.
| caminante wrote:
| Clickbait tagline indeed.
|
| Buying 50k individual tickets to win 13 million is great ROI,
| but didn't see guaranteed ROI.
|
| Also, the cover
|
| _> How to make $1 billion betting on horses_
|
| is called into question as it's alleged that at best, the firm
| may have made $1 billion, but not individuals. I guess a few
| allegedly came close? Hard to verify.
| Suppafly wrote:
| like that movie about the couple that bought tons of lotto
| tickets
| le-mark wrote:
| That happened, the story appears here from time to time.
| patrickhogan1 wrote:
| I noticed my previous comment was downvoted, and I'd like to
| better understand why. The point I raised was intended to
| clarify the discussion and was based on factual information.
|
| If there's something incorrect or unclear in what I said, I'd
| appreciate it if you could point it out or share your
| perspective. It would be helpful to know if I misunderstood
| something or if my tone came across in a way I didn't intend.
| Constructive feedback is always welcome!
| yawnxyz wrote:
| Great article, very well-written narrative, but seems to leave
| some things out.
|
| From 2018 (please add tag)
| vajrabum wrote:
| Here are two papers referenced in the article. This one inspired
| Bill Benter
|
| https://gwern.net/doc/statistics/decision/1986-bolton.pdf
|
| And Bill Benter wrote this one in 1995 describing his system
|
| https://gwern.net/doc/statistics/decision/1994-benter.pdf
| larrydag wrote:
| This is really interesting. It's not unlike building a credit
| bureau model like a FICO score. Just trying to find a
| probability of likelihood outcome.
| dtkirby wrote:
| https://archive.is/g32Da
| mrandish wrote:
| British magician Darren Brown aired a TV special called "The
| System" revealing a foolproof method which allowed him to provide
| the name of the winning horse to a lucky person who randomly
| responded to his newspaper advertisement in time for that person
| to bet on the race and win. He continued doing this with that
| person for six more races over six consecutive weeks - with that
| person betting their own money and winning each time, beating
| astronomical odds and winning quite a large sum. The bets were
| real, legally placed in advance on televised races at regulated
| betting parlors and the person really randomly responded to the
| ad without knowing Brown beforehand. For the last race Brown and
| the person met at the race track but for all the prior races
| Brown didn't even know when or where the person would place their
| bet. He really had no involvement or even contact, other than
| sending the name of the horse to bet on via email once a week.
|
| Of course, it's (sort of) a very clever trick. All is revealed in
| the show (now on Brown's YouTube channel at
| https://www.youtube.com/watch?v=jR970Y10WNw). I showed it to my
| kid who had recently asked me about a state lottery billboard
| claiming "Someone has to win!" and it proved to be an
| entertainingly effective answer as well as providing some good
| ways to think critically about gambling propositions.
| segfaultbuserr wrote:
| Is a binary search involved in this "gambling system"?
| gmiller123456 wrote:
| You get so many respondents, you can give them all different
| combinations. Each race you disregard the losers, and when
| the population gets low enough you might miss a race, you
| just say "hey, I predicted x races, call Bob to confirm".
| mrandish wrote:
| Yes, that's basically how it worked. To be clear, Brown was
| careful to promote and run it for entertainment and not a
| scam. He made very clear up front that those choosing to
| participate were very likely to lose their money and
| insisted that the early bet amounts were minimal "fun
| money". The ever-shrinking number of those continuing to
| later rounds had made enough from earlier wins to offset
| the later eventual loss.
| a12k wrote:
| I heard about a similar trick once in the framework of a scam,
| which may be the same (I'm not willing to watch this much
| youtube for the payoff), where out of the 1,000 people that
| reached out for answers to a 50/50 bet of some sort, they
| provided 50% of them one answer, and 50% the other. Out of the
| 50% that won, they provided 50% one answer and 50% another.
| Leading to a situation where eventually you had a small group
| of people who had received correct "lottery" or whatever
| answers five or six times in a row, priming them to believe the
| scammer had some major advantage. Then the scammer charged that
| last group of 15 or 30 some large amount of money to receive
| the last answer, and so on with the winners of that bet.
| vunderba wrote:
| yeah - this one was very popular in seasonal sports like
| football.
| slyall wrote:
| A version of it was on the UK series "Minder". Broadcast 40
| years ago
|
| https://www.minder.org/episodeguide/S04E04_SorryPalWrongNumb.
| ..
| SapporoChris wrote:
| I am confident some of the stock advisor websites are doing
| the same thing. Just sending out random advice and collecting
| subscriptions from the winners.
| from-nibly wrote:
| If stock advisors had secret knowledge that helped them
| make money on the stock market they would use it to make
| money on the stock market not tell people about it.
| dleink wrote:
| In both finance and sportsbetting I assume anyone giving
| out information is part of a long con.
| JKCalhoun wrote:
| "Alfred Hitchcock Presents" had an episode, "Mail Order
| Prophet", that was this (66 years ago).
