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Lay the Favorite: A Memoir of Gambling [...and other books about gamblers]

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chin:
The Story of The Computer Group

http://www.offshorebettor.com/images/COMPUTER.htm

chin:
I recently watched a CBS 60-Minute story on Bill Walters, and was intrigued about gambling on sports events. I subsequently bought two books on sports betting in the US. (See link about about Bill Walters' earlier betting venture The Computer Group.) The book are "The Odds - One Season, Three Gamblers and the Death of Their Las Vegas" by Chad Millman, and the other one "Smart Money" by Michael Konik.

I just finish reading The Odds. The three main characters portraited in the book included a middle aged old hand with a university education from the prestigious U Penn, a young kid from small town America who decided not to attend university but to bet full time in Las Vegas, and then the sports book manager at the casino Stardust. The stories have a very familiar tone, as related to in other books about gamblers - large swings in bankroll, huge emotional ups and downs, self loathing, social isolation, and often broken relationship or family.

I always suspect that large swings in bankroll was due to overbetting. In the case of the middle aged old hand, at least once in the book, he was mad at himself for overbetting. However in the young kid's story, he seem to be betting very prudently only 1% of his bankroll per event. (The book mentioned that he was once down $3,500 or about 10% of his bank, and he always bet about $200 per basketball game.)

The emotional swings (and sometimes self loathing) also seemed to be a common thread in most books about gamblers. For many of the large gamblers, it may not simply because of the large amount of money involved, as they should be somewhat desensitized to large sums. I think the problem was emotional attachments to the game, since they handicap the games manually (even though often with the helps of computers.) It didn't help that they work alone in their home (in the case of the two gamblers, not the casino manager).

For me, reading this book was an educational experience about how sports betting works. In my first job out of school, the guy sitting next to me went to USC (University of Southern California, a.k.a. University of Spoiled Children). He told me many times how he booked bets from his college friends, told me about making lines, etc... Now I finally know what he was talking about.

I am just starting to read Smart Money, and in the first few pages I read, I think the tone would be quite different from the Odds. This book is written by a journalist who worked for Bill Walters for a few years. The book did not mention Bill Walters by name, but I read that he was the boss mentioned in this book. I may commend on Smart Money once finishing reading it.

chin:
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Another observations from the books about sports betting.

There are lots of data available, and the vig is "only" about 5%. So it should be much easier to build a profitable model, than for horse racing.

However, since you bet with bookies, who never like winners, there are quite a bit of operational complexity in placing the right amount of bets. The operational cost and leaks are also higher than betting into pari mutuel pools.
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chin:
Smart Money, by Michael Konik

Like I mentioned above, the tone of the book in the beginning was markedly different from The Odds. Because he was on the winning side from Day One.

The author is a free lance journalist for slick gross magazines, often covering gambling related stories. He was recruited by the big gambler Rick to front the big gambles. The reason for needing someone to front is the same as mentioned in other books mentioned in this thread - bookies do not like winners. So winner always need to find someone new to place bet for them.

Since Rick already have a winning method, the bets the author placed for him have more winners than losers. The author worried not about finding winners, but finding bet takers. The first part of the book describe a lot about how the author played sucker to conceal the smart bets, how he getting used to be treated like a high roller, free dinner in top restaurants completed with 1st growth Bordeaux, etc...

After a while, he was probably desensitized to handling large amount of cash and stakes. This is IMHO a pre-requisite for someone to step up into the big game, and essential for his mental health. Two posts ago I provided a link to the story of The Computer Group, where the real founder of the intellectual concept had problem handling large amount of cash, thus relinquish control of the operation, and eventually things got out of hand so much the group was broken up.

Further down the road, just when he started to got comfortable handling large amount of money and large bets, the author started to show signs of addiction - to look at the betting spreads, to watch games, to place bets, at the expenses of real personal relationship. In this case with his girlfriend. Toward the end, the author helped found another betting group based on computer modeling of game results, while he was still placing bets for Rick (No matter how he explain, it was a clear conflict of interest.) At the end of the book, he stopped all gambling - either placing bets for Rick or participate in the new computer betting group he help formed.

Through out the book, the one thing stayed constant is the difficulties and operational hassles to place bets with bookies, when you are a known winner. This is a strong reminder that if you can only bet with bookies, don't be bother to develop any winning system. You will be kicked out, and eventually the cost to place a bet may just be high enough to off set any potential gains. (Either the bookies not paying up, or your placing agent gone missing. Then you will need a lot more winner to off set the loss.)

I read far more books about gamblers than the ones listed here. Again one of the recurring themes in almost all these books is the self-destructive behaviors developed in many of these professional gamblers career. Like addition, social isolation, betrayal, self loathing, extreme emotional ups and downs. It does not matter what's the instrument of the gamble - sports, horse, poker. It even does not matter which side you are on - the gambler or the bookie. Yet everyday lots of people dream of making a living by gambling. Maybe it was the (perceived) freedom gamblers enjoy?

There is another key problem I see from reading this book, the story about The Computer Group, The Eudaemonic Pie, and Lay the Favorite. Many of these gambling ventures required group effort, yet they didn't organized in a business like manner. If they have clearly define capital contribution, responsibility, intellectual property ownership, leadership, etc... their ventures may be much more fruitful. And equally important their gambling life may have some resemblance of structure and normalcy, thus avoiding many of the self-destructive behaviors.

Maybe it was like the review in the first post of this thread, a big gambler who live a normal life does not make an interesting book. Thus books get published need to have the dramas.

The author has declare up front that he changed the names and timings to protect his source. I strongly suspect that some characters and stories were synthesized. But for the sake of interest, I read in some online forum that Rick in this book actually refers to Billy Walters. You can go to SBC 60 Minutes web site to watch a recent interview of Walters.

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Lastly, after reading this book, I really think that sports betting can be modeled. Modern days professional sports are stat driven to feed the audience (and perhaps their gambling need.) The vig is relatively low. The the number of events plentiful. It should be a matter of spending the time to build the right model.
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chin:
My next reading is The Predictor, which is again sort of about gamblers. But this time in the biggest casino in the world - the financial markets.

The Predictor is sort of a sequel to The Eudaemonic Pie. It follows the key players in the Eudaemonic project to their next real business venture. It's the story of rocket scientists taking on the financial market.

I almost finish reading the book and will either have a separate thread or follow up on The Eudaemonic Pie.

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