7 ms·

A Gambler Who Cracked the Horse-Racing Code (2018)

187 points by mrbbk 5y ago

deleted 5y ago
[deleted]
magicroot75 5y ago
Is there a book on this guy? Fascinating stuff and I'd love to dig deeper.
- sanxiyn 5y ago
  Yes there is, from the man himself. Computer-Based Horse Race Handicapping and Wagering Systems (2020).
  - PaulRobinson 5y ago
    That's simply a reprint of his 1994 paper, which is available here: https://www.gwern.net/docs/statistics/decision/1994-benter.pdf https://www.gwern.net/docs/statistics/decision/1994-benter.p...
sneak 5y ago
> “F---,” Benter said. “We hit it.” Pretty sure he didn't say "F---". Why the fuck is bloomberg misquoting this guy? Why publish a quote you're just going to censor?
- reedf1 5y ago
  Someone may be offended seeing the letters u, c, and k.
  - eru 5y ago
    Which might even be the guy they quoted himself.
- PhantomGremlin 5y ago
  This censorship mentality is pervasive. I also hate it. For example, even in something as important as a recent US Supreme Court case, the Washington Post reported it this way: “F--- school, f--- softball, f--- cheer, f--- everything,” 14-year-old Brandi Levy typed into Snapchat one spring Saturday. https://www.washingtonpost.com/politics/courts_law/supreme-court-cheerleader-first-amendment/2021/04/25/9d2ac1e2-9eb7-11eb-b7a8-014b14aeb9e4_story.html https://www.washingtonpost.com/politics/courts_law/supreme-c... No, Brandi didn't actually type all those dashes. Fortunately, the court documents have the actual words in them.
fighterpilot 5y ago
If I remember properly: lots of proprietary data that was painstakingly assembled, and quite simple models on that data.
- nojito 5y ago
  Data science in a nutshell.
swader999 5y ago
This didn't read like gambling, just a lot of work.
- mettamage 5y ago
  IMO this is how professional gambling looks like.
- cbozeman 5y ago
  Every professional gambler to whom I've spoken or have known easily puts in 60+ hours a week... some of them, to make no more than $40,000 - $50,000 a year. I struggle with understanding that mentality, since just about anywhere, doing just about anything, if you're working 60+ hours, you can easily make double those numbers, but hey... I'm glad people like that exist.
  - eru 5y ago
    There are lots of other jobs with crazy effort and not that much money for the median guy. Journalism for example. Or music, or sports.
  - user5994461 5y ago
    Define what's a professional gambler? I've worked in betting and I've seen people consistently printing millions of pounds a year with remarkable stability over the years (I was myself running an exchange). However they may not fit the popular image of an older man addicted to horses and drinking. They're professional working at (small) companies doing that activity full time.
    - cbozeman 5y ago
      > Define what's a professional gambler? It's your full-time job and you pay all your bills doing it.
kqr 5y ago
The insight about starting from the public odds is so important. It's like running from a polar bear: you don't have to outrun the bear, only your buddy. Not counting the track take, any deviation from the public odds in the correct direction makes you money. (And the public is often reliably biased -- this is why they say sports betting is more about betting on gamblers than on games.) A smaller deviation makes you less money that one time, of course, but it also saves you lots of money if you're wrong, ensuring you live to bet another day. Also in real life: people in aggregate aren't dumb (just a bit biased), so using the public opinion as your prior and then adjusting it Bayesically with private information gets you a more reliable edge than guessing wildly.
- le-mark 5y ago
  The dynamics of odds movements are interesting in their own right imo. Some sports, with many days between matches (nfl, college football) lines can move drastically between when odds are published to match start. Others sports that play daily or by-daily often don’t see the swings. And then what facotors influence the line movement? People with predictive models that see great value in opening lines can move the line a lot. Things like injuries, starting lineup, breaking news before the match can certainly move the line. Casual bettors and fans betting on their team (the public) move the line but usually day of the match. The key insight is the books are trying to balance winners/losers to maximize their profit, that’s why the line moves. It’s also why historically spread betting is nearly 50% odds.
  - joosters 5y ago
    The key insight is the books are trying to balance winners/losers to maximize their profit, that’s why the line moves. In two-way markets (e.g. a tennis match) maybe. With more outcomes, it's a rare market that ends up with the bookmakers locking in a profit regardless of the outcome. For horse racing, the favourite in the race is most often a loser in the book for the betting firm. Even for football (soccer) betting, i.e. team A/draw/team B, generally a bookie is very happy for a draw, because people just can't get very enthusiastic about betting on a tied result. Raising the odds on offer for a draw won't attract many extra regular punters, it only risks luring professionals who are more sensitive to the odds - and they aren't the customers you really want!
hamhamed 5y ago
