Revisiting the algorithm that changed horse race betting (2023)

The remarkable story of Bill Benter and how he amassed a staggering $1B fortune betting on horses in Hong Kong has been extensively documented in the article, The Gambler Who Cracked the Horse-Racing Code. In 1994, Benter published an academic paper titled Computer Based Horse Race Handicapping and Wagering Systems: A Report. In it, he documents the implementation of a successful horse race betting model, which by virtue of it being published, likely meant that the model was outdated and superceded by more sophisticated models. Despite this, the paper remains an insightful read, offering a rare glimpse into the lucrative application of mathematics to an unconventional field, made even more interesting by the substantial hardware and software limitations of the time. In this post, we present an annotated version of the paper with added code blocks and blockquoted comments. The main text is all from the paper itself. Instead of building the fundamental and combined models, we’ll be highl ... Read full article.