5 ms·

I am a former professional gambler and now I don’t gamble much, because I have neither the time nor interest to find good wagers, but what I do is on predictit.

I am a former professional gambler and now I don’t gamble much, because I have neither the time nor interest to find good wagers, but what I do is on predictit. Being a great gambler mostly means not gambling until you have an edge, and what he says about and market being less accurate than 538 is true in my experience. I’ve been betting on there every couple years for maybe ten or so, it’s held up well. As many mentioned here, the fees are high. That contributes to market inefficiency for sure. Arbitrage opportunities pop up there all the time, but ones that are profitable after the fees less so. They do happen though. He is neglecting how long contracts take to settle. There’s a lag of two months between when the election and when president is sworn in. It’s not unreasonable to sell your winning position at 98% just to be able to bet on more things. It was the first time in 20 years of hoping for such an opportunity that I managed to get to bet on something that had already happened. That’s every gambler’s dream and I’m unaware of many instances of it happening without breaking laws or trickery. But even then, you bet 93 cents to win 7 and then pay 5% on cashout so it wasn’t exactly making people rich.

blitzar 3y ago
> I managed to get to bet on something that had already happened. In less liquid in play sports betting exchanges have this happen all the time - generally you are getting $1 for every $1000 wagered and settlement will take anywhere from minutes to days depending upon the event.
deleted 3y ago
[deleted]
bluedays 3y ago
How does that work? Being a professional gambler, I mean. I'd love to know more about this.
- Geezus_42 3y ago
  Pretty sure it's a joking way of saying they used to be a day trader.
  - dexwiz 3y ago
    You can grind out poker games for a living, especially when there is a steady stream of rubes that think they’re hot stuff because they clear out friendly home games. In the long term those kind of people always lose to the pros.
    - hx8 3y ago
      I grinded online poker games for a summer in college. I observed opponents betting behavior and classified them into one of a half dozen strategies and then ran a strict algorithm based on who I was betting against. I ran three tables at the same time, finding success in rapid low stake games. My edge at the time was varying my play based on my opponent. Many of the other professional low stake players at the time were running simpler strategies on more tables.
  - mattmaroon 3y ago
    Haha it was not. While I goofed around with that in the late 90’s/early aughts I never believed it was a long-term profession and never really won or lost much at it.
- jfoutz 3y ago
  Can't speak from personal experience, but OP laid it out pretty clearly. You wait till you have an edge, then you bet. There are various books that try to capture it. Doyle Brunson's super system is like way outdated, but there are some funny bits about being a Texas road gambler getting run out of town. Annie Duke has a book I believe. My window into that world is pretty narrowly focused on poker. I'll always recommend _Positively Fifth Street_ by James McManus. He doesn't really lay out how to do it step by step, but takes you along for a ride as to what the world looks like from that perspective. kinda.
  - ssharp 3y ago
    Another big aspect of professional gambling is actually being able to place bets once you have an edge. This is obviously not an issue in poker but is in most other games: The casino will ban you if you count cards in blackjack. The sportsbooks will limit your action or ban you if the figure out you have an edge (or just see that you're winning or betting in certain patterns).
- defen 3y ago
  The IRS has various rules in place that determine whether gambling is your business / profession. If you qualify as a professional gambler, you can deduct losses against your winnings (just like casual gamblers can) but you can also deduct your "business expenses" (e.g. cost of travel, hotels, meals, etc that you spend in pursuit of your business).
  - yieldcrv 3y ago
    2017 tax reform took all of that away for gamblers. they are on as equal footing as casual gamblers, at least for when net losses exist, there are no more NOLs to carry forward (or back) which is what made that status the most useful https://www.journalofaccountancy.com/issues/2018/oct/pro-gambling-net-losses.html https://www.journalofaccountancy.com/issues/2018/oct/pro-gam... but some deductions maybe yeah
    - mattmaroon 3y ago
      I did not know that! That was well after the decade where I qualified.
- paulpauper 3y ago
  like r/wallstreetbets. Some people making consistent huge $ over there. You look for a setup which has a edge, like buying 0-day SPY calls if the market is down a bit. Backtest strategy and use something like the Kelly formula to find optimal betting amount. if you can make a living at this, then I guess that would make you a professional.
- quickthrower2 3y ago
  The most open information is about poker. See the forums. Many of the concepts there apply to other sports. The idea that you don’t know if you are any good until you played 10000 hands etc. Trying to make money off lots of little edges. In a sport you probably need to model every game very well, use AI/ML (mostly linear regression though). Honestly it is boring frustrating work IMO.
  - somenameforme 3y ago