I've been spending almost every weekend for the past few months trying to break a crypto crash game (called bustabit) using ML. While I'm also dealing with probabilities, my challenge has to do with the limited data I'm dealt with even though their API is public. In horse racing, you have access to so much shit that you can feed into the AI, like rider statistics, horse performance, horse attributes, etc. In my case, I only have the game/round number and the bust result (red or green). From thereon, I have to create many other variables (aka featuring engineering) like round win/lose streaks, moving averages, MACD, etc. I can also feed in what and if other players are currently betting for the round or not. Currently, the house always wins. And their game is rigged so they have that 1% advantage over you. However, so far with my AI, I've came with enough confidence score to win as long as my bot plays 0.001% of the games.. which isn't declared victory since those blackswan games happen once every 3 weeks. There's also another way to beat it without using any ML, just plain old fibbonaci martingale - requires around 10k starting money for error margin but it ends up always ahead of the house.. That's just a math way to beat it and not very fun :) It's probably crazy of me to even attempt to predict randomness, but there's something intriguing when you mix big data and ML with forced randomness. Again, they have to keep forcing the odds to be 49% vs 51%..
- kqr 5y ago
  Do I get the premise of the game right if I think you either lose all of your wager or get some random odds on it? But with the house take at 1 %, isn't it a negative sum game and therefore impossible to beat in the long run? And even if you could play it at fair odds, wouldn't the solution simply be the Kelly bet? I'm struggling to see under what circumstances it is an interesting game to work, so I suspect I'm missing some important nuance.
  - eru 5y ago
    I found their website at https://www.bustabit.com/ https://www.bustabit.com/ Seems like bankrolling the bank, a feature they offer, is much more lucrative. Assuming they don't run away with your money.
- phyalow 5y ago
dougb 5y ago
His company is http://www.ave4.com/ http://www.ave4.com/ I meet him a few times, interviewed to work there (didn't get the job.) I mostly talked to a lawyer who was very nice, but reminded me of Kobayashi from the Usual Suspects. The offices are a bit extravagant with some amazing original artwork on the walls, https://www.jendoco.com/portfolio/fourth-avenue-analytics/ https://www.jendoco.com/portfolio/fourth-avenue-analytics/ Pre covid he hosted meetups with Pittsburgh's R Users Group, https://www.meetup.com/Pittsburgh-useR-Group/events/260701660/ https://www.meetup.com/Pittsburgh-useR-Group/events/26070166... He is also mentioned in http://www.fortunesformula.com/ http://www.fortunesformula.com/ which I really enjoyed.
- goodoldboys 5y ago
  I think you mean Keyser Soze - Kobiyashi is the hot dog eating champion
  - Malp 5y ago
    Kobayashi is Keyser Soze's right-hand man
    - goodoldboys 5y ago
      Ah that’s right... totally forgot
teddykoker 5y ago
You can find Benter’s paper about the model here: https://www.gwern.net/docs/statistics/decision/1994-benter.pdf https://www.gwern.net/docs/statistics/decision/1994-benter.p... About a year ago I read this and attempted to build a similar model (with more layers ;)) using data I scraped from Hong Kong Jockey Club’s website. Although I used much fewer features, it still produced profit in held-out races: https://teddykoker.com/2019/12/beating-the-odds-machine-learning-for-horse-racing/ https://teddykoker.com/2019/12/beating-the-odds-machine-lear.... Obviously there are many caveats when backtesting like this but I thought it was a fun project!
- ackbar03 5y ago
  So basically the model was just a single layer neural net with extra proprietary data?
  - teddykoker 5y ago
    Yup! Just a multinomial logistic regression model with a bunch of proprietary data and engineered features.
  - Spooky23 5y ago
    Data and meaning is the key. I had a coworker who would prepare for weeks for stakes races and follow a few second tier horses as well. Twitter made some aspects easier as there is a racetrack Twitter community. His specialty was identifying exactas where a long shot would place or win with a favorite. He’d pay people to film workout at Belmont and Saratoga and tweak his model (an Excel spreadsheet) based on what he saw. He would have a sense based on the workouts, weather, etc and would pick 4-10 races a week.
sokoloff 5y ago
I don’t get why they felt like they couldn’t cash the winning bet. They paid the money and placed the bet; might as well take the win.
- user5994461 5y ago
  It's a major national event for Hong Kong, like the guy winning a $1B national lottery. The winner will be shown on TV and newspapers, a random citizen who accidentally hits the jackpot and got lifted to being a king. Except in that case, it's some foreign math computer nerds, who have already profited billions. Billions of dollars taken off the cumulative bets of Hong Kong citizens. It's not acceptable socially or politically. The guy was already cashing hundreds of millions anyway, leaving a few millions on the table doesn't make a difference to him. Better stay anonymous and safe.
  - woutr_be 5y ago
    > The winner will be shown on TV and newspapers, a random citizen who accidentally hits the jackpot and got lifted to being a king. I’m not aware of this happening in HK. Mark six (lottery) winners are not shown on TV or in newspapers. Winners are announced, yes, but it doesn’t include their identities. I’m not sure about the process when you win millions of dollars, but you can buy tickets at the track, which are anonymous, and you just cash them in later. Of course, my experience is only winning a few $100s. > It's not acceptable socially or politically. Socially, I more expect it to be the other way around. Other gamblers will probably applaud them for finally doing the impossible. This was also in 2001, nobody would even consider this to be politically unacceptable. Even now, that wouldn’t be the case.
    - _carbyau_ 5y ago
      "Other gamblers will probably applaud them for finally doing the impossible." I suspect not. Some people have the idea that "luck" is intrinsic to yourself, that it is somehow a measure of your own worth, like karmic rewards. This view seems prevalent in China. Thus systematically beating the odds will seem like cheating. edit:brevity, sticking to the point.
afturkrull 5y ago
The short version is Benter used arbitrage on masses of bets.

