Hacking the Racetrack

[icarus]

Multimillion-dollar bankrolls and probability-crunching systems are redefining horse racing - and leaving the odds in the dust.
By Michael Kaplan
http://www.wired.com/wired/archive/10.03/
not available online until 10/03/02.

[rubbintug]

What's the go there?
Does one have to subscribe to read the bloody story?
Sounds interesting article though.

[masun]

Wired is actually a magazine which you can buy at bookshops or newsstands without too much difficulty even here in HK. The full content of every issue of the magazine is available online a few weeks after its publication.

[hobbes]

rub'ntug -- read 1st post by icarus. article leads off with 1st column relating a night of betting at the home of one mr. rod dufficy.
remainder is reasonably vague with ziemba quoted more so than anyone here so it appears no one was prepared to talk to the reporter for attribution.

[hobbes]

:p

[masun]

Does anyone know the said mr. rod dufficy? Is he really that successful?

[hobbes]

masun i think most peops posting here know mr. rod dufficy. one of his oldest acquaintances may be wanchai wendy, but then anyone who has frequented wanchai for a few yrs would know him.
the journalist, not having much of a brain, got his currencies confused more than once i think. can be a bit confusing eh what?

[cheesebeast]

HK millionaires show that betting is science, not sport
Author: MAX PRESNELL
Date: 15 Mar 2002
Publication: Sydney Morning Herald

'Crisscrossing telephone wires snake along the carpeting of Rod Dufficy's littered home office near
Hong Kong's Happy Valley racetrack. Dressed in baggy sweatpants and a gym shirt, Dufficy, 32,
sits at a large L-shaped desk, rocking on his chair and eyeing three computer screens crowded with numbers. He is cramming for a race that begins in 22 minutes, calling up information from an online database and sifting it through a betting analysis program built into his system. The Australian is one of Hong Kong's elite breed of super-successful professional gamblers, computer-assisted horse bettors who work in teams and net millions at the races each year."
So reports Wired, an influential American magazine.
``Three slender Hong Kong sisters face Dufficy, waiting for a printer to spit out a list of a couple of hundred bets with potentially big payoffs."
Go back 12 years to the old Sydney Morning Herald bunker at Broadway. A world weary hack, more comfortable with a quill and ink, toils over a computer. ``My load is heavy," he says. ``Rod,
can you get this bastard of a thing to work. I've just hit 55##= PC toggle and everything has disappeared. Pol Pot is right, every computer should be put to the torch."
Young Rod Dufficy, at that stage, is still working on the racing form cards. He hits a few keys and the screen lights up.
Rod was a form clerk, most racing writers started that way. He wrote the details of a race onto a
large card kept for every horse. It's never been the same since the cards were replaced by the
computer printout. But Rod doesn't seem to be inconvenienced.
A few years back I was at Honkers for the International meeting and Rod had reached the greatest goal of all racing writers: he owned a bar.
Perhaps he is only little league as far as Hong Kong high-rollers are concerned, but is still doing nicely.
As Wired pointed out: ``This city stands as the land of opportunity for tech-inclined handicappers.
The allure centres on Hong Kong's massive handle the total amount of money wagered on each race which is the highest in the world. It allows the teams to lay hundreds of thousands of dollars on
a single race without upsetting the odds. But Hong Kong racing has other attractions as well. Run by the not-for-profit Hong Kong Jockey Club, it is scrupulously honest (fixing would hurt computer bettors calculations) and there is a pool of only 1,200 horses per season (a manageable number for form students). Then there are extravagant exotic bets and parlays, comprising a rich smorgasbord of financial opportunities that seems custom-made for the computer teams. One, the Triple Trio, requires picking the top three finishers in three races and can pay six-figure dividends.
``Computer teams pick their winners by culling data from past performances. They use custom-tailored software programs to determine their own odds, search for overlays (situations in which their odds the calculated, objective odds are more advantageous than the public's typically
subjective odds) and place bets that can deliver big dividends at a reduced risk. Team leaders
provide the multimillion-dollar bankrolls."
``Jobs with the teams range from accounting, to code writing, to placing bets. Annual salaries start at $US50,000 for those who enter the wagers by phone, and rise to more than $1 million for chief technology officers."
Estimates of $100m can be won in a good season, netting the boss $50m or more. Australians have
always played a major role in Hong Kong racing and the punt is no different. In more recent years the ``Adelaide syndicate", two brothers, have played the market successfully, as they have at home.
The Christopher Columbus of this land of plenty, discoverer of the mother lode, is Bill Benter.
Apart from producing the right figures, Benter, US-educated, is regarded as ``more skilled at
masking bets than anyone else. It disguises his action. He leaves no footprints."
Benter has lectured at Hong Kong universities, consulted with mathematicians, has been president
of a Hong Kong Rotary club and is a generous donor to charity.
According to Wired, Benter has employees whose sole job is to review race tapes after each
meeting. They judge each horse on 130 characteristics attributes such as speed during the early section of the race, whether it was bumped coming out of a turn, the quality of its recovery from the bumps and how it finished.
The information goes into the database where it can be cross-referenced and called up to help
predict the outcome of any future event, attempting to simulate the race before it has been run.
The software then determines each horse's likelihood of winning. When the horse's computer odds are better than the public's, the message is to bet.
Benter developed the first successful program put into use at Happy Valley. Later came Sha Tin.
Benter got his start in the mid-1970s when he discovered Beat The Dealer, a bible for blackjack
and card counters. It was during this period he met his future partner, Allan Woods, an actuary
turned counter. Benter stumbled upon a handicapping guide and turned from casino to horse racing.
Woods is said to have bankrolled him but they fell out. Woods now captains another team.
Like most successful punters the syndicates avoid publicity. Leaks about them come from
AsiaweekCom and Wired. An article titled ``The winning edge" estimated that Benter's ``take
home pay amounts to $37 million a year".
He was winning so much he was kicked out of Las Vegas, and even in Hong Kong has not been
able to place bets over the phone since 1996, as officials regard the activities as ``not in the best interests of the general public".
Yet Winfred Englebrecht-Bresges, the Hong Kong Race Club's director of racing, told Wired:
``We are worried that if you have the computer people then your average customer sees himself as
having no chance. But they're the bettors who bring us 95 per cent of our revenue."
Apparently Benter likens himself to a professional golfer who participates in amateur tournaments and wins all the prizes. ``If we do make money, the money has to come from somewhere. Well, yes, the general public loses at a somewhat higher ratio," Benter told AsiaweekCom.
Back at Broadway, the hack was whining for coffee. Dufficy riffled for change and was having
trouble making the weight. Old papers and the crust of a pizza, much of which was eaten for lunch two days earlier, litters a nearby desk under which a rugby league writer, renowned for computer skill, has taken refuge. Close by, Peter FitzSimons, shoeless and with socks very much indicating recent mileage, is tapping on a keyboard, his builder's hat, worn for show rather than safety, is somewhat askew.
Rod wants a change of scenery. ``I've been offered a job in Hong Kong," he says.
``You'll end up pulling a rickshaw," warned the hack.

[cheesebeast]

``You'll end up pulling a rickshaw,' - i heard he's in training for just that!

[hobbes]

or racing around on yachts!