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    The Bettor Who Decoded the Horse Racing Algorithm (Part 3)
The Bettor Who Decoded the Horse Racing Algorithm (Part 3)
Bill Benter with his wife. Source: X

The Bettor Who Decoded the Horse Racing Algorithm (Part 3)

Woods was accustomed to being the dominant partner in gambling teams, always getting his way. He never lost his temper, but once he made up his mind, he was immovable. Benter, however, was equally stubborn. Their partnership was at an end. Out of spite, Benter inserted a line of code into their software that would cause it to stop working after a certain date—a digital time bomb—although he knew Woods could easily detect and fix it later. Benter was certain that Woods would continue using algorithms to bet on horses. He decided he would do the same.

Benter's friends in Las Vegas wouldn't back him for horse racing, but they were willing to stake him for blackjack. He took their money to Atlantic City and spent two years running a team of card counters, while also brooding and refining his racing model in his spare time. By September 1988, having saved a few hundred thousand dollars, he returned to Hong Kong. As expected, Woods was still there. The Australian had employed programmers and mathematicians to improve Benter's code and was profiting from it. He had moved into a luxurious penthouse with a stunning view. Benter refused to speak to him.

Bill Benter's model. Source: Medium
Bill Benter's model. Source: Medium

Conducting research 

Benter's model demanded his full attention. It tracked about 20 inputs—a small fraction of the countless factors that affect a horse's performance, ranging from wind speed to its breakfast. In his quest for mathematical accuracy, Benter became convinced that horses raced differently based on temperature. Upon learning that British meteorologists kept a record of Hong Kong weather data in southwest England, he travelled there by plane and rail. A puzzled archivist guided him to a dusty library basement, where Benter meticulously copied years of data into his notebook. Upon returning to Hong Kong, he input the data into his computers—only to find it had no impact on race outcomes. Such was the nature of scientific inquiry.

Other improvements, such as calculating the number of rest days since a horse’s last race, yielded better results. In his first year back in Hong Kong, Benter estimated his winnings at $600,000. The following racing season, ending in the summer of 1990, he experienced a slight loss but still maintained an overall profit. He employed Coladonato, who remained with him for many years, and enlisted a rotating team of consultants including gamblers, journalists, analysts, coders, and mathematicians. As his betting volume grew, he recruited English-speaking Filipinos from the city’s housekeeper workforce to relay his bets to the Jockey Club’s Telebet phone lines, managing to place wagers at a rate of eight per minute.

A pivotal moment came when Benter decided to use a data set that was available to everyone: the Jockey Club’s public betting odds. While creating his own odds had been profitable, he discovered that using the public odds as a baseline and refining them with his algorithm was far more profitable. He regarded this as his most significant innovation, and during the 1990-91 season, he reported earnings of about $3 million.

The next year, the Hong Kong Jockey Club reached out to Benter at his office in Happy Valley. He felt a moment of apprehension, recalling a past encounter with a Las Vegas pit boss. However, instead of a threat, a Jockey Club representative told him, “You are one of our best customers. How can we support you?” Unlike casinos that sought to eliminate successful gamblers, the Jockey Club's goal was to boost betting activity to increase revenue for Hong Kong charities and the government. Benter asked if he could place his bets electronically rather than by phone. The Jockey Club agreed to set up what he referred to as the “Big CIT” (customer input terminal). He connected his computers directly to the terminal, enhancing his betting capabilities significantly.

Risks working abroad

Benter maintained a more subdued presence. Often, he could be found sitting quietly at the end of a bar, engaged in low-key conversations. Over time, a mystique developed around him. Among the small group of insiders aware that software had dominated Happy Valley—perhaps a dozen individuals—Benter was recognised as the unrivalled expert. Even Woods, in a later interview with an Australian journalist, acknowledged that Benter’s model was superior. However, the two men could never reconcile their differences. When Benter encountered his former partner in Wan Chai, he would offer a polite smile and then walk away. They had gone a decade without speaking.

In 1997, a sense of foreboding hung over Hong Kong. After 156 years of colonial rule, Britain was scheduled to return the territory to China on July 1. News reports of Chinese troops massing at the border stirred fears among islanders that Hong Kong’s freewheeling capitalism might come to an end. China sought to reassure residents that their cherished traditions would be preserved. “Horse racing will continue, and the dancing parties will go on,” said Deng Xiaoping, the former Communist Party leader.

Benter had a unique and pressing concern. A month before the handover, his team won an enormous Triple Trio jackpot. They were experiencing a remarkable winning season, with gains exceeding $50 million. Typically, the Jockey Club showcased Triple Trio winners on TV, highlighting how an ordinary bet had transformed someone’s life. This time, however, no one wanted to disclose that the winner was an American algorithm.

The club began to view the syndicates’ success as problematic. While their actions were not illegal, in a parimutuel betting system, every dollar they won was a dollar lost by another bettor. If the regular patrons at Happy Valley and Sha Tin discovered that foreign computer experts were extracting millions from the pools, they might cease participating altogether.

