How To Brand A Billion: The Gambler Who Cracked The Horse-Racing Code

From Bloomberg, May 3:

Bill Benter did the impossible: He wrote an algorithm that couldn’t lose at the track. Close to a billion dollars later, he tells his story for the showtime time.

Horse racing is something similar a religious belief inward Hong Kong, whose citizens bet to a greater extent than than anyone else on Earth. Their cathedral is Happy Valley Racecourse, whose grassy oval runway together with floodlit stands are ringed at black past times i of the sport’s grandest views: neon skyscrapers together with bully stacks of high-rises, a constellation of illuminated windows, together with beyond them, lush hills silhouetted inward darkness.

On the even of Nov. 6, 2001, all of Hong Kong was talking nigh the biggest jackpot the metropolis had e'er seen: at to the lowest degree HK$100 i G 1000 (then nigh $13 million) for the winner of a unmarried bet called the Triple Trio. The wager is a fiddling similar a trifecta of trifectas; it requires players to predict the top 3 horses, inward whatsoever order, inward 3 unlike heats. More than 10 i G 1000 combinations are possible. When no i picks correctly, the prize coin rolls over to the side past times side laid of races. That balmy Nov night, the pot had gone unclaimed 6 times over. About a i G 1000 people placed a bet—equivalent to 1 inward vii metropolis residents.

At Happy Valley’s set down level, immature women inward beer tents passed foamy pitchers to laughing expats, spell the local Chinese, for whom gambling is a to a greater extent than serious affair, clutched racing newspapers together with leaned over the handrails. At the cleft of the starter’s pistol, the announcer’s vocalization rang out over loudspeakers: “Last leg of the Triple Trio,” he shouted inward Australian-accented English, “and away they go!”

As the pack thundered to a greater extent than or less the finally bend, ii horses muscled ahead. “It’s Mascot Treasure a length inward front, but Bobo Duck is gunning him down,” said the announcer, vocalization rising. “Bobo Duck inward front. Mascot fighting back!” The crowd roared every bit the riders raced across the complete line. Bobo Duck edged Mascot Treasure, together with Frat Rat came inward third.

Across the route from Happy Valley, 27 floors up, ii Americans sat inward a plush office, ignoring a alive feed of the activity that played mutely on a TV screen. The alone audio was the hum of a dozen computers. Bill Benter together with an associate named Paul Coladonato had their eyes fixed on a banking enterprise of 3 monitors, which displayed a matrix of bets their algorithm had made on the race—51,381 inward all.
Benter together with Coladonato watched every bit a software script filtered out the losing bets, i at a time, until at that topographic point were 36 lines left on the screens. Thirty-five of their bets had correctly called the finishers inward ii of the races, qualifying for a consolation prize. And i wager had correctly predicted all ix horses.

“F---,” Benter said. “We hitting it.”

It wasn’t instantly clear how much they’d made, thus the ii Americans attempted some back-of-the-envelope math until the official dividend flashed on TV 8 minutes later. Benter together with Coladonato had won a jackpot of $16 million. Benter counted the zeros to brand sure, together with thus turned to his colleague.

“We can’t collect this—can we?” he asked. “It would hold out unsporting. We’d experience bad nigh ourselves.” Coladonato agreed they couldn’t. On a nearby table, pinkish betting slips were arranged inward a tidy pile. The ii men picked through them, isolating 3 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 person gamblers alongside the biggest prize of their careers, i they would never claim—and locked the tickets inward a safe. No large deal, Benter figured. They could larn far back, together with more, over the balance of the racing season.

Veteran gamblers know you lot can’t vanquish the horses. There are likewise many variables together with likewise many possible outcomes. Front-runners intermission a leg. Jockeys fall. Champion thoroughbreds decide, for no apparent reason, that they’re only non inward the mood. The American sportswriter Roger Kahn i time called the sport “animated roulette.” Play for long enough, together with failure isn’t precisely probable but inevitable—so the wisdom goes. “If you lot bet on horses, you lot volition lose,” says Warwick Bartlett, who runs Global Betting & Gaming Consultants together with has spent years studying the industry.

What if that wasn’t true? What if at that topographic point was i somebody who masterminded a organization that guaranteed a profit? One somebody who’d made almost a billion dollars, together with who’d never told his story—until now?

In September, after a long motility to arrive at him through friends together with colleagues, I received an electronic mail from Benter. “I accept been avoiding you, every bit you lot mightiness accept surmised,” he wrote. “The argue is mainly that I am uncomfortable inward the spotlight past times nature.” He added, “None of us desire to encourage to a greater extent than people to larn into the game!” But inward Oct he agreed to a serial of interviews inward his component inward downtown Pittsburgh. The tasteful space—the top ii floors of a Carnegie Steel-era building—is furnished alongside 4-foot-tall Chinese vases together with a marble fireplace, alongside sweeping views of the Monongahela River together with freight trains rumbling past....MUCH MORE