| vlovich123 wrote:
| That's basically the scam. At the end he has her bet one
| extra time and she loses. Except it's revealed that Darren
| Brown had swapped out her ticket for the winning ticket
| _somehow_. Very likely he just placed bets on all horses and
| then did a sleight of hand to give her the winning ticket
| before she opened it. In other words he spent $20k of the
| show's budget placing bets on all 5 horses and gave her the
| $13k of the winnings that were reclaimed from having bought a
| winning ticket.
| mrandish wrote:
| That's not what happened nor is it how he accomplished the
| "trick". There's no slight of hand or trickery. Everything
| is fully revealed near the end of the special on YouTube
| (which I linked). She won every bet, including the last. He
| never had any of her tickets nor did he even see her place
| her bets.
|
| It's much simpler than that. Although the show appears in
| the beginning like it's a "magic trick" (though that is
| never actually claimed), in the end the audience is clearly
| shown how there's no trick at all. It's all simple
| probability and there really is no way to "beat the odds".
| Which IMHO is ultimately more entertaining and valuable
| than just some slight of hand or magic trickery.
| ErrantX wrote:
| You might be misremembering (it's my fav DB show btw...)
|
| It's not really revealed how he does the last trick. In
| the last bet she believes she loses because the horse he
| tips doesn't win - and during the race he reveals there
| is no system.
|
| However, he places the final bet - not her - and after
| the race ends she opens the ticket to find it's placed on
| the winner, not the tipped horse.
|
| Almost certainly it's slight of hand (which he is
| excellent at) but that is never revealed.
| mrandish wrote:
| Yes, it's been several years since I watched it, so I
| guess I'm not remembering it clearly. I remember a race
| where there were multiple volunteer bettors at the track
| who were unaware of each other and only one of them won.
| Maybe that was the second to last race.
|
| Anyway, I apologize for my error in recollection. I
| sincerely remember the gist of the show being as I
| described. Another reminder that memory can sometimes be
| weirdly porous yet not be correctly 'flagged' with an
| appropriate sense of uncertainty.
| wfleming wrote:
| Vlovich is describing the very last race only, where he
| did place the final bet. He takes her 4k and tells her
| he's going to place the bet for her so how much she'll
| win is a surprise. The horse he _said_ he would bet on
| loses the race and then he reveals he _actually_ bet on
| the winner. So for that race and that race only I do
| think he just bet on every horse and sleight-of-handed
| the right ticket to her. Timestamp 35:20 in the video you
| linked earlier. Right after that he explains how the
| "trick" worked for all the earlier races, which is what
| you're referring to.
| mrandish wrote:
| It's been several years since I watched it, so it appears
| I'm not remembering the circumstances of the last race
| clearly. I remember a race where there were multiple
| volunteer bettors at the track who were unaware of each
| other and only one of them won. Maybe that was the second
| to last race.
|
| Anyway, I apologize for my error in recollection. I
| sincerely remember the gist of the show being as I
| described. Another reminder that memory can sometimes be
| weirdly porous yet not be correctly 'flagged' with an
| appropriate sense of uncertainty.
| madeofpalk wrote:
| This is the plot of some daytime court drama tv/movie I half-
| saw ages ago when I was a kid like 15-20 years ago.
|
| It really stuck in my head for some reason, but never been
| able to figure out what show/movie it was.
| wnevets wrote:
| the social media version is to post all of the possible
| outcomes to a sporting event like the super bowl a year in
| advance, deletes the ones that missed then claim your a sport
| genius using the "correct" prediction made a year ago as proof.
| IshKebab wrote:
| > All is revealed in the show
|
| He may have done it like this for real (I haven't seen the
| show), but just be aware that part of Derren Brown's magic is
| that the "reveal" is still part of the act. Often he claims to
| have done things using psychological effects but actually it's
| just traditional magic.
|
| Clever really because nobody believes magic really exists
| today, but plenty of people believe in stuff like hypnosis and
| NLP.
|
| It went kind of hilariously wrong for his "wisdom of the
| crowds" explanation for predicting the lottery - that one was
| too blatantly bullshit for most people and they screwed up the
| CGI fakery.
|
| This is another one that always stuck in my mind:
|
| https://youtu.be/sEmCQzueyEQ
|
| (I watched it years ago and haven't rewatched it but IIRC he
| has a whole NLP explanation for what was clearly sleight of
| hand performed days ago off camera.)
| GrantMoyer wrote:
| Plenty of people believe in NLP (Natural Language
| Processing), indeed.
| thaumasiotes wrote:
| In this context, "neurolinguistic programming".
| refulgentis wrote:
| > Often he claims to have done things using psychological
| effects but actually it's just traditional magic.
|
| Lots to unpack here. :)
| PaulHoule wrote:
| There is this classic
|
| https://www.amazon.com/Dr-Beat-Racetrack-William-Ziemba/dp/0...
|
| His idea is that the odds (on the tote board) to win can be used
| to make a more accurate predictor for winning place and show than
| the place and show odds on the board. What you notice is that
| maybe two times a day at the track you find a horse which is
| favored to win and the show bet pays almost as much as the win
| bet and you place a Kelly-sized bet on that one.
