Horse racing is a sport that’s often seen as some sort of rocket science. To place a bet, you’re faced with a myriad of possibilities, trying to predict the outcome for a couple of crazy horses. You’re considering variables including age, body weight, track condition, and past lap times. Sometimes, even the horse’s demeanor! The creators of this game definitely knew what they were doing.
Predicting the outcome of a horse race is no walk in the park. It’s a puzzle that has perplexed data scientists and statisticians.
However, there’s this guy, Bill Benter. He approached it from a different angle. This mad scientist of a physicist wrote an algorithm that allowed him to rake in millions from the game. He forever altered the way the professional gambling community viewed the game. The funny part? We only got wind of his story when he was nearing the billion-dollar mark. This man must be incredibly secretive, sly as a fox. Wicked.
Who exactly is this man? Let’s relive his life in this post.
This Benter fellow’s beginnings were akin to those of your classic mad scientist. Born in 1957 in Pittsburgh, Pennsylvania, U.S., he was christened William Benter. This is the place he called home during his formative years.
He had a knack for numbers, a budding maths prodigy if you will.
Benter was that kid next door, blessed with an abundance of freedom from his parents. Despite this, he was a hardworking student. Speaking of “freedom”, he would sometimes go on adventurous vacations, hitchhiking all the way from Europe to Africa (specifically Egypt), and even driving through the vast expanse of Russia.
There came a point when he gained a sense of direction in life. About 2 years into his study of Philosophy and Physics at Case Western University in the 1970s and some time at the University of Bristol, he realized he wanted to leverage his mathematical prowess to turn a profit.
Benter made the bold decision to leave school and hop on a bus to Las Vegas. His mother must have been gnashing her teeth when she discovered what Benter had done.
Upon his arrival in Las Vegas, Benter took up a job at a convenience store chain, 7-Eleven, earning a meager $3 per hour. Despite this, he gambled everything he had at budget-friendly casinos. He was a lover of science, and he relished seeing the theories he learned on paper come to life in the real world. Probability theory was his constant companion. Even though Benter didn’t win much initially, it didn’t bother him because he had found his calling.
Interestingly, the book “Beat the Dealer” by Edward O. Thorp, a pioneer in blackjack card counting, served as his inspiration. It was this book that intoxicated Benter. The book discusses how to beat the house using card counting in blackjack. Thorp is regarded as the father of this practice.
Card counting in blackjack is used to predict if the next hand could tip the scales in favor of the player or the dealer. The main idea is to watch how many high-value cards remain compared to the low-value ones in the deck. The more high cards (tens, jacks, queens, kings, aces) that are still in play, the better the odds for the player.
Conversely, when there are more low cards (2s through 6s) in circulation, it spells good news for the dealer.
Undoubtedly, it’s tough, but once you’ve got the hang of it, it’s a sweet victory. You will be able to tweak your bets and strategies to seize any favorable odds. It’s a practice that demands focus, swift calculations, and discretion to pull off.
In 1980, Benter found himself on the job hunt; perhaps the $3 an hour wasn’t cutting it anymore. Right around then, as he was shooting off job applications, his pals connected him with someone who’d end up altering the course of his life — Alan Woods. Woods was the head honcho of an Australian card-counting team that had just landed in Las Vegas.
Woods had a way with words, even boasting about how he’d managed to sneak past airport security in Manila with $10,000 tucked away in his underpants (maybe they were SpongeBob SquarePants themed, who knows?). Benter was seriously impressed and decided to join the team.
Before he knew it, he was so much of a winner, pulling in over $70k a year. Woods ran a tight ship, setting strict rules for the team. For instance, no alcohol on duty to avoid letting their guard down.
You know how it goes: step out of line and you’d be kicked out, roughed up, or even drugged. Benter wasn’t thrilled about these “consequences”. He believed he was just playing his cards right, not conning anyone.
One day, Benter came face to face with these “consequences.” It all started with a tap on the shoulder from a Russian-level tough guy before being hauled off to a backroom and plonked into a chair where he was pressured to hand over his ID. He held out at first but eventually caved.
After that ordeal, which took place around 1984, Benter, Woods, and the rest of the crew found their names in the black book, right next to thieves, swindlers and other criminals. They were lucky, really lucky, not to have met the same fate as Thorp, who almost got killed. The casinos were off-limits to them now. They had to think fast. The hunt for an alternative was on. After all, Vegas isn’t the only gambling hotspot in the world. Hong Kong was the next promising prospect on their radar.
Alan Woods and Bill Benter shared a passion for horse racing, which led them to explore the potential of applying mathematical principles to betting on races.
Benter found his eureka moment in the quiet corners of a library. He chanced upon an academic paper. The paper convincingly argued that horse race outcomes could be predicted more accurately by rigorously analyzing various factors, such as horse performance and track conditions. This was the breakthrough Benter had been searching for. Almost overnight, he immersed himself in learning coding (on those good old green-screen computers) and advanced statistics.