187 points by mrbbk 5y ago

deleted 5y ago

[deleted]

magicroot75 5y ago

Is there a book on this guy? Fascinating stuff and I'd love to dig deeper.

sanxiyn 5y ago
Yes there is, from the man himself. Computer-Based Horse Race Handicapping and Wagering Systems (2020).
- PaulRobinson 5y ago
  That's simply a reprint of his 1994 paper, which is available here: https://www.gwern.net/docs/statistics/decision/1994-benter.pdf https://www.gwern.net/docs/statistics/decision/1994-benter.p...

sneak 5y ago

> “F---,” Benter said. “We hit it.” Pretty sure he didn't say "F---". Why the fuck is bloomberg misquoting this guy? Why publish a quote you're just going to censor?

reedf1 5y ago
Someone may be offended seeing the letters u, c, and k.
- eru 5y ago
  Which might even be the guy they quoted himself.
PhantomGremlin 5y ago
This censorship mentality is pervasive. I also hate it. For example, even in something as important as a recent US Supreme Court case, the Washington Post reported it this way: “F--- school, f--- softball, f--- cheer, f--- everything,” 14-year-old Brandi Levy typed into Snapchat one spring Saturday. https://www.washingtonpost.com/politics/courts_law/supreme-court-cheerleader-first-amendment/2021/04/25/9d2ac1e2-9eb7-11eb-b7a8-014b14aeb9e4_story.html https://www.washingtonpost.com/politics/courts_law/supreme-c... No, Brandi didn't actually type all those dashes. Fortunately, the court documents have the actual words in them.

fighterpilot 5y ago

If I remember properly: lots of proprietary data that was painstakingly assembled, and quite simple models on that data.

nojito 5y ago
Data science in a nutshell.

swader999 5y ago

This didn't read like gambling, just a lot of work.

