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No betting operation bad ever controlled the market on such a synchronized and national level, but Billy Walters admits, he didn't always have his way so easily. "There were other times I bet $130,000 or $140,000 just to move the line," he says in his low Kentucky drawl."One thing about the public, they'll follow anybody as long as you're picking winners,"
The last sentence of the quote above, probably gives the most insight into the mind of your average punter . |
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If any of you lads are interested I've coped and pasted a link to a You Tube clip featuring Billy Walters
http://www.youtube.com/watch?v=NHVvfRaIqOg StevieB |
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* copied even
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good link that Stevie.......and in fact it led me to look at the one below.....it got very interesting at around the 30 minute mark.
http://www.youtube.com/watch?v=BLH8yCY7Ais |
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Good call Joshua Tree.I'm not really into American Sports but the psychology is the same the world over and some of the insights Dr Bob gave in particular were fascinating.
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Go on then I'll put him in, though not strictly a gambler with his use of rebates he's obviously beaten the odds in style one way or another although it's been to the detriment of other casual punters.
Zeljko Ranogajec: While the winnings of wagering on racing have traditionally not been regarded as taxable, there comes a point where even the tax man feels compelled to seek his cut of the proceeds. And it appears that Zeljko Ranogajec has surpassed that point to a degree that the authorities are seeking to make the distinction between gambling as a hobby and gambling as a business. The Taxation Office has investigated Zeljko several times over the past 25 years, each time ruling that his activities did not fall into the category of being a business. Zeljko Ranogajec Professional Gambler The Australian Taxation Office recently conducted another audit of Zeljko Ranogajec. The outcome, announced in October of this year, 2012, seems to contradict years of legal precedent that gambling winnings are not assessable as taxable income. The ATO seems to have taken the approach that since Ranogajec heads a syndicate of gamblers that he is indeed carrying on a business. The end result, one that is likely to hold the interests of solicitors and courts for years to come, is that Zeljko Ranogajec, perhaps in the interest of putting the matter behind him, has agreed to surrender an amount reported to be nearly $700 million over the course of 12 months. That works out to just under $60 million per month, a figure that would stagger just about any business in the country, but in Ranogajec's case appears to be an instance of cutting one's losses short. It would seem the Zeljko Ranogajec was ultimately the victim of the worldwide economic crisis that has compelled revenue starved governments to actively disregard historical precedent and tax racing winnings retrospectively. Some commentators have compared the incident to the witch hunt conducted against software giant Microsoft, whose main crime seems to have been the failure to make appropriate campaign contributions. Nothing breeds envy like success. In fairness to the tax man, it would certainly appear to the moderately objective person that Zeljko Ranogajec and his cohorts did everything in their power to disguise a truly well and highly organized endeavour to make it appear completely casual. The syndicate headed by Zeljko Ranogajec uses sophisticated gambling software to seek maximum profit. It also employs hundreds of people in three different companies based on advice it received that personally operating the gambling software in question would lead taxation authorities to conclude that there was no question that a business venture was involved. A safe conclusion to be reached here would be that as times change and technology evolves, so must the interpretation of what is a business and what is a hobby. While alarmists may raise the cry that the taxation office settlement, reached via court-ordered arbitration, raises the specter of retroactive taxation on anyone who has ever had a winning punt, the reality would seem that the ATO is only interested in the extremely large players, those who it seems have turned the wagering game into a science-for-profit endeavour. Zeljko Ranogajec himself is a quite interesting character. Born in Tasmania of Croatian immigrant parents, Zeljko is reclusive in the extreme. He is never seen at tracks or in casinos. He defies the image created by flamboyant predecessors that carried colorful nick names such as Prince of Punters, Filipino Fireball, The Fireman, Fast Eddie or Hollywood. Instead, he has earned the nick name Lock Ness Monster because no one is certain that he has ever been seen. He has never been interviewed and goes to great lengths to zealously guard his privacy and that of his family and associates. This has worked to his advantage in that where racing is concerned there can be no accusations of any sort of tampering whatsoever. This would also seem to be true of his betting interests in sports, lotteries and the stock market. It would seem a wise policy with which to adhere given the enormity of his involvement. Various estimates place his total annual participation at anywhere from $1-3 billion. It is said that Zeljko Ranogajec bets on every thoroughbred race in Australia. It seems that his preferred tactic emulates that of another low-key punter of an earlier era, Fred Angles. Instead of relying on a bank of phones in his home to line up wagers in the last five minutes before a race, however, Ranogajec uses modern computer technology to queue up hundreds of bets in the TAB system, placing those bets in the final seconds before a race. The end result is identical: opportunistic bettors cannot ride his coat tails and bookies seldom have the opportunity to take advantage of the tumbling odds that Zeljko Ranogajec's huge wagers engender. He combines relatively safe win and place bets earning small payoffs with big winnings for picking trifectas and other exotics. Zeljko Ranogajec wagers alone are purported to account for over 30 percent of Betfair's southern hemisphere operations. Also like Fred Angles, he approaches betting with the same attention to detail, even those that seem insignificant. It is said that the paper file of his activities for just one Melbourne Cup was over an inch thick. Perhaps so, but this fanatical attention to detail availed him not when he decided to lay Makybe Diva in the 2005 Cup. His exhaustive preparations did not account for the VRC watering the track in order to placate trainer Lee Freedman, who had threatened to scratch Diva if the track was not softened. This just proves Ranogajec is human. Zeljko Ranogajec has taken the art form of gambling and raised it to a higher level. His annual outlay surpasses the GDP of some third-world countries. His approach of maintaining a low profile in order to keep the odds where he needs them to be in order to produce profits, combined with a willingness to wager on any event, even those on remote country tracks, has supplied him with a winning formula that amassed a fortune for him, a fortune that it seems, however, to have unfortunately attracted the attention of the ATO. It seems like only a question of time before other tax authorities join the queue to get their share of the pie. |
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As ZR etc was getting "rebates" from TOTE operations, then this would clearly lay him/others open to being deemed more of a "business2 than a punter!
Check this out.... The gambler PUBLISHED: 11 Feb 2012 00:04:00 | UPDATED: 13 Feb 2012 10:28:17 Share Links: email inShare submit submit to reddit print -font +font Reprints & permissions Angus Grigg and Hannah Low Illustration Karl Hilzinger A rare photo of Zeljko Ranogajec, published in The Australian. David Walsh Photo Louise Kennerley It was hardly a difficult question, nor one that invited clarification. But when one of Australia’s most secretive men was asked to state his name at the Federal Magistrates Court in Sydney there was a moment of confusion. IN DEPTH The Financial Review’s ‘Gambler’ series: The inside story on the secretive Australian gambling syndicate that turned over billions Part 5: Money magic makes billions disappear Part 4:How ex-wives’ club nailed David Walsh Part 3: No humbling a great gambler Part 2: The gambler Part 1: How Alan Woods beat the odds “My name is John Wilson … and I am an investor,” he told the court. That was not, as it emerged, the only name he answers to. After prompting from counsel, the witness confirmed he was also known as Zeljko Ranogajec. It’s a name few would recognise, even though Ranogajec would count as one of the world’s biggest gamblers. His vast wealth and incredible power has been achieved in an arena beloved by Australians – horse racing – but he has never given an interview, has rarely been photographed and many of his long-time employees have not even met him. To racing insiders, however, the man known simply as “Z” is an almost mythical figure – loathed and admired in equal parts. Born in Hobart, this 50-year-old son of Croatian immigrants controls an empire that wagers an astonishing $1 billion on racing each year. Yet the closest thing to a public profile for Ranogajec comes via his old friend and fellow gambler, Tasmanian art collector David Walsh, who built the ambitious Museum of Old and New Art outside Hobart. The pair have prospered since their university days, but recently Ranogajec’s gambling empire has come under threat. The Australian Taxation Office is known to be once again looking into Ranogajec’s affairs and he told associates last year that it is demanding about $900 million for 10 years of back taxes, penalties and interest. Ranogajec, who is thought to have relocated to London, is not available for comment. And just as the ATO is giving him a good looking over, so too are everyday punters and racing professionals, who are beginning to grasp the sheer scale of the incentives given to his betting syndicate by TABs across Australia. These incentives, not available to ordinary punters, almost brought down Tote Tasmania last year and threaten to undermine how the racing industry is funded. The story of how Ranogajec built a system that has ended up in controversy and litigation starts in the United States, where his business became so large it attracted the attention of regulators and attorneys working for former New York governor Eliott Spitzer. They had grave concerns about how syndicates such as his work. Despite this industry-wide notoriety, up until now little has been known about how Ranogajec operates. But previously unseen court files, obtained by the Weekend Financial Review, provide a window into this normally opaque world and to what Walsh has described as a “money mine”. Ironically, the assiduously private Ranogajec outed himself when he brought a commercial dispute to court in 2008. His legal action, designed to claw back $2.5 million from his former bookmaker Karl O’Farrell, meant the court ended up hearing the gritty details of how his gambling operation worked. It offered a close-up of the deals that delivered his fortune. And it was all on the public record. What could have possessed Ranogajec to expose himself will never be known but it is inexplicable given what he previously told O’Farrell. “We