How an American gambler unlocked the secret to Hong Kong horse racing, winning almost US$1 billion
In the 1980s and 90s, computer nerd Bill Benter did the impossible: he wrote an algorithm that beat the unpredictability of the racetrack, winning big in the process
Horse racing is something like a religion in Hong Kong. Its citizens are keener gamblers than any other people on Earth. Their cathedral is Happy Valley Racecourse, its grassy oval track and floodlit stands ringed at night by one of the sport’s grandest views: neon skyscrapers, neat stacks of high-rises and a constellation of illuminated windows.
On the evening of November 6, 2001, all of Hong Kong was talking about the biggest jackpot the city had ever seen: at least HK$100 million (then about US$13 million) for the winner of a single bet called the Triple Trio. The wager requires a gambler to predict the top three horses, in any order, in three races. More than 10 million combinations are possible. When no one picks correctly, the prize money rolls over to the next set of races.
That balmy November night, the pot had gone unclaimed six times over. Hundreds of thousands of people placed a bet.
At Happy Valley, young women in beer tents passed foamy pitchers to laughing expats while the local Chinese, for whom gambling is a more serious affair, clutched racing newspapers and leaned over the running rails. As the gates crashed open, the announcer’s voice rang out over loudspeakers: “Last leg of the Triple Trio,” he shouted in Australian-accented English, “and away they go!”
As the pack thundered around the final bend, two horses muscled ahead. “It’s Mascot Treasure a length in front, but Bobo Duck is gunning him down,” said the commentator, voice rising. “Bobo Duck in front. Mascot fighting back.” The crowd roared as the riders raced across the finish line. Bobo Duck edged Mascot Treasure, and Frat Rat came in third.
Across the road from Happy Valley, 27 floors up, two Americans sat in a plush office, ignoring a live feed of the action that played mutely on a television screen. The only sound was the hum of a dozen computers. Bill Benter and an associate named Paul Coladonato had their eyes fixed on a bank of three monitors, which displayed a matrix of bets their algorithm had made on the race, some 51,381 in all.
Benter and Coladonato watched as a software script filtered out the losing bets, one at a time, until there were 36 lines left on the screens. Thirty-five of their bets had correctly called the finishers in two of the races, qualifying for a consolation prize. One wager had correctly predicted all nine horses.
“F***,” Benter said. “We hit it.”
