John Tuohy, aka The Gambler, recently posted an old article from Cigar Aficionado magazine, which was written by Michael Kaplan back in 2004, shortly after I joined Betfair. I hadn’t seen this article before, and it was a good read. Towards the end of the article, the author talks about the “new class of professional gambler” that Betfair created.
The “old class” was typified by John, who “had always been a run-of-the-mill punter, game to bet on just about anything”, while the “new class” was represented by a young Glen Alcoe, described as a “supersharp advantage player”, and perhaps less flatteringly as a “nerdy-looking guy with a PhD in mathematics”. Glen Alcoe, we are told, makes his money “by finding opportunities that other people overlook.”
The “old class” was typified by John, who “had always been a run-of-the-mill punter, game to bet on just about anything”, while the “new class” was represented by a young Glen Alcoe, described as a “supersharp advantage player”, and perhaps less flatteringly as a “nerdy-looking guy with a PhD in mathematics”. Glen Alcoe, we are told, makes his money “by finding opportunities that other people overlook.”
In other words, by finding value. An edge. Call it what you will.
Betfair’s problem, it seems to me, is that they are attractive to this new class of gambler, and the word ‘gambler’ here is really a misnomer. “Value investor” would be more accurate. By definition, these people will be overall winners, and if they should ever find that their edge no longer exists, and can’t find a way to adapt and make a profit, they will simply walk away. They are not gamblers in it for the thrill of the action. They are ‘nerds’ in it to make money.
People joining Betfair are either gamblers or nerds. (I’m including among their number arbers and insiders).
Gamblers will lose, perhaps a little more slowly than in the high street, but lose they surely will. Will they keep pouring money in to fund their thrill for action? Possibly, although as I have written before, being able to see their indisputable P&L might be enough to put some of these people off.
So Betfair becomes populated by nerds and a few gamblers, and as Andrew Black is quoted as saying “If somebody's smart and he works hard, he will win money on Betfair. However, there are a lot of very clever people out here, and it's not easy. But why should it be? This is survival of the fittest."
How very true.
Cheers Robert.
ReplyDeleteI will try and email you a copy of the the full article one day, which is a bit longer.
It has one or two more amusing bits.
I am a bit busy at moment, so cannot chat long.
But to give you a clue, have you ever heard of a "sports tader/gambler" called "Glen Alcoe"
No, but then I can't say I know any names other than mine and yours!
ReplyDeleteSuspect BOY never existed.
ReplyDeleteWill tell more later.
I suspect you're wrong... not to ruin the story, but there really IS a Glen Alcoe who is involved with horse racing. He took part in the 2005 All Party Parliamentary Betting and Gaming Group inquiry into inside information and laying horses to lose. It’s an unusual name, so if I were a betting man, I would put money on him being the same guy. Incidentally, if you actually read that report, no one without inside information, and with an ounce of common sense, would ever bet on horses again.
ReplyDeletetest.
ReplyDeleteCheers Robert.
ReplyDeleteDo you have any internet links/articles as I am fascinated by "Glen Alco".
Many Thanks.
The Gambler.
Your fascination may not be healthy! He's listed in here as a contributor to the inquiry.
ReplyDeletehttp://punters-paradise.com/forums/archive/index.php?t-2323.html