Betting on a high-stakes life

William Walter, who rose from a tumultuous past of poverty, addiction and gambling to become a multi-millionaire, could, at best, be a statistical anomaly

Gambler: Secrets From a Life at Risk 

Authors: Billy Walters with Armen Keteyian

Publisher: Simon & Schuster

Pages: 384

Price: Rs 899

William T “Billy” Walters is a legend in certain circles. The 77-year-old is reckoned to have a net worth of upwards of $500 million and maybe several multiples of that. He has been a successful equity investor, and a developer of golf courses and used-car dealerships.

But the bulk of his fortune comes from sports betting, which he turned into an art-form. Gambler is the story of an utterly incredible life. The barebones details are as follows. Mr Walters’ father died when he was 18 months old. His mother was a teenaged alcoholic who went “walkabout”, dumping him on his maternal grandmother. He was raised in semi-rural Kentucky by this matriarch, under circumstances of extreme poverty.

Aged nine, he mowed lawns to earn pocket-money and hustled locals at the billiards table (“pool” in US jargon) to parlay those paltry earnings into something more substantial. By the time he hit high school, he was married, with a child, and he had lost most of his teeth to malnutrition and poor hygiene.

As a highschooler, he discovered a talent for selling used cars. He also honed his obsessive interest in wagering, into a life skill. It didn’t matter if it was poker, blackjack, dice, horses, sports betting, politics or random events; Mr Walters could amass and analyse relevant information to figure out the odds. He made a few fortunes and also lost everything he possessed on several occasions.

By his mid-20s, he had divorced and remarried, with three children to support from two marriages. He was a chain-smoker, an alcoholic (“a mean drunk” by his own admission), and a gambling addict. He would regularly get into brawls, and often edged barely clear of the law because much of the gambling was illegal and he spent his time hanging out with violent criminals.

After a second divorce, he remarried. The third marriage has lasted nearly 50 years. He had a sequence of epiphanies, which led to quitting alcohol and tobacco “cold turkey” in his early 40s. He discovered another passion in his 20s — golf — and worked at it with the same enthusiasm he continues to devote to gambling. He learned about the magic of computerised number-crunching after he shifted to Las Vegas, Nevada. Apart from the natural attraction of the casinos, Nevada was one of the few American states that allowed legal betting on sporting events at the time.

Mr Walters was part of a syndicate of pioneering computer users, who used silicon to gauge the odds on sporting contests. They won often enough to clear very substantial sums. His sports betting has expanded to the point where he bets eight figures every weekend across American football, baseball, golf, tennis and basketball.

Forty years ago, sports betting had complex dynamics (it still does but online has made a difference). All the bets were in cash, and as Mr Walters’ reputation grew, bookies became wary about taking his wagers. Apart from hiring (and collaborating with) maths mavens and working on sports betting models, he also discovered he had a genius for “covert” logistics.

He hired “mules”, hundreds of individuals apparently unconnected to him, to place bets. He created overseas shell companies to access European sports betting since the taxes and legalities were more favourable than in the US. He created teams to analyse various sports, and synthesised the information flows and wagering patterns. He claims (some of this is independently verifiable) he has been a winner, and a very big winner at that, for 35 of the last 36 years.  He’s also been a big successful investor in stocks by studying and emulating his friend Carl Icahn.

Mr Walters has been investigated umpteen times by law enforcement agencies. But he’s been careful to ensure his betting stayed within the bounds of legality. He’s never been convicted for a gambling-related offence despite being indicted multiple times and despite the Federal Bureau of Investigation accumulating a 22,000-page dossier on him.

But he has served time for insider-trading stocks. He claims he was railroaded by Manhattan prosecutor Preet Bharara (who was also responsible for putting Rajat Gupta in jail) and betrayed by his sometime-friend, golf legend, Phil “Lefty” Mickelson. Since emerging from prison as a 74-year-old, he’s also been a big advocate for prison  reform and convict rehabilitation.

Mr Walters shares his thoughts on sports betting in two chapters centred on American football. I had to take a crash course (thank you Wikipedia!) on the rules before some of the specifics started to make sense. But the focus on quantified meticulous research into relevant variables, careful money management, and the search for “value” (finding bets with the best odds) are applicable to all types of wagers, including equity or derivatives trading.

Mr Walters faced the tragedy of his daughter dying by her own hand while he was in prison. One of his sons survived a brain tumour only with irreparable damage that left him with the cognitive skills of a sixth grader. He’s donated enormous sums to several charities working in these areas. He still studies the mechanics of wagering obsessively and says he intends to continue to work until the day he dies.

This is a very unusual rags-to-riches story. Mr Walters has transcended poverty, lack of education, alcohol abuse, and gambling addiction to become a multi-millionaire. He’s one of a kind, the sort of statistical anomaly who turns moral science lessons upside-down.