    10,000 hands in poker is nowhere even close enough to get a significant sample, unless you're playing extremely weak players where you just have a girnomous edge. But those sort of games are very uncommon. There were plenty of instances of strong, winning players going through swings that lasted hundreds of thousands of hands. A more reasonable baseline sample would be ~500,000 hands. Frustrating is definitely a great way to describe the game, and emotionally crushing. Like imagine one is playing a 5/10 no limit hold'em game - so people are generally buying in for about $1000, unless they're from Spain. An extremely good player might have a longterm winrate of around 3bb/100 there. In 100 hands, there's every chance you'll be involved multiple pots, easily for thousands of dollars. And your long-term expectation is about $30 out of all of that. So you'll go through short term swings where you're up tens of thousands of dollars in very short periods of time, swings where you're down tens of thousands of dollars - all to get your $30 per 100. And you never become completely numb to the money, even after playing millions of hands.
    - quickthrower2 3y ago
      You are probably right. I could have misremembered the number of hands, the main point is it is alot more than most think. One to ten games of soccer is enough to tell roughly how good someone is, by comparison.
- mattmaroon 3y ago
  I mostly played poker, where you can have an advantage over other players that is greater than the rake the casino takes. But I also found all sorts of random opportunities here and there where I had an edge. Where a casino comp system gives you more in rewards than the game takes from you for instance. (That’s both common and legal but they will cut you off because you are essentially taking the comps they want to go to the people they make more off of so it’s a lot harder to make a lot at than it used to be.) Or when an online casino is not careful enough about how you earn the bonuses they give you. Things of that nature. There are people also who can do it at things like horse, racing or sports betting, but I never knew enough about either of those or wanted to learn. My Predictit wagering has mostly been on the theory that exactly what this article says is true: people are betting who they like and the polling aggregators are better. I really just look for arbitrage opportunities or discrepancies between the market and 538 that are large enough to overcome the fees. The fees are high enough to make it not happen a ton, but it does happen.
tshaddox 3y ago
> But even then, you bet 93 cents to win 7 and then pay 5% on cashout so it wasn’t exactly making people rich. Don't forget the risk of the whole prediction market ceasing to exist or doing something blatantly fraudulent.
- olalonde 3y ago
  As a former arbitrager on MtGox, Crypto X Change and TradeHill, that's a real risk...
- laserlight 3y ago
  https://en.wikipedia.org/wiki/Credit_risk#Counterparty_risk https://en.wikipedia.org/wiki/Credit_risk#Counterparty_risk
- cabalamat 3y ago
  Indeed. Couldn't the whole article just be replaced by the phrase "transaction costs"?
paulpauper 3y ago
Also, there is no need to gamble when you can just park your $ in leveraged tech funds or even something like QQQ and make a >30% ROI every year, which has been the long-term return since 2009. This is best for large amounts of cash. The huge bull market in tech, like Nvidia and Meta stock, made other type of speculation unnecessary. A lot of people doing this now.
- beacon294 3y ago
  What happens to your QQQ in a major downturn? I have never owned it during these events.
perrygeo 3y ago
> I managed to get to bet on something that had already happened But you're not. You're betting on whether the contract will settle and when. That's quite distinct from betting on the event itself.
- mattmaroon 3y ago
  I guess the people on and other side of the wager would have agreed with you. I don’t know what odds there were of the election being overturned but I am sure they are much smaller than the odds those people were laying on it happening.
smfjaw 3y ago
you took on the settlement risk and got paid for it, if you look into financial markets and central clearing and OTC contracts, central clearing/exchanges effectively get rid of that issue.
- baq 3y ago
  for a fee, of course. and collateral requirements.
caf 3y ago
The article does mention the time-to-settle problem in footnote 9.
thaumasiotes 3y ago
> It was the first time in 20 years of hoping for such an opportunity that I managed to get to bet on something that had already happened. That’s every gambler’s dream and I’m unaware of many instances of it happening without breaking laws or trickery. There was a Chinese lottery scandal in the semi-recent past. Someone noticed that the winning numbers were posted before the close of ticket sales, and bought a winning ticket. And he completely got away with it. Then, he did it again...
ramesh31 3y ago
Predictit during the 2020 election was just about the closest thing I've ever seen to free money. Shares for Texas going blue were still at $0.30 on election night. So many people wagering with their emotions and tribalism, it was unreal.
- jakderrida 3y ago
  > Shares for Texas going blue were still at $0.30 on election night. You think that's bad? Every month or so for like 6 months, there was another bet that the FBI was going to arrest Hillary by the end of the month and odds would be like between 7% and 13%. Every month, I bought more shares it wouldn't happen. The comments were all QAnon crap about the "The Kraken" coming. It was hilarious. Some of the comments were from me because I didn't want the gravy train to stop. Wasn't a full 7% return, though. Definitely lots of fees on Predictit.