like to keep our dealings secretive. Nothing in writing,” Ranogajec told O’Farrell, according to his written evidence filed in the Federal Magistrates Court in Sydney. In the course of the case, which was not reported at the time, the court heard how Ranogajec had convinced totes around the world to provide him with giant rebates or subsidies in return for his betting dollar. These deals enabled Ranogajec to win even when he picked the wrong horse. That was a revelation to federal magistrate Rolf Driver, who heard the case. “Surprisingly, the syndicate apparently makes most of its money by placing losing bets,” he said. Ranogajec expanded on this during his evidence to the court. He was talking about racing in the US but it’s a model he has used successfully the world over. “You bet to lose, so that you actually turn over more money and the win comes from the rebates,” he told the court. “So we may not necessarily have won. I don’t know off the top of my head whether we won [excluding rebates] or not.” Whatever the outcome, it was certainly lucrative. From an outlay of just $200,000, Ranogajec confirmed to the court that his syndicate had earned $44 million from betting on US races over a 3½-year period. In addition, he claimed to be owed a further $8.5 million in rebates from O’Farrell’s bookmaking company Capital Play, which was licensed to take bets on US races. That would have taken the syndicate’s earnings to about $52 million over that period. This is surely successful punting, yet in the US, Ranogajec’s system was based on rebates, not picking winners. To understand rebates and how it’s possible to win from losing, the mechanics of pari-mutuel betting needs to be explained. It is standard practice for totes around the world to take out between 15 per cent and 20 per cent of all money wagered. Due to this “take out” it is considered almost impossible for the average gambler to come out in front over any length of time. But Ranogajec is not your average gambler. Due to his sheer size he has persuaded the totes to pay him “rebates” or “loyalty payments”. In the US, the syndicate received an average rebate of 13 per cent on all losing bets, according to court documents. From there the maths is pretty simple, as Ranogajec told the court. “If you bet $100 and lost $5, but you get a 10 per cent rebate, you still make 5 per cent,” he said. That means the more money you can turn over, the more money that comes back to you in rebates. And so it becomes a matter of ensuring that any losses are less than the amount rebated. The court documents show that just 15 per cent of what the syndicate earned from US racing over that 3½-year period was from selecting the right horses. Their winnings on a correct punt were just $8 million – a figure dwarfed by the $44 million earned from losing bets with rebates attached. It was a perfect system that only came unstuck when O’Farrell allegedly refused to pass on all the rebates the syndicate felt it was owed by Capital Play. In response, Ranogajec called in a $2.5 million loan advanced to O’Farrell, who was eventually bankrupted by the court. In his effort to get his money back from O’Farrell, it became clear that Ranogajec was very keen to impress on the court that his syndicate was “not a business”. In his words, it was a “punters club” or just a “collection of individuals” who came together to bet. This modest description does no justice to the scale of his enterprise. The syndicate employs about 300 people at its offices in Hobart and Sydney and it runs a global gambling operation that places bets on races in Japan, Hong Kong, England, Australia and the US. The betting system relies on computer models driven by complex algorithms that place thousands of bets, worth millions of dollars, in the final minutes before the horses jump. In Australia the syndicate is known to win in its own right, while in the US the operation relied on rebates. But during his legal battle with O’Farrell, it became clear that the paying of rebates was something of a legal grey area in the US. While not unlawful, they were prohibited by some state racing authorities. Regulators had been concerned for some time about the probity of so-called rebate shops such as O’Farrell’s Capital Play and the type of clients they attracted. In fact, Ranogajec and Capital Play were one and the same, as his syndicate was its only customer and financial backer. “Rebate shops have for some time been associated with illegal activities such as race fixing, money laundering and tax evasion,” said a 2008 report commissioned on the industry by former New York governor Eliot Spitzer said. The report mentioned Capital Play extensively but made no specific allegations against the company. It also named Ranogajec and his wife, Shelley Wilson, as being associated with Capital Play and claimed regulators in the ACT, where Capital Play was based, paid the couple little attention. “The screening of individual betters, in particular with respect to the nature of their businesses, backgrounds, and sources of funds, is limited,” the report said. Eventually, the New York Racing Association cut off Capital Play’s access to betting pools at the Aqueduct, Belmont Park and Saratoga racetracks. Keeneland Race Course in Kentucky soon took the same action. No specific reason was given but, despite persistent protests from Capital Play, its access was never restored. O’Farrell said that the termination was “without merit” and was “driven by the New York Racing Association’s attempt to remediate its own serious integrity problems.” That failed to sway the regulators and the report to Spitzer said there were “serious risks associated with rebate shops”. “By betting consistently on races where the risk of loss is known to be relatively slight, money can easily be laundered,” the report said. With no access to the major US racetracks, that was the end for Capital Play. But just as regulators in the US were raising concerns about how the likes of Ranogajec operated, he was being welcomed warmly by TABs in Australia. Ranogajec’s home state of Tasmania was the most aggressive enthusiast. From 2007 onwards the government-owned TOTE Tasmania (TT) began reporting impressive growth in its wagering business. Over the next four years its pari-mutuel turnover would nearly triple to an impressive $937 million in 2011. But the spike in revenue turned out to be profitless growth. Despite nearly $1 billion in turnover, TOTE Tasmania could manage just $1.5 million in profit last year. This gap between turnover and profit was due to aggressive rebating to the likes of Ranogajec. His syndicate did not actually bankrupt TT, but it made it unprofitable. That lack of profitability may have explained the sudden sale of TT in December for $103 million, despite public assurances from the Tasmanian government just three months earlier that it had no intention of selling the business. Tatts Group, which operates the tote in Queensland, South Australia and the Northern Territory, was the buyer and its chief executive, Dick McIlwain, was scathing of TT’s strategy. “They gave all the profits away,” he says. “They [TT] rebated the backside out of the business until there was nothing left.” A recent Macquarie Equities report estimated that TT was paying an average rebate of 10.5 per cent to punters such as Ranogajec. That’s aggressive in the extreme, given TT takes out only 14.8 per cent from win and place bets and 20 per cent on so-called exotics such as trifectas. But while TT was floundering, syndicates such as Ranogajec’s were doing very nicely. Calculations provided to the Weekend Financial Review by someone with intimate knowledge of the TT business estimated the tote paid out $45 million in rebates last financial year. “Most of that would have been to Zeljko [Ranogajec],” said the source. But his syndicate appears to have been living off more than rebates. A line item in the latest TT annual report showed that Tasmanian punters, or perhaps one in particular, was highly successful. TT reported that $69.1 million had been booked in “settlements from other TABs”. Once again, it’s thought Ranogajec’s syndicate would have reaped a good proportion of this. “These guys made money consistently, they were not just living off the rebates,” says the source with knowledge of Ranogajec’s betting patterns. Insiders say TT began by offering rebates of about 2.5 per cent in 2007, but the more money bet by the syndicates, the more they demanded in rebates. “It became a race to the bottom,” according to McIlwain. By June 30 last year it was clear that TT had all but destroyed its own business, by offering increasingly larger rebates to the likes of Ranogajec. The nature of racing is also such that not everyone can win – it’s a zero sum gain. In fact, the more Ranogajec won, the less was left for other punters. This is McIlwain’s main gripe. “They are giving money back in rebates to punters so they can screw over the betting pools,” he says. “The ordinary punter is subsidising these guys.” The result has been a devastating one for the weekend gambler. The sheer weight of money from Ranogajec, facilitated by rebates, has flattened out the odds and means that any wins enjoyed by punters are far smaller than in years past. It should be remembered that Ranogajec bets in all states, it’s just that TT was the biggest provider of rebates. “The recreational gambler is losing their money faster,” McIlwain says. “And if you take their money away from them too quickly, then they lose interest.” Taken to its logical end, it could mean smaller betting pools and less money to fund the racing industry. That is yet to happen and McIlwain is determined to end the massive rebates offered by TT when he takes control of the business in March. But TT is not alone in providing the rebates. “Tasmania started this odyssey and it has spread like a disease,” says McIlwain. “Western Australia is now very heavily into it, although they would probably deny it.” The Tabcorp-owned NSW and Victorian TABs also provide rebates, which are thought to be between 5 per cent and 6 per cent. McIlwain says that “dimwit governments” have facilitated the “ripping off” of ordinary punters by passing legislation allowing the paying of rebates. “Tasmania was OK until others started doing it [paying rebates] – then it became a fight to the bottom,” he says. And the Tasmanian example shows that the only winners are the likes of Ranogajec and his syndicate. It’s no wonder that David Walsh described the betting system as a money mine. That appears no exaggeration, given that it funded Walsh’s $180 million Museum of Old and New Art (MONA) outside Hobart. In the introduction to his book Monanisms, released when the gallery opened last January, Walsh gave a typically oblique description of his working life: “I invent a gambling system. Make a money mine. Turns out it ain’t so great getting rich using someone else’s idea. Particularly before he had it. What to do? Better build a museum; make myself famous. That will get the chicks,” he wrote. MONA has certainly made Walsh famous but it has also put the spotlight on Ranogajec, who would prefer to have no public profile at all. That’s surely why he didn’t want to disclose his real name, even when asked in court. The Australian Financial Review Angus Grigg |
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Thanks for the tip on the book 'the smart money'
Reading it at the moment it's very good! |
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RACING had never seen anything like Terry Ramsden - his gambling really was the stuff of legend; in the end he became notorious.
