When you think of the great computer-based punters of the world, there are three names that come to mind.
Bill Benter, famed American gambler.
Zeljko Ranogajec the legendary and mysterious Aussie gambling legend.
And Alan Woods. One time partner of Bill Benter who went on to win hundreds of millions of dollars on the massive Hong Kong racing scene while never setting foot at either track.
Alan Woods was born in 1945 in Murwillumbah, New South Wales not far from the Queensland border. Woods was blessed with an incredible mathematical mind and after high school went on to do actuarial studies at University. Although his results were off the scale in terms of his mathematical prowess, he ultimately got kicked out of school as he rarely bothered to attend classes. As it turns out Woods did eventually end up working as an actuary and it was there that he got introduced to the prospect of beating the house.
Actuary Turned Blackjack Wizard
At the time Woods was working for a consultancy firm who had been hired to calculate the house odds on all the games at the new Wrest Point Casino in Tasmania. Alan saw first- hand that blackjack with the current rules had an edge favouring the house and believed that it couldn’t be beaten. It wasn’t until he discussed his thoughts with some fellow bridge players that he discovered he was in fact wrong. If you calculated the ratio of high to low cards you could determine when you had an edge and bet accordingly. High cards such as Aces and Tens, have more value and slant the odds in the favour of the player.
Over the next decade, Woods moved from casual punter to serious professional blackjack player. When his first marriage broke down (due in part to his gambling), he started to raise the stakes and began travelling extensively. He lived out of a suitcase for a number of years and played in numerous blackjack teams across the globe. Eventually, Woods decided he was tired of the travel and constantly running from the casinos that he decided to move into another passion. Horse racing.
King of Hong Kong
It was around that time that he met Bill Benter in Las Vegas and the two set about developing a system that could predict the outcome of a horse race. Benter, Woods and a third member focused their attention on Hong Kong. In Hong Kong, there are only two race tracks and they have a small number of horses. And best of all racing is the only gambling allowed in the incredibly wealthy city which means the betting pools are huge.
The team’s early efforts were largely a failure and after two years the system of betting on favourites ended up losing the entire $150,000 starting bank. However, by the third year, they had managed to work out the kinks and the system made a US$100,000 profit. Ultimately each of the men in the team had their own ideas about how they should be betting and developing their model so they broke up and went their own way. Bill Benter went on to create a computer model of his own which was ultimately even more successful than Woods.
In the 1987-88 racing season, the first at the helm of his own betting strategy Woods won HK$3 million (AUD$500,000). Three years later he was making HK$17 million (AUD$2,800,000). From that point on his success continued to skyrocket. Over the course of his betting in Hong Kong, he continued to have a rivalry with Bill Benter, which ultimately drove them both to even greater heights.
Wood’s betting system focused on the use of statistics on a range of different factors. He used a database that he created from scratch to determine the correct weightings of factors that lead to a horse winning a race. That could be things like the amount of races, winning percentage, weather and track conditions and over time it included subjective form factors and video analysis.
Stock Market Punts
As his wealth grew, so did the size of his bets. In 1987, it was rumoured that Woods bet $1 million against (known as shorting) the Hong Kong stock market. He attempted the same thing on the Japanese stock market. Years later he tried to bet against the dot-com boom and ultimately ended up losing $100 million. If he had taken the same position only a few months later he would have made billions of dollars.
As his wealth skyrocketed, Woods was known for throwing huge parties and living the life of a playboy. Ironically he rarely left his apartment and virtually never set foot on the race track. When there were hundreds crammed into his parties, he would often sit in his room alone.
The Taxman Knocks
It has been suggested that his net worth was upward of $500 million dollars. In recent years the Australian Tax Office has been attempting to claw back some of his winnings suggesting that he owed taxes in a similar fashion to Zeljko Ranogajec and David Walsh. However, Woods never hired staff and as such was never considered to have run a business.
Alan Woods passed away in Hong Kong in 2008 after a short battle with cancer. He was 62 years old and will be remembered as one of the greatest gamblers in history.