blitzar 3y ago

> I managed to get to bet on something that had already happened. In less liquid in play sports betting exchanges have this happen all the time - generally you are getting $1 for every $1000 wagered and settlement will take anywhere from minutes to days depending upon the event.

deleted 3y ago

[deleted]

bluedays 3y ago

How does that work? Being a professional gambler, I mean. I'd love to know more about this.

Geezus_42 3y ago
Pretty sure it's a joking way of saying they used to be a day trader.
- dexwiz 3y ago
  You can grind out poker games for a living, especially when there is a steady stream of rubes that think they’re hot stuff because they clear out friendly home games. In the long term those kind of people always lose to the pros.
  - hx8 3y ago
    I grinded online poker games for a summer in college. I observed opponents betting behavior and classified them into one of a half dozen strategies and then ran a strict algorithm based on who I was betting against. I ran three tables at the same time, finding success in rapid low stake games. My edge at the time was varying my play based on my opponent. Many of the other professional low stake players at the time were running simpler strategies on more tables.
- mattmaroon 3y ago
  Haha it was not. While I goofed around with that in the late 90’s/early aughts I never believed it was a long-term profession and never really won or lost much at it.
jfoutz 3y ago
Can't speak from personal experience, but OP laid it out pretty clearly. You wait till you have an edge, then you bet. There are various books that try to capture it. Doyle Brunson's super system is like way outdated, but there are some funny bits about being a Texas road gambler getting run out of town. Annie Duke has a book I believe. My window into that world is pretty narrowly focused on poker. I'll always recommend _Positively Fifth Street_ by James McManus. He doesn't really lay out how to do it step by step, but takes you along for a ride as to what the world looks like from that perspective. kinda.
- ssharp 3y ago
  Another big aspect of professional gambling is actually being able to place bets once you have an edge. This is obviously not an issue in poker but is in most other games: The casino will ban you if you count cards in blackjack. The sportsbooks will limit your action or ban you if the figure out you have an edge (or just see that you're winning or betting in certain patterns).
defen 3y ago
The IRS has various rules in place that determine whether gambling is your business / profession. If you qualify as a professional gambler, you can deduct losses against your winnings (just like casual gamblers can) but you can also deduct your "business expenses" (e.g. cost of travel, hotels, meals, etc that you spend in pursuit of your business).
- yieldcrv 3y ago
  2017 tax reform took all of that away for gamblers. they are on as equal footing as casual gamblers, at least for when net losses exist, there are no more NOLs to carry forward (or back) which is what made that status the most useful https://www.journalofaccountancy.com/issues/2018/oct/pro-gambling-net-losses.html https://www.journalofaccountancy.com/issues/2018/oct/pro-gam... but some deductions maybe yeah
  - mattmaroon 3y ago
    I did not know that! That was well after the decade where I qualified.
paulpauper 3y ago
like r/wallstreetbets. Some people making consistent huge $ over there. You look for a setup which has a edge, like buying 0-day SPY calls if the market is down a bit. Backtest strategy and use something like the Kelly formula to find optimal betting amount. if you can make a living at this, then I guess that would make you a professional.
quickthrower2 3y ago
The most open information is about poker. See the forums. Many of the concepts there apply to other sports. The idea that you don’t know if you are any good until you played 10000 hands etc. Trying to make money off lots of little edges. In a sport you probably need to model every game very well, use AI/ML (mostly linear regression though). Honestly it is boring frustrating work IMO.
- somenameforme 3y ago
  10,000 hands in poker is nowhere even close enough to get a significant sample, unless you're playing extremely weak players where you just have a girnomous edge. But those sort of games are very uncommon. There were plenty of instances of strong, winning players going through swings that lasted hundreds of thousands of hands. A more reasonable baseline sample would be ~500,000 hands. Frustrating is definitely a great way to describe the game, and emotionally crushing. Like imagine one is playing a 5/10 no limit hold'em game - so people are generally buying in for about $1000, unless they're from Spain. An extremely good player might have a longterm winrate of around 3bb/100 there. In 100 hands, there's every chance you'll be involved multiple pots, easily for thousands of dollars. And your long-term expectation is about $30 out of all of that. So you'll go through short term swings where you're up tens of thousands of dollars in very short periods of time, swings where you're down tens of thousands of dollars - all to get your $30 per 100. And you never become completely numb to the money, even after playing millions of hands.
  - quickthrower2 3y ago
    You are probably right. I could have misremembered the number of hands, the main point is it is alot more than most think. One to ten games of soccer is enough to tell roughly how good someone is, by comparison.
mattmaroon 3y ago
I mostly played poker, where you can have an advantage over other players that is greater than the rake the casino takes. But I also found all sorts of random opportunities here and there where I had an edge. Where a casino comp system gives you more in rewards than the game takes from you for instance. (That’s both common and legal but they will cut you off because you are essentially taking the comps they want to go to the people they make more off of so it’s a lot harder to make a lot at than it used to be.) Or when an online casino is not careful enough about how you earn the bonuses they give you. Things of that nature. There are people also who can do it at things like horse, racing or sports betting, but I never knew enough about either of those or wanted to learn. My Predictit wagering has mostly been on the theory that exactly what this article says is true: people are betting who they like and the polling aggregators are better. I really just look for arbitrage opportunities or discrepancies between the market and 538 that are large enough to overcome the fees. The fees are high enough to make it not happen a ton, but it does happen.