mettamage 5y ago
IMO this is how professional gambling looks like.
cbozeman 5y ago
Every professional gambler to whom I've spoken or have known easily puts in 60+ hours a week... some of them, to make no more than $40,000 - $50,000 a year. I struggle with understanding that mentality, since just about anywhere, doing just about anything, if you're working 60+ hours, you can easily make double those numbers, but hey... I'm glad people like that exist.
- eru 5y ago
  There are lots of other jobs with crazy effort and not that much money for the median guy. Journalism for example. Or music, or sports.
- user5994461 5y ago
  Define what's a professional gambler? I've worked in betting and I've seen people consistently printing millions of pounds a year with remarkable stability over the years (I was myself running an exchange). However they may not fit the popular image of an older man addicted to horses and drinking. They're professional working at (small) companies doing that activity full time.
  - cbozeman 5y ago
    > Define what's a professional gambler? It's your full-time job and you pay all your bills doing it.

kqr 5y ago

The insight about starting from the public odds is so important. It's like running from a polar bear: you don't have to outrun the bear, only your buddy. Not counting the track take, any deviation from the public odds in the correct direction makes you money. (And the public is often reliably biased -- this is why they say sports betting is more about betting on gamblers than on games.) A smaller deviation makes you less money that one time, of course, but it also saves you lots of money if you're wrong, ensuring you live to bet another day. Also in real life: people in aggregate aren't dumb (just a bit biased), so using the public opinion as your prior and then adjusting it Bayesically with private information gets you a more reliable edge than guessing wildly.

le-mark 5y ago
The dynamics of odds movements are interesting in their own right imo. Some sports, with many days between matches (nfl, college football) lines can move drastically between when odds are published to match start. Others sports that play daily or by-daily often don’t see the swings. And then what facotors influence the line movement? People with predictive models that see great value in opening lines can move the line a lot. Things like injuries, starting lineup, breaking news before the match can certainly move the line. Casual bettors and fans betting on their team (the public) move the line but usually day of the match. The key insight is the books are trying to balance winners/losers to maximize their profit, that’s why the line moves. It’s also why historically spread betting is nearly 50% odds.
- joosters 5y ago
  The key insight is the books are trying to balance winners/losers to maximize their profit, that’s why the line moves. In two-way markets (e.g. a tennis match) maybe. With more outcomes, it's a rare market that ends up with the bookmakers locking in a profit regardless of the outcome. For horse racing, the favourite in the race is most often a loser in the book for the betting firm. Even for football (soccer) betting, i.e. team A/draw/team B, generally a bookie is very happy for a draw, because people just can't get very enthusiastic about betting on a tied result. Raising the odds on offer for a draw won't attract many extra regular punters, it only risks luring professionals who are more sensitive to the odds - and they aren't the customers you really want!

hamhamed 5y ago

I've been spending almost every weekend for the past few months trying to break a crypto crash game (called bustabit) using ML. While I'm also dealing with probabilities, my challenge has to do with the limited data I'm dealt with even though their API is public. In horse racing, you have access to so much shit that you can feed into the AI, like rider statistics, horse performance, horse attributes, etc. In my case, I only have the game/round number and the bust result (red or green). From thereon, I have to create many other variables (aka featuring engineering) like round win/lose streaks, moving averages, MACD, etc. I can also feed in what and if other players are currently betting for the round or not. Currently, the house always wins. And their game is rigged so they have that 1% advantage over you. However, so far with my AI, I've came with enough confidence score to win as long as my bot plays 0.001% of the games.. which isn't declared victory since those blackswan games happen once every 3 weeks. There's also another way to beat it without using any ML, just plain old fibbonaci martingale - requires around 10k starting money for error margin but it ends up always ahead of the house.. That's just a math way to beat it and not very fun :) It's probably crazy of me to even attempt to predict randomness, but there's something intriguing when you mix big data and ML with forced randomness. Again, they have to keep forcing the odds to be 49% vs 51%..

