|Tuesday 19th June 2018|
From Blackjack gambling to betting on horses: How one man managed to beat all odds
A story of a man whose journey to creating a powerful algorithm that could beat the odds of horse racing - a near impossible task to do - started from him cracking the code for blackjack.
Born and raised in Pittsburgh, Pennsylvania, Bill Benter would grow up to be a professional gambler and philanthropist. Growing up, he proved to be very skilled in mathematics, and after reading for a degree in physics at the University of Pittsburgh in 1977, Benter sought a way to use his skills to earn him big money. Having been inspired by a book he had read entitled Beat the Dealer, by math Professor Edward Thorp - the same man who invented the system known as card counting - Benter decided to head over to Las Vegas and hit the blackjack tables.
His successful journey in Blackjack lasted around seven years, until Benter got blacklisted together with some of his partners, and were banned from most casinos as a consequence. But this didn’t dampen Benter’s spirits. One of his partners, Alan Woods, knew there were giant horse-betting pools to tap in Asia, the biggest one run by the Hong Kong Jockey Club, and so they soon found themselves at the racetrack in Hong Kong.
Making a profit at the racetrack is no easy feat, in fact, for many, it is a near-impossible task. Mostly because racing is highly unpredictable. There are way too many variables and too many possible outcomes. Furthermore, because the winners had to split the pool and the house skimmed a commission of about 17 percent, Benter not only had to pick the winners, but he also had to make bets with a profit margin that was greater than the percentage cut. And so, he got busy and started doing some research that would ultimately lead him to create and perfect his successful algorithm:
“Early on in the game, Benter realized that he would have to make bets with a profit margin that would be greater than the clubs percent cut. He started absorbing all information on horse racing including possible systems to use. Unfortunately, not many of the sources contained math that proves results.
In his search for viable information, he came across an academic paper titled ‘Searching for Positive Returns at the Track: A Multinomial Logit Model for Handicapping Horse Races’. The paper discussed all the variables that needed to be factored in to successfully predict the outcome of horse races. It has to be said that the authors weren’t sure if money could be made from the theory and didn’t do a lot to find out either.
Benter, on the other hand, was a man on a mission, he taught himself advanced statistic and learned to write software. Woods did his part by flying to Hong Kong and sending back stacks of yearbooks containing all the racing information for thousands of races. It took nine months to develop the code and complete his study on regressions. It was only in September 1985 that he flew to Hong Kong with his three bulky IBM computers to test his theory and meet his partner.
Things weren’t successful from the start and through years spent betting on the horse races in Hong Kong, Benter continued to perfect his system and his algorithm.”
- CasinoTopsOnline, Bill Banter - The man who cracked the horse racing code
Over the span of 30 years, Benter had made nearly a billion dollars. Yet, unlike what any person might think, his ambitions were not entirely driven with a hunger for money, but rather, the satisfaction of achieving what was deemed to be impossible in the world of gambling. For sure this sounds ideal but completely unrealistic, however, it is nothing short of the truth.
In a news article by Bloomberg, reporter Kit Chellel described the events that ensued on November 6th 2001 when Bill Benter placed more than 51,000 bets with an associate named Paul Coladonato and won the Triple Trio by predicting the top three horses in three different heats.
The prize was a whopping sum of HK$100 million (around $16 million), a sum anyone would die to collect, yet both winners in this story decided not to claim the money. According to the Chellel, the two agreed “it would be unsupporting”;
‘“We can’t collect this—can we?” he asked. “It would be unsporting. We’d feel bad about ourselves.” Coladonato agreed they couldn’t. On a nearby table, pink betting slips were arranged in a tidy pile. The two men picked through them, isolating three slips that contained all 36 winning lines. They stared at the pieces of paper for a long time.
Then they posed, laughing, for a photo—two professional gamblers with the biggest prize of their careers, one they would never claim—and locked the tickets in a safe. No big deal, Benter figured. They could make it back, and more, over the rest of the racing season.’
And so they did. We will never know how exactly this great mind came to develop such a powerful and successful algorithm, but what we do know is that he is definitely an inspiration.
Today, at 61 years of age, Bill Benter is considered to be one of the most successful people on the planet. He has served as president of Hong Kong Rotary Club and is currently the Chairman and International CEO of Acusis LLC, Pittsburgh, Pennsylvania. He has also founded the Benter Foundation, and occasionally also lectures university students on subjects like statistics and mathematical probability.