For younger generations the name will hardly resonate; his comeback to the sport in the last decade flickered, rather than caught fire. A glance at some of the cuttings from around that time suggests something between a dreamer and a fruitcake. He certainly talked the talk, predicting Classic victories for promising two-year-old Jake The Snake and a Grand National for a horse called Royal Atalza. But then you remember the red-hot city slicker who shot through racing's firmament in the mid-1980s. Dealing was where it all started for Ramsden. The boy from Enfield, north London, who left school at 16 and joined a City stockbrokers as a clerk. Enquiries about Ramsden often elicit answers such as "he's the cleverest man I have met". Even a Serious Fraud Office investigator would tell Ramsden that he had an "alpha intellect". Ramsden's brain quickly told him that clerking did not pay as much as he was making for his employers, so he took his first personal punt, buying Glen International in 1984 to trade in Japanese warranties in a rising market; the company had a turnover of pounds 3.5 billion at its height. Japan was deemed too insular and unwelcoming by much of the City but Ramsden saw an opportunity to make money and, with his trademark brashness and self-belief, built a fortune reputed to be around pounds 150 million. He was listed at one stage as Britain's 57th richest individual. Ramsden lived the high life of the archetypal Thatcherite entrepreneur, splashing the cash and buying Walsall Football Club. He announced himself to the racing world with a bang. Days before the 1984 Irish 1,000 Guineas, Ramsden bought a filly called Katies. Her trainer, Mick Ryan, recalls: "He paid pounds 500,000 for her and had never seen the filly - he didn't know what colour she was!" The Midas touch held and Katies won back her price reputedly five times over with a 20-1 success at the Curragh. There followed a legendary three-day party at the then Newmarket Moat House, two without Ramsden, who called open house for all before returning in his helicopter for the official celebration party. He reportedly turned down an offer of pounds 2m for Katies in the aftermath of the Irish Guineas and was rewarded with his first Royal Ascot success in the Coronation Stakes. That was Ramsden in a nutshell. A diminutive 5ft 4in figure with trademark long hair, he had racing enthralled at his every move for five short seasons, buying, selling, sponsoring, giving to charity and betting big on his horses and those of his trainers. He was a betting shop punter writ large, placing four-figure yankees for fun beside the regular six-figure sums on his own horses. There were no shrinking violets in his stable, as the likes of Ryan, Geoff Huffer, Rod Simpson, Alan Bailey and Jenny Pitman handled a team that numbered more than 70 at its zenith. Ryan adds: "He was a bit lively! He was a flamboyant, ruthless gambler. He was one of those guys who wanted to be in the know. "He always let the owners of the other horses have first dip, mind you, but he wanted to know all the winners. But he would make his own mind up and have silly bets as well." Ramsden did not confine himself to the Flat. He added a Cheltenham Festival winner in the 1986 Coral Golden Hurdle final with Motivator. Had David Nicholson's festival jinx lasted a bit longer and Brunico caught Solar Cloud in the Triumph Hurdle the next day, Ramsden would have claimed one of the biggest paydays in racing - around pounds 6m, or a staggering pounds 15m in today's money. As it was, Ryan remembers the mayhem after Motivator justified his trainer's confidence, which had been transmitted to Ramsden. "I told him to have a good bet because I fancied it and he said he'd already backed it to win half a million. I suggested he had a go for the other half. "Some bookmakers couldn't pay him out. I remember his bodyguards carrying briefcases and stuffing all the money in." IT WOULD have been trunks had Brunico prevailed. It's well worth a look at the race on YouTube - even Sir Peter O'Sullevan could not sight the flying grey going to the last. The year 1986 was a good one for Ramsden's royal blue and white hooped colours - Jenny Pitman weighed in with a Welsh National winner in Stearsby and Ramsden bought the Grand National favourite Mr Snugfit two weeks before Aintree, ensuring he hogged the headlines in the build-up with his pounds 50,000 each-way at 8-1, which showed a small profit when the Mick Easterbytrained chaser finished fourth. Needless to say, the good times did not last. The Ramsden empire unravelled quickly. The Japanese market collapsed, and so did Glen International with debts of pounds 100m in 1987 (Ramsden would mutter darkly about the mat being pulled from under his Japanese operation with the withdrawal of a $1bn line of credit) while Ladbrokes, his deadly rival in the ring, took him to racing's Tattersalls Committee over pounds 2m of gambling debts. There was time for Not So Silly to win the Ayr Gold Cup at 12-1 in 1987 and a pounds 1m (losing) bet on a horse called Below Zero, but when Ramsden failed to keep to the terms of settlement, Ladbrokes acted again and the Jockey Club warned him off in October 1988, bringing to an end his ownership, if not his punting. Court papers later revealed Ramsden's gambling losses to have totalled a staggering pounds 58m in a three-year period; Ramsden denied the figures but would tell David Ashforth in 1999: "Even if it was pounds 30m over five or six years, so what? Those sums for a man of my capabilities are no big deal, are they?" Matters would only get worse. He fled to the US and found himself in Los Angeles prison as the Serious Fraud Office began extradition proceedings. Returning to Britain, he was declared bankrupt, with the Inland Revenue claiming pounds 21m, and in 1993 was given a two-year suspended sentence for fraud. When he breached the terms of his insolvency, including concealing pounds 77,000 he won at York's May meeting in 1992, he ended up back in prison, serving ten months of a 21-month sentence. The story might have ended there. Ramsden had lost everything, including his marriage. But in the new millennium he resurfaced in the City, pardoned by racing, and with an ironic change of silks, mourning black but with a hooped-sleeve homage to his blue and white colours. It didn't work out for Jake The Snake (a winner for new connections at the age of ten) or Royal Atalza, but Ramsden enjoyed success with hat-trick-scoring handicapper Banjo Patterson and had a largely unpublicised small share in Grey Swallow, the 2004 Irish Derby winner trained by Dermot Weld. But like a film sequel, the second show could not match the original. Ramsden's affairs were in court again in 2008 when City stockbroking firm Hoodless Brennan obtained a High Court judgement against him; he was reported to owe the company more than pounds 1m. Ramsden will be 62 next year; a third coming would appear unlikely. |
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I probably did Alan an injustice so I'll put in a larger article
Alan Woods, passed away on January 28th 2008 at the age of sixty-two. He was, without a doubt the world's most successful horse-race gambler. It was estimated that at the time of his death, he was worth over £320m ($670 million US). For twenty years, he was regarded as one of the worlds best gamblers (or punters) and was generally named as one of the three biggest bettors alive. We called him...Mister Huge.He did not see racing as a sport of horses and humans, he only saw it as a never ending string of statistics and numbers. He did not socialize with the upper crust of racing. In fact he couldn't even recognize common names of Jockeys, trainers, or important racing personalities. He would brag that he had not been to a racetrack for over twenty-five years. He was the best of the game and had little interest in the beautiful animals that make up the sport. Alan was strictly a numbers guy. Born in 1945 in Murwillumbah, New South Wales, Alan showed an early brilliance for mathematics. He was a losing punter at university and never developed gaming interest until later on. He was a mathematician and worked as an actuary in the 1970s. His job was to figure out how long you would live if you smoked two packs a day and didn't exercise. The insurance companies would then sell you insurance based on his numbers. Worlds best Gambler was a card counter... In the mid 70?s, he was intrigued by reading a copy of The Revere Point Count Strategy on blackjack card counting. This was his initiation as a serious gambler, long before he was known as the Worlds Best Gambler. For three years he undertook disguises to avoid identification as he traveled from Australia to Las Vegas, playing alone or with teams of blackjack pirates. In 1982 he was tired of the travel, fake identities, and dodging the casino bosses, the worlds best gambler headed for Hong Kong. He was successful in the world of card counting, but it was a drop in the bucket compared to what was ahead in horse racing. After investigating what the Computer Group was doing with software in sports betting, his priorities changed. With a couple of programmers, he would establish a new purpose and change the sport forever. Hong Kong is the perfect spot for professional gamblers. Racing is controlled by the not-for-profit Hong Kong Jockey Club, and is scrupulously honest. You don't want to be caught fixing races in China and have the authorities find out. Untrue results or race fixing hurts computer calculations. Hong Kong racing features huge betting pools with a limited number of horses and jockeys. He would build a database, his programmers would write a program and they would make history. Hong Kong racing is packed with multiple exotic wagering providing numerous financial opportunities for computer wizards. For twenty years, Woods would rise to the zenith of this business and become one of the world's largest horse players. His teams of computer experts and money running agents made it all work. He directed his empire them from a luxury high-rise apartment in Manila. Over the journey he had his ups and downs but it's reported that during one race day in 1995, Woods made $8 million. It was estimated that in the 2006-07 season, Woods accounted for 2% of the $71.46 billion total Hong Kong Jockey Club betting turnover. His downturn only came when he ventured outside of the Racing world. In the late 1990's, he took a $100-million stock-market hit when he attempted to short the NASDAQ index just weeks before the bubble actually burst. Had he waited sixty more days, he would have been a multi-billionaire. But it is showing how effective computers can be to the professional punters in succeeding at horse racing. Though Alan is gone, another cancer victim, his legacy will live on. We will miss you my friend, and always consider you the Worlds Best Gambler. |
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The men and women who operated the numbers game were known as bankers. The most successful bankers were known as Kings and Queens. As early as May 1924, the New York Age estimated that there were at least 30 bankers in Harlem, many of them Cuban, and many employing between 12 and 20 collectors. Huge sums could be made operating numbers, but a popular number hitting could also quickly wipe out a banker, although, notoriously, they often avoided that fate by simply refusing to pay out, or offering players reduced payouts.
The most successful bankers earned the label King or Queen. The first banker to achieve enough success to be called a numbers king was a Cuban named Marcellino, who controlled much of the gambling by Spanish-speakers. He displayed the ostentatious style that would become a hallmark of the kings and queens, driving up and down Lenox Avenue in a chauffeur-driven limousine, and living in a palace of an apartment, adorned with imported chandeliers and a baby grand piano. The most successful numbers king was almost certainly the reputed inventor of the game, Casper Holstein, a native of the Virgin Islands. He owned a fleet of cars, apartment buildings in Harlem and a home on Long Island, and acres of land in the Virgin Islands. However, unlike most kings, he did not live a flamboyant lifestyle. He was a committed member of the Monarch Lodge of the Elks, even running unsuccessfully to be the fraternal order’s national leader. He gave generously to support Marcus Garvey’s United Negro Improvement Association, and his native Virgin Islands. Holstein was also a key supporter of the Harlem Renaissance, “a great help to poor poets,” as Langston Hughes put it. He gave money to charities and loans to aspiring businessmen. One of the few ways that Holstein did not spend his money was on sports, but other kings promoted boxers and, most notably, operated baseball teams. A Cuban banker, Alex Pompez, played the most prominent role in baseball, owning a team called the New York Cubans and supporting the Negro National League, before becoming a scout for the Giants and a member of the Baseball Hall of Fame. Stephanie St Clair was the leading, and perhaps only, numbers queen. A native of Martinique who spoke with a French accent, she lived in 409 Edgecombe Avenue, an address favored by civil rights luminaries and other members of Harlem society. St Clair took the leading role in the fight against the takeover of numbers by white gangster Dutch Schultz, pushing her case in the black press as well as through violence. |
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From about 1905 to 1915, the Harlem policy racket was controlled by Peter Matthews. Matthews was convicted of illegal gambling in 1915 and died in 1916, while serving his time. This left about an eight year void, where there was no real clear cut leader to take over the now vacant position of Policy King in Harlem.