Woods was the first to make the move to Hong Kong and sent Benter a dataset of past horse racing results. Benter dedicated nine months of his life to studying them and developing code. Hong Kong, with its thriving horse racing market, large betting pools, and parimutuel betting system, provided the perfect playground for their algorithmic approach to betting. The absence of restrictions on their betting methods further intensified the “perfect” aroma.
In the third quarter of 1985, Benter boarded a flight to Hong Kong with three IBM computers in his possession.
Benter and Woods rented a tiny, quirky apartment in a skyscraper to set up an office. Benter’s initial algorithm churned out inaccurate predictions, albeit Woods, with his expertise and experience with the Hong Kong tracks, helped iron out these errors.
Benter would often be found glued to the computer. He tirelessly worked on refining his algorithm, tweaking stuff based on his observations and analysis of race outcomes.
The duo placed their bets using a telephone account at the Hong Kong Jockey Club and watched the races on TV. The Hong Kong Jockey Club was the largest horse betting pool in Asia at the time. In between races, Benter would grapple with statistical conundrums.
Before the windfall, you know, there are setbacks. Almost a year after Benter arrived in Hong Kong, he and Woods had lost $120,000 of their $150,000 bets, “guided” by the model. Benter returned to his old stomping grounds, Las Vegas, in a futile attempt to secure investment for their bankroll. When the duo reunited in Hong Kong in September, with their financial situation somewhat improved, Woods had a different proposition: he wanted 90% of whatever they made in their partnership. That didn’t fly.
The investors Benter approached in Las Vegas were willing to back him in blackjack but not horse racing. He and his new team of card counters turned their money into hundreds of thousands of dollars. He continued to work on the racing model in his leisure time.
Benter returned to Hong Kong in September 1988 to find Woods living large, hiring people to refine his code. It was working, as it was bringing in money for him. The beef between the duo remained; they did not speak to each other.
Benter was determined to make the model more mathematically accurate, so he decided to add more to the roughly 20 inputs it was already accepting. He added factors including temperature and the number of rest days since a horse’s last race. The temperature variable was a bust, but the number of rest days since a horse’s last race and others proved successful. That year, the model netted Benter $600k.
Over time, Benter realized that using the publicly available betting odds as a starting point and then distilling them with his private algorithm strikingly improved profitability. This strategy brought him about $3 million in the 1990 to 1991 season. Benter was raking in millions, with his annual returns reaching staggering heights.
The following year, the Hong Kong Jockey Club phoned Benter, surprisingly, to commend him (he still had PTSD from the tap on the shoulder by the Russian-level tough guy).
Woods made about $10 million from his own version of the model a couple of years later and splurged on a Rolls Royce. Benter, ever the savvy investor, purchased a portion of a French vineyard. However, they both couldn’t keep their riches under wraps. Sadly, the former business partners went a decade without speaking.
Benter’s success wasn’t just measured in dollars. It was also measured in the impact he had on the gambling community. His name became synonymous with innovation and profitability, solidifying his reputation as one of the most successful gamblers of all time. Even Woods admitted in an interview that his rival’s model was the best. But the two men couldn’t bury the hatchet. They kept making money. Benter’s operations generally generated about a billion dollars.
Through relentless dedication and a comprehensive knowledge of data, Benter remodeled professional gambling. His ability to consistently outwit the system and deliver remarkable returns set him apart, earning him a place among the elite few who have mastered the crazy game of betting.
On Jan. 26, 2008, Woods lost his battle with cancer at age 62.
Beyond the world of gambling, Benter is known for his philanthropic endeavors. He channels his wealth into various causes aimed at improving education, healthcare, and the arts. Benter’s philanthropic activities extend globally, with a focus on initiatives that have a meaningful and lasting impact on communities.
In 2007, Benter established the Benter Foundation, a charitable organization dedicated to addressing pressing social issues. The foundation’s focus areas include those mentioned before.
Benter found happiness in marriage to Vivian Fung in 2010, whom he met in Hong Kong. Together, in 2015, they had their first son, Henry. Currently, Benter resides in Pittsburgh, where he balances his professional pursuits with family life. Despite his immense success and wealth, Benter remains grounded, finding fulfilment in the love and companionship of his family aside his achievements.
You know, it’s a bit similar to when you’re trying to solve a complex equation. You’ve got all these variables, and you’re sure you’ve accounted for everything. You’re just about to solve it, and then you realise you’ve forgotten to carry the one! It’s a facepalm moment, nevertheless, it’s also a reminder that even in the world of numbers, things can get messy.
What I am unhappy about is that the two friends never managed to mend their fences. When you take a step back and look at the bigger picture, each party played their roles well in the development of the model. Yet, they never got to raise a toast together in celebration of their accomplishment.
Let’s not allow this melancholy to overshadow the fact that Benter, Woods, and everyone else involved truly shook the horse racing and gambling industry. The story serves as yet another testament that the system can indeed be challenged. Emphasis on “can,” as it might not always be feasible.