|
| I've found a few opportunities of that sort at the local harness
| racing track.
| petesergeant wrote:
| I think you have no idea how confusing this comment is, given
| the overloading of "place" and "show". For anyone else
| confused, "win" means come first, "place" means come first or
| second, and "show" means come in the top three. The technique
| being described here is using the fact that "win" odds are
| usually very accurate about the underlying probabilities, but
| for some reason "place" and "show" aren't, so you can take
| advantage of the accuracy of "win" to find better-than-normal
| bets.
| PaulHoule wrote:
| Thanks for adding that clarification.
| ChrisArchitect wrote:
| (2018)
|
| Some discussion then:
|
| https://news.ycombinator.com/item?id=16985413
|
| And in 2019:
|
| https://news.ycombinator.com/item?id=20865312
|
| 2021:
|
| https://news.ycombinator.com/item?id=26992070
| 3abiton wrote:
| It's always fun to dog into hn lore!
| asdasdsddd wrote:
| Everytime I read these articles, it's just, train a ML model and
| beat the bookie. So simple in hindsight.
| kristjansson wrote:
| Train an ML model in the early PC era from horse race data
| stored on paper, train a CV model in the early GPU era on
| parking lot data from satellites, figure out MC options pricing
| in the early minicomputer era (before BS) ...
|
| Being first looks simple in hindsight
| sema4hacker wrote:
| My recollection is that a variation of this scheme was the basis
| for a Twilight Zone episode back in the 60's.
| tamaharbor wrote:
| Alfred Hitchcock?
| sema4hacker wrote:
| You're right! S3E2 "Mail Order Prophet", originally aired
| 10/13/57, but I didn't see it until it re-ran in the 60's.
| notforviewingit wrote:
| People are mythologising making money by gambling. In terms of
| tech the industry is like 20 years behind the financial markets.
|
| Source, I worked at company that did arbitrage in online sports
| betting in 2010s that employed around 30 or so people and did
| hundreds of millions in profit.
| shkkmo wrote:
| This story predates that period by well over a decade. Even if
| the company you worked for isn't one of the ones named towards
| the end of the article, it is very likely that the company you
| worked for was in some way connected with people from either or
| both of Benter's or Woods' operations.
| notforviewingit wrote:
| I doubt there is a strong link between the founders of my old
| employer and Benter or Woods. My old employer did totally
| different kind of betting. No blackjack or horses.
|
| In general people overestimate how hard it is to make money
| in gambling. You don't need to be some kind of savant to do
| it. The people in general are similar to what you would find
| in your average tech company. Sure there is a founder with a
| vision and some sort of an insight into making money, but
| every company has one.
| chillydawg wrote:
| Certainly helped to be early in that particular market. It
| certainly helped that Hammersmith lot.
| sourcepluck wrote:
| Could you share the name of your former employer, or if you
| can't, could you share the name of similar employers?
|
| I'm on a bit of a probability (gambling, sports betting,
| stats, etc) kick these days, and I'd be interested in
| reading more about people and companies doing this in
| practice. I'd been imagining there must be organised sports
| gamblers, but they don't seem to be overly searchable.
| LiamPa wrote:
| Search betcode, plenty of us on the slack.
|
| https://github.com/betcode-org
| notforviewingit wrote:
| I don't know exactly how these companies make their money
| and how successful they are, but I at least believe all
| of them are in the odds computation business. They might
| be supplying prices to bookmakers instead of betting
| themselves etc.
|
| Longshot Systems Football Radar Gambit Research
| SportsRadar Odds Reactor Star Lizard Smartodds Smarkets
|
| These companies are known more for their HFT trading in
| financial markets, but I believe they have also expanded
| into sports betting.
|
| jane street jump trading Susquehanna
|
| Also some of the bookmakers such as matchbook have
| started as betting group and then overtime turned into a
| bookmaker as that is where the real money is.
| josephg wrote:
| Yeah; I briefly did some consulting work at a sports
| betting company. They have a database of hundreds of people
| who are essentially banned because they're too good at
| picking winners, and the betting company loses money having
| them as clients.
|
| Internally they track how much each account wins & loses.
| If you win too much, the site gives you worse and worse
| odds until eventually you're banned entirely. The reverse
| is also true: if you're a terrible better, the site gives
| you better odds hoping to keep you coming back for more.
|
| They have a whole team whose job it is to instantly block
| smart betters from opening new accounts. Accounts opened in
| the name of their girlfriends is the classic thing they
| watch out for.
|
| Some of the smartest gamblers also get hired as quants, and
| help figure out what the odds should be on the site.
| notforviewingit wrote:
| In Europe bookies just get rid of good players, except
| for the exchanges and Pinnacle. No one serious will
| gamble with European bookmakers. Though maybe this has
| changed lately. I have not been following field recently.
|
| In Asia the bookies are a lot more tolerant, especially
| the larger ones. You really have to hit their pnl hard
| for you to get cut off.
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