In 1923, Casper Holstein who was born in St. Croix, Danish West Indies (now the Virgin Islands) of mixed African and Danish blood, saw the opportunity to take over the policy racket in Harlem. At his peak, Casper was making $12,000 a day from this enterprise. Like many of the policy kings, he invested his money in legitimate businesses as well. He is reported to have been worth over 2 million dollars by the 1930's. Casper Holstein was not alone in the Harlem policy racket. His biggest competitor was Stephanie St. Croix, a Black French woman said to have migrated from Marseilles, France. In 1912, she invested $10,000 of her own money in a numbers parlor. Within a year she had amassed over $500,000. By this time the Mafia having taken notice, started to try to muscle in on Harlem's black policy makers. They beat, extorted from, kidnapped, and murdered some policy makers and their numbers runners. In 1928 Casper was kidnapped by five men thought to be working for Dutch Schultz. A $50,000 ransom was demanded and Casper Holstein was released after three days. Casper claimed that the ransom was never paid. Shortly thereafter, he was convicted of illegal gambling. After serving his sentence, he retired later dying in 1944. After Holstein's retirement and death, Dutch Schultz still had Stephanie St. Croix to deal with. Although he eventually got his way, it required a bloody war that took over forty lives due to gang violence. Because she had named policemen and other officials that had been paid kick backs, she was under pressure from the law as well as Schultz. Schultz did take over the Harlem policy rackets for awhile, but in 1935 he was killed by order of Lucky Luciano. Madam St. Clair as she was most often called by Harlemites, sent a telegram to Schultz's bedside saying, "As ye sow, so shall ye reap." At the time this telegram received widespread attention. Stephanie St. Clair died in 1969, just two years after New York began its state run lottery in 1967. Ted Roe Ted Roe The Bronzeville Policy Racket Bronzeville is a predominantly black area and is Chicago's south side of town. The dominant players here in the policy racket were the Jones brothers. The oldest being Ed followed by McKissak (Mack) and George. Ed owned a tailor shop and at some point decided to get into the policy racket. The Jones brothers like Casper Holstein and Stephanie St. Claire cornered the market for policy or numbers racket in Chicago. All were successful because they paid promptly and without hesitation, building a strong customer base. At their peak, the Jones brothers made between $10,000 and $15,000 a day. They funneled money into many legitimate enterprises. They had real estate holdings in Europe, Mexico, and the United States. They also had cash in twenty-five different banks and investments in some of this countries largest corporations. It is estimated that they were worth 14 million dollars. Running the whole operation for the Jones brothers was Ted Roe. He was born in Louisiana of a black mother and Italian father. After being a bootlegger in Little Rock, Arkansas for a while, he made the move to Chicago, specifically Bronzeville. The mob in Chicago just as Dutch Schultz did in Harlem, began to muscle in on the black policy makers. In fact, in 1946 they kidnapped Ed Jones and demanded $250,000 and the turning over to them of the policy making operation. Ted Roe did the negotiations on behalf of the Jones family. He paid the ransom but had no intention of handing over the policy racket. After being held hostage for three weeks, Ed Jones was finally released. At this time he made the wise decision to retire and take all of his family to Mexico to live. Ted Roe saw this as an opportunity, he took over the policy racket resisting attempts of the mob taking over. For many years he resisted and battled attempts at kidnapping and murder instigated by the mob. Some time in 1952, Ted decided to travel around openly rather than under the protection of his many body guards. One night while getting into his car, he was ambushed by at least two men both using shotguns. Ted Roe had been diagnosed with cancer and doctors had given him only three months to live. |
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loved the stories great read
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This is quite topical with Mark Read being in the news...........
BETTING on the Melbourne Cup, and we are talking about serious betting, has been part of Mark Read's genetic make-up since he was a Year 10 student at St Bede's College. Back then Read was a teenager with a head for figures and a love of the punt, two passions that would meet in spectacular fashion a decade later. That the punt would be one of his true loves was always going to be the case given his mother Mabel Read remains the biggest female punter this country has seen. With flaming red hair and always dressed to the nines, Reed struck fear into bookmakers, betting in huge cash amounts because she never trusted herself with credit betting. In 1966 Mabel's second husband, former jockey and highly respected trackman Lal Reed (they married after her first husband, bookmaker Jack Read, died) had fallen in love with a Bart Cummings-trained gelding named Galilee. On his advice, Mabel Reed decided Galilee was the way to go for the Caulfield-Melbourne Cups double and backed him to win $200,000 with Albert Smith, or around the $6 million mark in today's world. Mark Read, who became a well-known bookmaker, recalls the Galilee double with obvious glee. "Lal Reed thought Galilee was the best stayer he'd seen and he knew what he was talking about. So Mum acted on his opinion and just kept backing the horse,'' said Read, who grew up in within sight of Flemington racecourse. "When Galilee first came to Melbourne he raced in the Patrobas Welter at Caulfield. He has an unusual gait and the word went around he wasn't right so he eased considerably. Mum just kept backing him. "He won easily then won the Toorak Handicap when she backed him again. But even after that she still got 14-1 in the Caulfield Cup because Tobin Bronze was odds-on. He won again. "Most people would be satisfied with having the double going but Mum kept backing the horse. After the Caulfield Cup, Albert Smith rang, as is normally the case with bookies facing a big doubles payout, and asked did Mum want to lay some off. She laughed and said she wanted to back the horse more.'' On Mackinnon Stakes day - the story goes - the commission agent didn't get Mabel's money on, or maybe he knew the Alcimedes gelding's grand final wasn't that day. Galilee, with jockey John Miller sitting quietly, ran a pleasing third to Tobin Bronze without ever looking fully extended. The stewards opened an inquiry but cleared Cummings and Miller before the Melbourne Cup three days later. Starting an 11-2 favourite, Galilee bolted in the Cup and Mabel was counting her money. Two years after her death in 1982, Mark Read did his best to make his mother proud on the Monday before the Cup. Not long before the Cup of 1984, he had been impressed with the win of a five-year-old gelding named Black Knight in the modest Benalla Cup. Yep, a long way from the first Tuesday in November but Black Knight had some serious plusses. "He was trained by George Hanlon - who to my mind was every bit as good at getting horses right for a Melbourne Cup as Bart Cummings,'' stated Read. "George used to win the race with handicappers like Piping Lane and Arwon whereas Cummings had well-bred horses such as Light Fingers and Gallilee. "I liked horses that would get the two miles and Black Knight was by Silver Knight who had won the Cup in 1971." So Read planned to back the horse at the Call of the Card, held every Monday before the big race. In 1984, in the days before casinos and corporate boomakers, you could back a horse to win $1 million in the Melbourne Cup. Read hit the Call of the Card when he made a "punter's book'' against bookmakers, outlaying almost $200,000 on seven horses with $80,000 of his money going on Black Knight at an average price of 12-1. It was at a time when then Hanlon stable had some big punters closely associated with it, one such person being Sydney underworld figure George Freeman. But the money being bet on Black Knight's was largely that of Read, as he was the find out straight after the race and again the next day. When Peter Cook won the race on the five-year-old gelding, some rowdy scenes broke out in the mounting yard. Read still recalls the moment with distaste. "I was accused of betting around the favourite, the Bart Cummings-trained Bounty Hawk who finished down the track,'' recalled Read, who cleared over half a million when Black Knight won. "Somebody very well known and closely associated with the horse loudly said I had paid for it to be pulled up. "You see after the Call of the Card there was a lot of publicity about me backing Black Knight for a stack but Bounty Hawk was one of the other horses I had backed.'' For the record Read had bets of $360,000 to $30,000, $220,000 to $20,000 and $100,000 to $9000 twice on Black Knight. He also backed Foxseal (5th, 15-1) to win $300,000, Bounty Hawk ($230,000, 15th, 4-1) Mapperley Heights ($250,000, 3rd, 10-1) Secured Deposit ($132,000, 12th, 12-1) Lancelotto ($150,000, 8th, 33-1) and Affinity ($90,000, 6th, 4-1). If the Bounty Hawk accusation left a sour taste in Read's mouth he managed to overcome it that night with a party where his mother's name was frequently mentioned. The next day it was business as usual, Read travelling to Kyneton for the races. As he walked through the course he rang slap bang into Black Knight's trainer George Hanlon. Naturally Read was full of bonhomie towards Hanlon and quickly made his feelings obvious. "I told him there was a table for 10 available at Gloria Staley's Lonsdale St restaurant Fanny's, which was about the best going around at the time,'' said Read. "Well George just went right off, abusing me as loudly as he could. It was just this tirade of abuse with George yelling 'you've embarrassed me you bastard'. "It seems he had told his punters Black Knight couldn't win. He never did take up the table at Fanny's but it was there for him until the restaurant closed in 1993." Read will be back betting on this year's cup because it's part of who he is. Since Black Knight he has won some and lost some, Zipping in 2007 when it ran fourth to stablemate Efficient being one that got away. Read backed Zipping, a $7.50 chance, to win just under $3 million and thought he was home 300m out but the horse just failed to stay. As a bookmaker he has been on the other side of the fence when a punter named Kerry Packer wanted $1 million on Saintly who won easily and paid $6.80 on the Victorian tote. Read took the bet because that's what good bookmakers do then re-invested it at the tote, plus backing the horse himself. It ended up on the NSW tote, who weren't that pleased with the result. |
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Hero or villain?