kqr 5y ago
Do I get the premise of the game right if I think you either lose all of your wager or get some random odds on it? But with the house take at 1 %, isn't it a negative sum game and therefore impossible to beat in the long run? And even if you could play it at fair odds, wouldn't the solution simply be the Kelly bet? I'm struggling to see under what circumstances it is an interesting game to work, so I suspect I'm missing some important nuance.
- eru 5y ago
  I found their website at https://www.bustabit.com/ https://www.bustabit.com/ Seems like bankrolling the bank, a feature they offer, is much more lucrative. Assuming they don't run away with your money.
phyalow 5y ago

dougb 5y ago

His company is http://www.ave4.com/ http://www.ave4.com/ I meet him a few times, interviewed to work there (didn't get the job.) I mostly talked to a lawyer who was very nice, but reminded me of Kobayashi from the Usual Suspects. The offices are a bit extravagant with some amazing original artwork on the walls, https://www.jendoco.com/portfolio/fourth-avenue-analytics/ https://www.jendoco.com/portfolio/fourth-avenue-analytics/ Pre covid he hosted meetups with Pittsburgh's R Users Group, https://www.meetup.com/Pittsburgh-useR-Group/events/260701660/ https://www.meetup.com/Pittsburgh-useR-Group/events/26070166... He is also mentioned in http://www.fortunesformula.com/ http://www.fortunesformula.com/ which I really enjoyed.

goodoldboys 5y ago
I think you mean Keyser Soze - Kobiyashi is the hot dog eating champion
- Malp 5y ago
  Kobayashi is Keyser Soze's right-hand man
  - goodoldboys 5y ago
    Ah that’s right... totally forgot

teddykoker 5y ago

You can find Benter’s paper about the model here: https://www.gwern.net/docs/statistics/decision/1994-benter.pdf https://www.gwern.net/docs/statistics/decision/1994-benter.p... About a year ago I read this and attempted to build a similar model (with more layers ;)) using data I scraped from Hong Kong Jockey Club’s website. Although I used much fewer features, it still produced profit in held-out races: https://teddykoker.com/2019/12/beating-the-odds-machine-learning-for-horse-racing/ https://teddykoker.com/2019/12/beating-the-odds-machine-lear.... Obviously there are many caveats when backtesting like this but I thought it was a fun project!

ackbar03 5y ago
So basically the model was just a single layer neural net with extra proprietary data?
- teddykoker 5y ago
  Yup! Just a multinomial logistic regression model with a bunch of proprietary data and engineered features.
- Spooky23 5y ago
  Data and meaning is the key. I had a coworker who would prepare for weeks for stakes races and follow a few second tier horses as well. Twitter made some aspects easier as there is a racetrack Twitter community. His specialty was identifying exactas where a long shot would place or win with a favorite. He’d pay people to film workout at Belmont and Saratoga and tweak his model (an Excel spreadsheet) based on what he saw. He would have a sense based on the workouts, weather, etc and would pick 4-10 races a week.

sokoloff 5y ago

I don’t get why they felt like they couldn’t cash the winning bet. They paid the money and placed the bet; might as well take the win.

user5994461 5y ago
It's a major national event for Hong Kong, like the guy winning a $1B national lottery. The winner will be shown on TV and newspapers, a random citizen who accidentally hits the jackpot and got lifted to being a king. Except in that case, it's some foreign math computer nerds, who have already profited billions. Billions of dollars taken off the cumulative bets of Hong Kong citizens. It's not acceptable socially or politically. The guy was already cashing hundreds of millions anyway, leaving a few millions on the table doesn't make a difference to him. Better stay anonymous and safe.
- woutr_be 5y ago
  > The winner will be shown on TV and newspapers, a random citizen who accidentally hits the jackpot and got lifted to being a king. I’m not aware of this happening in HK. Mark six (lottery) winners are not shown on TV or in newspapers. Winners are announced, yes, but it doesn’t include their identities. I’m not sure about the process when you win millions of dollars, but you can buy tickets at the track, which are anonymous, and you just cash them in later. Of course, my experience is only winning a few $100s. > It's not acceptable socially or politically. Socially, I more expect it to be the other way around. Other gamblers will probably applaud them for finally doing the impossible. This was also in 2001, nobody would even consider this to be politically unacceptable. Even now, that wouldn’t be the case.
  - _carbyau_ 5y ago
    "Other gamblers will probably applaud them for finally doing the impossible." I suspect not. Some people have the idea that "luck" is intrinsic to yourself, that it is somehow a measure of your own worth, like karmic rewards. This view seems prevalent in China. Thus systematically beating the odds will seem like cheating. edit:brevity, sticking to the point.

afturkrull 5y ago

The short version is Benter used arbitrage on masses of bets.