Benter's Big CIT privileges were revoked. On June 14, one of his phone operators called the Telebet line and was informed, "Your account has been suspended." Woods faced a similar block. Club officials issued a statement explaining that the action was taken to "protect the interests of the general betting public." As he did every summer, Benter flew back to Las Vegas to contemplate his next steps. He carefully reviewed the club’s statement. While phone betting was no longer an option, there was no mention of an outright ban on all betting. An idea began to form, reminiscent of his low-profile blackjack days.

Woods, on the other hand, sent his girlfriends directly to the racetrack with bags full of cash.

One Friday evening that autumn, after the territory had been handed over to China, Benter booked a hotel room in Hong Kong’s bayside North Point district. He ensured it was on the ground floor for easy access. He had assistants bring in laptops, a 50-pound printer, and stacks of blank betting slips. On Saturday morning—race day—they checked the internet connection and hung a “Do Not Disturb” sign on the door.

At 1:45 p.m., 15 minutes before the first race, the laptops received betting lines from Benter’s Happy Valley office. The printer began churning out tickets, marking the relevant betting boxes.

With eight minutes to the starting gun, Benter grabbed a stack of about 80 printed tickets and a club-issued credit voucher worth HK$1 million, then dashed out the door. Across from the hotel was an off-track betting shop. Inside, it was noisy and smoky, but he found an available automated betting terminal. With two minutes remaining, he fed in tickets one after another until the screen displayed: “Betting closed.”

Benter hurried back to the hotel to see the results. At 2:15 p.m., the laptops downloaded the next set of bets from the office. It was time to repeat the process. Meanwhile, other teams hired by Benter were doing the same in different parts of Hong Kong.

Bill Benter’s mathematical model. Source: Medium
Bill Benter’s mathematical model. Source: Medium

Working in Shadows 

Benter's workaround for the phone ban was labour-intensive and required managing teams of runners, who faced the risk of being robbed. However, it was nearly as profitable as his previous system. The club continued to exchange his cash vouchers for checks without interference. Woods adapted by having his numerous Philippine girlfriends take cash directly to the racetrack.

Publicity is a curse for professional gamblers. That fall, Moore's increasingly erratic behaviour drew unwanted attention to algorithmic betting. He bragged to the local press, earning the nickname "God of Horses," and later tragically overdosed on sleeping pills.

Following this, Hong Kong’s tax authority began investigating the Woods syndicate. While gambling winnings were legally tax-exempt, company profits were not. The investigation centred on whether the syndicates had crossed the line from traditional betting to operating like corporations. If the Inland Revenue Department decided to retroactively tax their profits, the consequences would be severe. When agents requested a list of Woods’ investors, he fled to the Philippines.

Benter continued his in-person betting operation into the new millennium, with his model expanding to monitor over 120 factors per horse. However, the logistics were becoming increasingly burdensome. He felt distanced from his gambling friends in Wan Chai—a night-time group of geeks and rogues. He started socialising with a more professional crowd, adopting their attire of smart suits and ties and became more active in the local Rotary Club chapter. Embracing the motto “Service Above Self,” he donated millions anonymously and visited impoverished schools in China and refugee camps in Pakistan. For the first time, he seriously considered quitting and returning to the U.S. If it all had to end, he thought, he had enjoyed an incredible run.

In November 2001, he decided to make one final bet on the Triple Trio. Since 1997, Benter had avoided major prizes to avoid angering the Jockey Club’s management, but this jackpot was too tempting to pass up. Betting on it was a bit of a whim, albeit an expensive one: He spent HK$1.6 million on 51,000 combinations. If he won, he planned to leave the tickets unclaimed, knowing that club policy would direct the money to a charitable trust.

After Bobo Duck, Mascot Treasure, and Frat Rat crossed the finish line, and weeks passed with no one claiming the prize, Benter was taken aback by the growing public fascination. "The ghost of the unclaimed $118 million Triple Trio," wrote a racing columnist for the South China Morning Post, "is still lingering like an unwelcome poltergeist." Wild theories spread throughout Hong Kong, including one suggesting that the winner had watched the final leg and died of shock.

Eventually, Benter sent an anonymous letter to the Jockey Club’s directors explaining his actions. However, the club never made the letter public. Samantha Sui, a club spokeswoman, told Bloomberg Businessweek, "We cannot disclose or comment on matters related to specific customers due to privacy and confidentiality concerns." At the time, Henry Chan, the head of betting, told the Morning Post that there was no way to identify the ticket holder. "Although this is unfortunate for one winner," he said, "it means there will be many winners through the charities."

Later in 2001, without any prior notice, Jockey Club officials lifted the phone betting ban. It seemed as though Benter's act had appeased the gambling gods. The club also responded to public demand by allowing customers to place bets over the internet from their homes. Benter decided to relocate back to Pittsburgh, where he continued betting. He had no desire to spend his entire life in Hong Kong.

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