Love him or hate him, Barney Curley is box office. No one can get the betting world talking as he can and that has been the case for many decades. Whilst the focus of much of the media was initially on Frankie Dettori’s return at Lingfield on Wednesday, that soon changed as speculation reached fever pitch that the seemingly retired Barney could well be instigating one of his infamous coups. Four horses racing at three meetings in Britain, all of which had some connection to Curley, were heavily backed on Wednesday morning and reportedly linked together in combination bets. Eye Of The Tiger, trained by Curley when last seen on the track 481 days ago and now trained by Des Donovan - Curley’s former assistant trainer and resident in Curley’s old yard - was backed from 10/1 to even money. The former Group 2 winner bolted up under Shane Kelly in a weak heat at Lingfield at 1.30pm. Just 10 minutes later, Seven Summits, trained by Curley prior to joining trainer Sophie Leech last year and returning from 225 days off the track, was backed from 7/1 to 9/4 to win a modest handicap hurdle at Catterick. Paul Moloney’s mount travelled well throughout the race and was always holding his nearest rival. Meanwhile, Des Donovan and Shane Kelly were heading from Lingfield to Kempton where he would saddle Indus Valley in a six-furlong handicap at 4.25pm. The seven-year-old was making his return from 700 days off the track, but was backed from 20/1 to 4/6. He scrapped home after looking an unlikely winner for much of the race. It should be noted that Shane Kelly and Paul Moloney were often utilised by Curley when he held a licence. The final leg of the gamble was Low Key, formerly owned by Baron Georg Von Ullman, whose cast-offs have often been secured by Curley in the past. Low Key is now trained by John Butler, a former assistant trainer to and tenant of Curley’s, and was backed from 7/1 to 4/7 on his return from 350 days off the track. Despite having the eyes of the racing world on his shoulders, Liam Keniry kept his cool and delivered the seven-year-old to complete the scarcely believable four-timer with a degree of authority. First and foremost and all betting coups aside, one must acknowledge just how incredible a feat of training and planning this was. Any one of those winners would have been described as an excellent training performance when evaluated individually given that they have all presumably had physical problems and had to defy long absences, but to get all four to peak on the same day and be placed in races that they could be confidently backed to win is a genuinely remarkable performance from all involved. At the time of writing, it is pure speculation that Curley was involved at all, but not only do all four horses have links to Curley, the style of the gamble was very much that of the man in the trilby with the Fermanagh accent. Curley came to international prominence for organising the infamous Yellow Sam coup at Bellewstown in 1975 which reportedly yielded €1.7m in today’s money. While that coup is sure to live on the longest due to the ingenuity and quality of the story attached to it, Curley reportedly won well more than double that amount in a more recent coup on May 10th 2010 which bore striking similarities to Wednesday’s coup. The 2010 plot involved three horses trained by Curley, who had just 12 horses in his care at the time, and an ex-inmate of his who had been moved to trainer Chris Grant. The four horses were linked together in multiple bets and three of them won, reportedly netting Curley in the region of £4m, a large proportion of which was only paid out after a high-profile and prolonged dispute with Betfred. Had the fourth horse won that day, approximately £20m would have been paid out. When one steps back and examines Wednesday’s coup, one wonders did Frankie Dettori even play a minor role in the incredible day. It is well known that Curley took Dettori under his wing as a young apprentice and the two remain very close. With Frankie’s long-awaited return from injury being sure to be the focus of media and public alike, was it a coincidence that Frankie choose to return on a quiet Wednesday that also saw his great friend attempt the biggest betting coup in years? Only the men involved will know for sure. The handicapper’s role must also be discussed, as three of the four were dropped eye-catchingly large amounts in the official ratings in a short space of time. Eye Of The Tiger was dropped a remarkable 56 lb after just six runs for Curley, Indus Valley had been dropped 16 lb in four runs since joining Des Donovan and Low Key had been dropped 28 lb in just four runs since joining John Butler. Seven Summits had been treated similarly on the flat, being dropped 42 lb in six runs in Great Britain, but he landed his leg of the four timer over hurdles following four outings over obstacles. One can only imagine how long it would have taken for a horse to be dropped by the same amounts by our more cautious Irish handicappers! The obvious question is this, are such coups good for racing, or do they make a mockery of the formbook and integrity of the sport? My view is that, save for a couple of quibbles, Barney Curley exploits the handicapping system as it stands and does it more ruthlessly than anyone else is willing or able to. In terms of the coverage it generates being perceived by some as negative, I would suggest that anything that gets people buzzing about Mickey Mouse races on a Wednesday afternoon is great for racing. It is the characters and drama of racing that draw many people in and instances such as Wednesday’s drama will do more good than harm. One suspects that almost every trainer, owner and punter, secretly or otherwise, would love to pull a stroke with just one horse in one race, but the reality is that the vast majority do not have the ability and/or patience to get a horse to the track to win when duly expected, never mind having the logistical skills and ability to keep the most precious of secrets under wraps to get adequate sums of money on without alarming the bookmakers. If it was that easy, it would be happening every day and that would be a serious problem. However, there are very few people in British and Irish racing capable of pulling off such a coup such as Wednesday’s and thus they are a rarity. Curley aside, perhaps only Michael and Barney O’Hare and Patrick Veitch can claim to have successfully pulled off similar coups in recent years. For all the rejoicing of seeing the bookmakers take a hiding from a brilliantly-executed coup, this case did highlight how our game is changing. A few months after his audacious coup in 2010, Curley told the Independent that: “Nobody will win as much on horse racing this century.” If the speculation connecting Curley with Wednesday’s coup is correct, that view didn’t stop Curley, who handed in his training license and declared himself retired just over a year, making a bold attempt to better it, but his words could well prove prophetic. Unfortunately for Curley and those that like to see the bookmakers take an old-fashioned caning, his 2010 coup served notice to the bookmakers of the danger, albeit an unlikely one, of multiple horses being linked together by one puppet master. In these days of bean-counter bookmaking, every measure is taken to ensure that bookmakers are not exposed to excessive liabilities and one-off gambles such as this week’s one. The systems put in place after his 2010 coup coupled with the increase in popularity of overnight betting markets and the ease with which punters can communicate with one another via Twitter meant that many people cottoned on to the gamble at an early stage. As a result, early reports from bookmakers suggest that those connected with the coup did not win as much as the £4m won by Curley in the 2010 gamble, but any coup that results in a seven-figure pay out in this day and age has to be considered a spectacular success. The bookmakers will undoubtedly be relieved that the efficiency of their bean-counting systems coupled with their cautious approach to laying saved them from a proper caning by an ingenious coup, but as Curley put it himself in the aforementioned Independent article in 2010: “It's not for the money, it's for the buzz. Beat the system, you know, beat those bookmakers, those smart-arses. You go into a betting shop and see them robbing these poor fellows, with these gaming machines. They're as addictive as crack cocaine. You see them coming back to the counter with their credit cards, for another tenner. Of course the great thing about those machines is that number nine won't go to even money and win five lengths." Barney Curley may be 74 years of age, but whether you love him or hate him, he is still the master the hitting the bookies where it hurts the most. Such is the changing nature of the sport and bookmakers, there is unlikely to be another Barney Curley. In an era where genuinely interesting characters are in very short supply, I for one will be very sad the day that the final shot is fired between Barney and the bookmakers. However, one suspects that it will be Barney rather than the bookmakers that chooses that day and there may well be another bullet left in the Curley gun yet. |
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A film well worth watching even more so because of the trials and tribulations of the late Philip Seymour Hoffman.
The film opens with Mahowny in conversation with a psychiatrist in prison, stating that his ‘secret life’ is a lot less secret than anyone else’s at the moment. This sets the scene for the back story to be told and begins from the point that Mahowny, a successful banker, has just been promoted in the Canadian bank where he works. His girlfriend, played by Minnie Driver, also works as a clerk at the same bank and soon shows that she is frustrated by her shy, workaholic boyfriend, who never seems to have enough time for their relationship. The viewer’s opinion of Mahowny is immediately changed when two ‘bookies’ turn up at Mahowny’s office asking him to pay the money that he owes them or violence will ensue. As he doesn’t have the money himself, he realises that he can use some funds from a client account to pay these debts, initially planning to repay the unofficial loan. However, once he has successfully defrauded the bank and realises that he can get away with it easily, he becomes locked into a cycle of taking greater sums of money from the bank to place ever larger bets with his ‘bookies’. He also begins to travel regularly to a casino in Atlantic City to play the tables, lying to his long-suffering girlfriend in the process. She slowly comes to understand the nature of his problem. The unscrupulous casino boss in Atlantic City, played by John Hurt, becomes fascinated by the unglamorous Mahowny and soon realises that he can make a lot of money from him as Mahowny’s gambling problem becomes evident. It is in the scenes at the casino that the viewer shares Mahowny’s compulsion to place bets without regard to the consequences of losing huge sums of money. Any attempt by his girlfriend to make Mahowny acknowledge his problem is met with complete denial by him. Although she has no idea of the extent of his financial difficulties, she alone understands the gravity of his situation but decides to stick by him regardless of this. The final unravelling occurs as the police investigate the ‘bookies’, who have continued to place bets for Mahowny, finally leading them to Mahowny himself. The viewer is finally returned to the conversation between Mahowny and the psychiatrist in prison. Mahowny is asked to rate the thrill he got from gambling on a scale of one to a hundred. He answers with ‘a hundred’ and then says that the biggest thrill he has had outside of gambling would score twenty on that same scale. Mahowny goes on to acknowledge that he must now accept a maximum of twenty out of a hundred for excitement in his future life and ends by saying “twenty’s OK”. |
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It was November 22, 1998, when a Jew from New York turned up dead in a two bit Vegas motel usually used for quickie shtups by hookers and philanderers. Nobody knows what this guy used his room for, but plenty of guesses abound, and they run closer to illicit substances than illicit lust, though no drugs were found when the cops and coronor arrived. Whatever he was doing, he ended up face down on the slightly musty bed with $882 in his pockets.