tshaddox 3y ago

> But even then, you bet 93 cents to win 7 and then pay 5% on cashout so it wasn’t exactly making people rich. Don't forget the risk of the whole prediction market ceasing to exist or doing something blatantly fraudulent.

olalonde 3y ago
As a former arbitrager on MtGox, Crypto X Change and TradeHill, that's a real risk...
laserlight 3y ago
https://en.wikipedia.org/wiki/Credit_risk#Counterparty_risk https://en.wikipedia.org/wiki/Credit_risk#Counterparty_risk
cabalamat 3y ago
Indeed. Couldn't the whole article just be replaced by the phrase "transaction costs"?

paulpauper 3y ago

Also, there is no need to gamble when you can just park your $ in leveraged tech funds or even something like QQQ and make a >30% ROI every year, which has been the long-term return since 2009. This is best for large amounts of cash. The huge bull market in tech, like Nvidia and Meta stock, made other type of speculation unnecessary. A lot of people doing this now.

beacon294 3y ago
What happens to your QQQ in a major downturn? I have never owned it during these events.

perrygeo 3y ago

> I managed to get to bet on something that had already happened But you're not. You're betting on whether the contract will settle and when. That's quite distinct from betting on the event itself.

mattmaroon 3y ago
I guess the people on and other side of the wager would have agreed with you. I don’t know what odds there were of the election being overturned but I am sure they are much smaller than the odds those people were laying on it happening.

smfjaw 3y ago

you took on the settlement risk and got paid for it, if you look into financial markets and central clearing and OTC contracts, central clearing/exchanges effectively get rid of that issue.

baq 3y ago
for a fee, of course. and collateral requirements.

caf 3y ago

The article does mention the time-to-settle problem in footnote 9.

thaumasiotes 3y ago

> It was the first time in 20 years of hoping for such an opportunity that I managed to get to bet on something that had already happened. That’s every gambler’s dream and I’m unaware of many instances of it happening without breaking laws or trickery. There was a Chinese lottery scandal in the semi-recent past. Someone noticed that the winning numbers were posted before the close of ticket sales, and bought a winning ticket. And he completely got away with it. Then, he did it again...

ramesh31 3y ago

Predictit during the 2020 election was just about the closest thing I've ever seen to free money. Shares for Texas going blue were still at $0.30 on election night. So many people wagering with their emotions and tribalism, it was unreal.

jakderrida 3y ago
> Shares for Texas going blue were still at $0.30 on election night. You think that's bad? Every month or so for like 6 months, there was another bet that the FBI was going to arrest Hillary by the end of the month and odds would be like between 7% and 13%. Every month, I bought more shares it wouldn't happen. The comments were all QAnon crap about the "The Kraken" coming. It was hilarious. Some of the comments were from me because I didn't want the gravy train to stop. Wasn't a full 7% return, though. Definitely lots of fees on Predictit.