Eight hundred eighty-two portraits of George Washington were all the 45-year-old Stu Ungar had in the world. Just a few days earlier, Ungar had been fronted $10,000 in "walking around money." What he spent it on is uncertain, though pretty easy to hypothesize. It most certainly was not steak dinners. A diminutive figure at 5'5", Ungar had always looked about half his age — it's how he got his nickname, "The Kid" — and in the months leading up to his death he'd wasted away from his normally scrawny figure to a gaunt sub-one hundred pound weight. Even more unbelievable, perhaps, was that Ungar had made millions on high-stakes poker and gin games, raking in one of the highest winning percentages in gambling history. Every penny of it was blown on drugs and the reckless gambling they led to. Two days before he stopped breathing, he'd checked into the Oasis Motel paying cash for a one-night stay. He extended it an extra day with a hundred dollar bill slipped to the manager. This was after an employee had found him similarly face down and convulsing the morning he should've been checking out. What might have prompted some to call for an ambulance or at least a cop car was overlooked. Ungar asked his hosts to shut the window on their way out. "I'm cold," he said. The window, however, was already shut tight. Those may not have been the last words of "Stuey the Kid," but they were probably the last ones he ever said to another human being. Sometime in the ensuing 24 hours, the boy king of high-stakes gambling climbed back onto the ratty mattress and died. His heart, according to the official report, simply gave up its fight against a lifetime of cocaine, booze, and God knows what other garbage. His arteries had hardened and refused to let any more blood pump through him. Drugs were in his system — probably where he'd spent the rest of the ten grand — but the coroner concluded that Ungar's death was accidental, not the result of an overdose. If one binge didn't kill him, then it could at least be argued that the man who looked like a boy and gambled like a giant certainly overdosed. It was just a longer trip, and it wasn't just drugs that did him in. The son of a bookie who owned a bar for patrons of ill repute, Stuey was born into the underworld. He went to the Catskills for the holidays, like other Jewish kids and their parents in the 1950s, but he picked up gin rummy and the thrill of the cards instead of Borscht Belt jokes. Back home on the Lower East Side, he helped his old man "figure out what the parlays paid at Belmont." Blow and methadone weren't the only things in Ungar's system when he died. The ultimate vice ran through his veins, the unquenchable thirst for what poker pros call the rush — the exhilaration of winning, the thrill of a lucky run — and in all too brief an existence it did him in more brutally than any coke binge ever could. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ There was a time when the drive to win, the hyper-aggressive uber-talent that was Stu Ungar, looked like it would light the poker world for years to come. That such a supernova might burn out so quickly and so dramatically didn't occur to the onlookers at Benny Binion's Horseshoe Casino in Las Vegas in the spring of 1980. The tenth installment of the World Series of Poker, what has become the signature event for professional card players, was winding down. Seventy-three entrants — along with their $10,000 buy-ins — had been whittled to just two. Jay Heimowitz, a Jewish amateur who'd collected ten thousand greenbacks in his Army barrack poker games — all before his 21st birthday — and turned his winnings into a profitable beer distribution company, had been busted out in third place. All that remained was a heads-up showdown between Ungar, a then 26-year-old featherweight, and 46-year-old Doyle Brunson, otherwise known as Texas Dolly and a heavyweight by any measure of the term. The juxtaposition of these two men had to seem a little bizarre, even in a world where oddities and personalities of a, how shall we say, colorful sort abound. Yet there they were, Stuey "The Kid" and Texas Dolly facing off for the biggest cut of a prize pool that neared three-quarters of a million dollars. Ungar was a bean pole and ghostly pale — he might've tipped the scales into the triple digits, but just barely — and even at 26 looked more like a high school freshman than a grown man. His arms didn't seem any thicker than the stacks of chips arrayed in front of him. Ungar had also never played a major poker tournament, instead cleaning up at his native game, gin rummy, and getting himself banned from every blackjack table in town due to his computer-like card counting abilities. Texas Dolly, on the other hand, was a battle-hardened veteran of high-stakes poker. Having played the illegal cash game circuit in Texas, Oklahoma and Louisiana since the mid-1950s before settling in Vegas, Brunson had already won two World Series of Poker titles. He was also considerably older, not just in years, but also in appearance and demeanor. Heavyset and balding, Brunson sometimes required a crutch due to an accident back in Texas that sent a load of sheetrock crashing into his leg, breaking it in two places. He was only in his mid-forties, but he could've passed for fifty, and as opposed to the less than loquacious Ungar, Brunson was educated and fairly articulate, having paid his way through graduate school with poker winnings. In his lifetime, Texas Dolly had probably gambled as much as Ungar, but Ungar's lifetime was much shorter and he was far more reckless than the legendary Brunson. The two couldn't have been more different, and seeing them perched across the green felt, facing off for a $365,000 top prize could only be described as surreal. Brunson had laid 100-to-1 odds against the upstart gin player. He had, after all, only gotten into the tournament because another poker pro and Benny Binion's son Jack had been willing to stake his buy-in, so the odds weren't entirely unjustified. For Ungar though, the long odds from the guy he was now facing provided just enough goading to his ego. Later on, Ungar claimed he could only play people if he could find something to hate about them, even if it's as trivial as their height. Brunson had given the kid just the reason he needed to wipe the felt with him. Problem was, at a critical hand the neophyte New Yorker had a measly 5-4 of spades against Texas Dolly's two pair, aces and sevens. What happened next is what makes poker so thrilling, because Ungar was about to get lucky three times over. First, Brunson made a too-small bet with his two pair, allowing Ungar to call with only one chance to win — he'd need a three to join the ace and a two already face-up on the table, giving him a five-high straight. Brunson's mistake was Ungar's lucky break number one, and number two came when the next community card was turned up, revealing a beautiful red three of hearts. From a four-to-one underdog, Ungar had become a nine-to-one favorite. His final stroke of luck came when Brunson pushed all his chips into the pot against Ungar's nuts — poker slang for the best hand possible. The kid who'd found cards in the Catskills quickly called the bet. When a harmless two came down on the river, Ungar had beaten poker royalty in the granddaddy of all poker games, becoming the youngest player — at the time — to do so. As with all heads-up matches, the crowd of onlookers probably held their breath in collective silence as the cards were turned up and the winner was crowned. The stunning quality of Ungar's victory over the established champion probably caused them to hold their silence that much longer, but did any of them realize what they had just witnessed? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The win in 1980 was both a long way and just around the corner from where Ungar started out. At age 13, when he probably looked about six or seven-years-old, Stu's father Isador had a heart attack and left his wife a widow and his son half-way to orphanhood. Isador did this while in the arms of his mistress, which must've been doubly insulting to Stu's mother, who one year later had a stroke that eventually landed her in a nursing home. He'd skipped from sixth to eighth grade and was in tenth when his mother's brain blew a circuit, but at the ripe old age of 14, Stuey dropped out and became the breadwinner for his ill mother and older sister. They say a Jewish boy becomes a man when he becomes a bar mitzvah, but the fact that "The Kid" was technically already a man didn't provide much comfort. "I was never a kid," Ungar said in an interview a few months before he checked into a motel to die. "I got a job dealing poker in a goulash joint on Ninth Street between Second and Third Avenues." The pay could've been better, but Stu made his bank in other ways. Barely a teenager, he hustled like a seasoned shark. His best routine was standing on the edges of underground gin games, almost all of them high-stakes affairs. A partner at the table would eventually claim exhaustion and offer his "cousin" Stuey as a fill-in. Seeing a child, the other gamblers were more than welcome to oblige, to their eventual chagrin. In this manner, Ungar cleaned up against guys politely referred to as "Leo the ****" or "Bronx Express." It was a game against "Yonkie," a.k.a. Harry Stein, that finally dried up Stu's gin competition. A Canadian import, he was called in expressly for the purpose of busting Ungar. Twenty-seven games of Hollywood (a variation of gin) later and the teenage hustler had relieved Yonkie of $10,000 and sent him back across the border. "You have to understand that $10,000 was a lot of money back in the 60s," recalled Ungar years later about his winnings against the Canadian. He promptly blew them at the racetrack, which fit quite nicely with his M.O. One Thanksgiving weekend, he had just wrapped up a two-week rush that had netted him a cool million in earnings. The card table had been good to him, but as fellow poker pro Walter "Puggy" Pearson once said about Stuey, "because he's so good at certain things, he thinks he should be good at everything." Since he was cleaning up at poker, why wouldn't he clean up betting on the weekend's gridiron match-ups? "I was betting $100,000, $150,000 a game," Ungar said of the memorable betting binge during that interview shortly before his death. "That was nothing to me. I had no sense of the value of the money." By the final seconds of Monday Night Football, the million in cash had become a debt of $800,000. One weekend and Ungar had racked up the kind of loss that would make any other man as dead as the presidents on the dollars he'd just blown. For Stuey, the money probably didn't matter as much as the fact that he'd lost. Money was just the tool of his particular trade, and Ungar traded plenty. He was an atrocious golf player, so much so that he was often allowed to tee up every single shot, a huge advantage. Pearson swears he once saw Stu tee up the ball in a lake. He still lost, once to the tune of about eighty grand in a game against Jack "Treetop" Straus — another Jewish world champion who earned his nickname for his decidedly un-tribe-like 6'6" frame — and all this was before making it off the practice green. The golf course wasn't the only black hole into which Ungar would toss his money. "I once played ping-pong for $50,000 against some Chinaman in Tahoe," he boasted. "I'm an action freak. I'd bet on a cockroach race." When he wasn't gambling his money away, he was tossing it around on bar tabs and women. He managed to demolish five Jaguars and a Benz on the streets of Las Vegas too. Perhaps the best story comes by way of Mike Sexton, currently a commentator for the World Poker Tour and once a friend and bar buddy of Ungar. As Sexton tells it, he and Ungar were in Palm Springs, California, for a golf outing with another couple friends. The four of them went to dinner at an upscale joint that was recommended to them, but upon arriving found the place packed like a sardine can. When the maitre d' asked for a reservation, the group of gamblers had to inform him they had none. "I'm sorry, but I won't be able to seat you without a reservation," the well-dressed host informed the group. As his three buddies turned towards the door, Stuey stepped around to the side of the maitre d' and pushed a single bill into the man's hand. "Ungar always let Benjamin Franklin make his reservations," Sexton has written. "We'll be at the bar," said the kid who probably looked like he'd just picked up his driver's license. If only the story ended there, it would serve as a fine example of Ungar's hubris and willingness to part with cash as easily as he could win it. But Ungar was more than a gambling addict; this was a man with a few thousand poker chips on his shoulder. The foursome clawed their way through a pickpocket's paradise and finally made their way to the bar. Lining up to make their drink orders, it came down to Stu and a rum and Coke. The bartender, however, wanted proof that this pip squeak wasn't underage. "I.D. please," was his response. "What are you talking about," the card player screamed loud enough for half the restaurant to hear. "I'm 35-years-old!" Absent I.D., the bartender was not impressed so Ungar resorted to his universal standby — lots and lots of currency. His skeletal arms disappeared into his pants pockets, quickly to reappear with two neatly rolled stacks of $10,000 apiece. Slamming them, double-fisted, onto the worn wood of the bar, Stu presented them as all the I.D. he needed. "Do you think any teenager would be carrying around that kind of money," he asked the bartender, who thought it over for a second before pouring him the drink without further protest. The child lookalike didn't have long to drink it, however, as the maitre d' showed up just a few seconds later with an open table. Not exactly a Jewish mother's dream, but if Ungar could've simply held onto his winnings, he'd have been richer than any doctor or lawyer, if not as reputable. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Though it's hard to imagine, there was another love in Stu's life — two of them, in fact. Back in New York, while he was still just a teenager and still pocketing gin players' cash in local dive bars, he met a blonde cocktail waitress named Madeline Wheeler. Sexy as they come, Madeline's come-hither qualities proved almost as alluring to the young hustler as the rush of gambling. It took Ungar a year to land his first date, which could be considered record time for a suitor who looked the part of a child in his dad's gaudy polyester. It was his charm that ultimately got Madeline to go out with him. "I knew what I was getting into," she told the New York Times last year as the newspaper covered the 2005 World Series. "I knew it was always going to be the cards." Indeed their relationship was a rocky one, but Ms. Wheeler followed Stu out to Vegas anyway, and a year after he won the world championship for a second time in 1981, she became Mrs. Ungar. Now a husband and step-father — Madeline had a son from a previous marriage when she was 18 — Ungar's lifestyle never quite adjusted. The relationship stayed rocky. Disappearing for days at a time to burn cash, snort crack, and woo other women, Ungar couldn't bring himself to settle down. His day-to-day affairs would have seemed just the other side of peculiar to an average person. Grocery shopping took place at the 7-Eleven near the Tudor house he purchased with his poker winnings. Foregoing things like a mortgage and calculating interest rates, Stuey instead bought everything with cash. "Basically, you needed to take care of him," Madeline said shortly after Ungar's untimely demise. "Everything about Stuey, with the exception of the tables, had to be looked after. You needed to take care of him from head to toe. It was like bringing up another child at times." Bob Stupak, a casino owner and Ungar's friend — and last financier — once recounted a story about the poker pro's naiveté away from the casinos. "In 1980, Stu got invited to Ireland to play in a poker tournament but did not have a passport," Stupak told the Las Vegas Sun. "He went to get one and was told it would take a while to process. Stu asked if there was a way to get it quicker, and the clerk said for 'a few extra dollars' it could be ready in a couple of days." What Ungar didn't understand was that the clerk had referred to a processing fee, not a bribe. He quietly slipped three hundred-dollar bills to the clerk. "That's what Stu thought the guy meant by a few extra dollars," said Stupak. Not long after their wedding, Stu became father to Stefanie when Madeline gave birth to their one and only child together. Fatherhood didn't mellow him; his antics eventually led to divorce and periods of estrangement from his daughter, who lived with her mother in Florida from 1989 until 1997. Nevertheless, many of his friends have said multiple times that if Ungar survived as long as he did, it was because of his love for Stefanie and his determination to see her grow up. He wasn't entirely unsuccessful in connecting with his daughter. "A lot of people knew my dad only as a great poker player. But he also was a generous man who did not have a mean bone in his body. He was funny and he was the gentlest man I knew," Stefanie said after his death, only a high school sophomore at the time. She recalls that he would call her "20 times a day" to check up on her. "My dad would ask me things like are you eating? If I said no, he would say he was coming over to take me out to eat. If I needed something, he'd give me his last $200 without me knowing it was all he had. Then he would walk around broke for days." Stefanie also faced Stu's innocent streak. On a visit to see her father in the early 90s, she discovered a letter he had received. It was an invitation from then-president George Bush to visit the White House. As one of the greatest poker champions of the day, even the leader of the free world was willing to take some time out for Stu. He purposefully ignored the invitation. "I said, 'Dad, you know how rare it is to get an invitation to the White House?' He said: 'What am I going to talk to the president about? We have nothing in common.' Dad said he wouldn't even know which fork to use at dinner." The love for a daughter and the love of a daughter, perhaps this is what kept Ungar going for all those years, but it couldn't save him. His family may have loved him enough to forgive his trespasses, but his home was the casinos and gambling halls of Vegas. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ An ex-wife and daughter weren't the only family Stuey had. The insider quality of the poker world makes for a kind of extended family, and by and large, that family takes care of its own. Nevertheless, Ungar's poker family weren't able to save him either, as he withered into a ghost in the Vegas card rooms. Occasionally showing up to play but usually losing and hitting up old friends for loans they knew he could never repay, he simply was too far gone. This was the environment into which Ungar showed up to pester Billy Baxter, a fellow poker compatriot, in 1997. Looking for a friend to buy him into the World Series of Poker, Ungar's virtual pariah status made the job especially difficult. Baxter initially rebuffed the former champion. It had, after all, been a decade and a half since Ungar had won his back-to-back titles and almost a decade since he'd made any kind of serious run at the final table. That was a ninth-place finish in 1990 — a story in itself — when Ungar overdosed in the middle of the tournament. Unconscious in the hospital, his massive chip advantage allowed him to finish in the top ten as the dealer folded away his blinds every hand. Baxter had backed Stuey that year too and swore never to do it again. "I was playing Lowball [a variant of poker] at the time," Baxter remembered it during an interview at the '98 series, recounting how Ungar refused to stop pestering him. "I must have been winning, because a day later I put up the entry fee." Ungar did not look the part of a high-stakes poker champion, even less so than he had when he showed up in 1980 looking like a middle school reject. Two decades of cocaine up his nostrils had literally worn away his nasal membranes. His nose had recessed into a tiny pug, on which he now perched a pair of blue shades in a vain attempt to mask the damage. As opposed to looking half his age, the self-abuse made him look every bit the washed-up 40-something he was. What had brought him from the lowest depths to that particular poker championship was a mixture of broken pride and police intervention. Having been busted twice, on one occasion for trespassing and again for possession of drug paraphernalia, he was required to remain clean or head for the lock-up. Seeing just clear enough to notice the whispers of how he was a washed-up castaway damaged his ego that much further, mainly because he knew they were mostly right. "It got to me real bad," he said of the lead-up to his '97 appearance. "My pride was hurt." So there he was sitting politely at the table when he and 311 other competitors heard the words, "Shuffle up and deal." It must've seemed a tragic farce, if not an entirely sickening display of desperation, or hubris, or both. By day two, however, Ungar was storming up the leader board, raking in the chips off amateurs and pros alike. The press dubbed him "The Comeback Kid," an extended version of his traditional moniker. "If they wanted to do a clinic on no-limit Hold 'Em, they would have filmed me from day one to the final hand," beamed a restored Ungar after the tournament. "You can't play more perfect than I played. I was reborn." Reborn, yes. Whether he played perfectly is debatable, but nobody can dispute that Ungar's aggressive brilliance was on display as if he'd never spent twenty years on the downslide. Sexton called it possibly the greatest performance ever in the event. By the last day, Ungar out chipped his nearest opponent by more than $300,000. Throughout those four days, he kept his daughter's photo in his shirt pocket and would regularly phone her during breaks. "He would tell me there are only 18 players left, then six left and so on," Stefanie remembers. While he was at the table, he'd often slip out the photo and look at it during hands. Eventually, all 310 players had surrendered their stacks, and it was just casino impresario John Strzemp against the two-time champion — who had amassed a four-to-one chip lead. Strzemp never had a prayer and, to his credit, he probably knew that. Faced with the best player in the world playing his best game ever, Strzemp was forced to rely on a strategy of all-in bets with hands others might have attempted to win through less risky moves. If luck broke his way, the strategy would work. If it didn't, then at least Strzemp made his best play for victory. Needless to say, it didn't. It spectacularly didn't. Ungar won the main event with an Ace-Four offsuit, which is to say he had an ace but that's about it. Strzemp had an ace as well, and he had a better kicker with an eight of clubs, so when Ungar pushed all in after an ace hit on the flop, Strzemp once again risked his tournament life with the top pair. The Comeback Kid was a slight underdog, since he had a straight draw. If a two fell on the turn or river — fourth and fifth community cards respectively — the tournament would be over. A three, which helped neither player, hit on the turn. Then, in a suck out for the ages, Ungar spiked a two on the river and won the million dollar prize. It was a bad beat for Strzemp, but nobody seemed to mind Ungar's ballsy move. They had their beloved superstar back, and he'd returned in history-making fashion. The kid from the Lower East Side was the only player to win three world titles. He posed for the photos, then he called his daughter. [Editors note: Johnny Moss holds three World Series of Poker championships, but his first one — in the first year of the series — was by vote of his peers, not because he defeated all other players. For this reason, Ungar remains the only player to actually win three titles under the current format which has been employed in every year except that first one.] It would only take Ungar a year to lose every penny he'd just won and then some, get rhinoplasty — which he then obliterated by snorting coke shortly after — and generally return to his less savory ways. By the time the '98 series rolled around, Ungar was in absolutely no condition to play. His right nostril had literally collapsed following the rhinoplasty debacle, his skin was a pallid grey, and he was dangerously underweight. "I looked like I came from Auschwitz," was his self-description a few months later. Despite the fact that Baxter had put up his buy-in once again, Ungar pulled out of the tournament at the last possible second, confirming for the poker world that his comeback was little more than a one shot deal. Only a few months later, Ungar finally climbed into the coffin he'd been dancing around for so long. Stupak pooled donations from the players of Vegas' card rooms to cover funeral costs. A rabbi presided over the memorial for a man who had died, at least in spirit, well before his pulse went faint. Then, with the boy king whose own demons destroyed what could've been a poker empire safely in the soil, they went back to their tables. They had, after all, lost Stuey long ago. This was Stu Ungar's end, as unglamorous as his beginnings and seedier still, and for those who knew him best, it wasn't the way he should be remembered. The Ungar that should be remembered made history when he raised big stacks of cash over his head in 1997, grinning with his blue shades and showing the world why he'll never be forgotten. The boy who took down the legends, who paved the way for the East Coast poker brats who take down today's televised tournaments, lives on in the poker greatness that has never since been matched. In his lifetime, he never entered more than thirty major tournaments. He won a third of them, picked up three world titles and made millions — though he mostly ended up making it for others. Yes, Stu Ungar died alone in a low-rent motel in the Nevada desert, but his shadow still falls across every poker table in Vegas, at every home game across America. If he was willing to bet the house — and the city along with it — then he won his bet. The Kid ruled the felt. It was just the demons that ruled him. |
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Still big on censorship i see!
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A gambler who is suing Britain’s oldest casino for withholding his £7.8 million payout has admitted he did win the cash by ‘reading’ the cards.
Phil Ivey, dubbed the Tiger Woods of poker, says he used a legitimate technique called ‘edge sorting’ to identify cards during a game of punto banco, a type of baccarat based purely on luck. But he vehemently denies cheating. However, Mayfair club Crockfords believes he ‘operated a scam’ and claims he ‘acted to defeat the essential premise of the game’ – and is refusing to hand over his winnings. Scroll down for video 'The Tiger Woods of poker': Professional gambler Phil Ivey is suing Britain's oldest casino for withholding his £7.8million payout, despite admitting that he did win by 'reading' the cards using a controversial technique 'The Tiger Woods of poker': Professional gambler Phil Ivey is suing Britain's oldest casino for withholding his £7.8million payout, despite admitting that he did win by 'reading' the cards using a controversial technique Mr Ivey – a professional American poker player – is suing the casino in the High Court and the case, the biggest legal battle in casino history, is due to be heard later this year. In May, The Mail on Sunday reported details of Mr Ivey’s win – and revealed that the casino had not paid out because it believed he had been reading the cards. In his court submission – seen by The Mail on Sunday – multi-millionaire Mr Ivey, 37 admits to being an ‘advantage player’ – someone who uses legal ways to gain a mathematical advantage over the casino. |
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It was well known in the industry around this time, according to Mr Ivey’s claim, that players might be able to use imperfectly cut cards to their advantage.
Because of this, the claim adds, the casino should have thoroughly checked them before use. On his visit to Crockfords, Mr Ivey was accompanied by a Chinese associate known as Kelly, who was adept at ‘identifying the design flaws’. Mr Ivey’s claim says: ‘During the second session on August 20 [Mr Ivey] made various requests for decks of cards to be changed at the end of hands with which [Crockfords] chose to comply. This continued until Kelly identified a deck or decks of cards where the pattern on the reverse side of the cards was asymmetrical (in that one “long’’ side was different from the opposite side).’ Outlining how the pair managed to ‘edge sort’ the deck, the claim says: ‘Kelly would ask the dealer to reveal each card in turn by lifting the edge furthest from the dealer so that Kelly could identify whether the card was a seven, eight, or nine – the key cards in punto banco. The first time that Kelly identified a key card, she told the dealer that it was a 'good' card which she wanted the dealer to rotate in the opposite direction to all the other cards and the dealer complied with the request. ‘In this way, the long edges of the key card became distinguishable from those of the other cards.’ Over the course of time, ‘the cards in the deck were increasingly orientated so that “good” and “bad” cards faced in the opposite direction’. This meant that Mr Ivey was later able to recognise the key cards and bet accordingly. |
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Initially, he was betting £50,000 a hand but, having edge sorted the cards, he asked the casino’s permission to raise the maximum stake to £150,000.
Mr Ivey maintains in his claim that Crockfords’ owners were well aware how edge sorting worked and only have themselves to blame. He says that casinos frequently accede to advantage players’ special requests because they do not want to deter them from playing. Crockfords, the oldest private gaming club in the world, initially agreed to transfer Mr Ivey’s winnings to his bank account, but has returned only his £1million stake. The casino is owned by Genting, a Malaysian gaming corporation, which sent investigators to London to question employees and scrutinise hours of CCTV footage. |
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By almost any measure, Louis B. Colavecchio is a quintessential, unremarkable Rhode Islander.
In this state, novelty license plates are such a status symbol that people have bequeathed low-numbered tags in wills. Colavecchio drives a red Honda adorned with plates that sport his initials. In this state, jewelry manufacturing and the tool-and-die business have had a significant shared history. Colavecchio's father was a tool maker, and Colavecchio used those skills in his jewelry business. In this state, a daily commute of more than 15 minutes is pretty much unheard of. It is no surprise, then, that Colavecchio lives exactly two miles from his storefront jewelry business, Diamonds In Design. People were surprised, however, when law enforcement officials in Atlantic City said they had found thousands of fake slot-machine tokens in Colavecchio's Honda. And in his North Providence jewelry store, the dies to make counterfeit tokens for nearly every major casino in the nation. Law enforcement officials are calling the arrest of Colavecchio and his girlfriend, Donna Ulrich, on Dec. 28, among the largest gaming-related counterfeit busts in the nation's history. When state police searched Colavecchio's car in the parking garage at Caesars Atlantic City Casino Hotel, they found more than 6,000 fake slot tokens, ranging from $5 to $100 denominations. A probable-cause hearing is scheduled for Thursday. State police estimated there were 750 pounds of tokens, made for at least nine of Atlantic City's 13 casinos - so many, that when police transferred them to an officer's car, the rear bumper nearly scraped the ground, according to court papers. In Colavecchio's North Providence jewelry shop, federal and state law officers found a 3,800-pound safe containing 60 dies to make fake slot-machine tokens for most of the casinos in Atlantic City, Reno and Las Vegas, and for two casinos in Connecticut. That such a huge scam could have been operating out of the tiny storefront along the town's main thoroughfare boggled residents and merchants. ``We used to hear a banging noise and wondered what it was,'' said an employee at Perfect Touch Beauty Boutique next door. ``We just thought it was them making jewelry.'' Neither Colavecchio nor Ulrich has a criminal record. And neither made waves, at least not among 13 neighbors on their cul de sac, who generally said they knew nothing about Colavecchio or Ulrich. * Tool-and-die shops once filled the state, providing precision tools to another of the state's big industries - jewelry manufacturing. Louis Colavecchio's father, Benedict, arrived in Providence in 1903 from Italy. Ben Colavecchio was a self-employed toolmaker, and owned two Providence tool companies. Ben Colavecchio and his wife, Dora, had three children. The oldest was Ronald, a Jesuit in Brazil. Next came Angela, a suburban Providence housewife. The youngest was Louis, born in 1942. He followed in his father's footsteps. After graduating in 1964 from Providence College, Louis Colavecchio ran the Trop Jewelry Co. in Providence. By 1987, success afforded a move to suburban North Providence, where Colavecchio bought a $130,000 condominium in a development called Louisquisset. The decade-old development is a perfect place to be anonymous. A handsome stone guard house gives way to quiet streets with names that reflect the site's history as a country club. A nine-hole golf course, tennis courts, a small swimming pool and a pond dotted with Canada geese round out the amenities. Residents say they barely know their neighbors, who are mostly retirees or young professionals without children. Colavecchio's gray, wood-sided condominium stood silent last week. An American flag fluttered from a pole attached to the garage and a green garden hose hung neatly from a metal frame on the wall. * Donna Ulrich also was born into a blue-collar Rhode Island family. Her father, Wilfred Morin worked two jobs, and his wife worked as well. Wilfred Morin, a machinist for the U.S. Ring Company, instilled a strong work ethic in his children. ``We were always frugal with money,'' says one of Donna's brothers, Wilfred R. Morin of Middletown, R.I. ``The finer things in life were never something we aspired to. Things weren't easy.'' Donna worked for a time as a teller in the now-defunct Woonsocket Savings & Trust. ``She's a superb, wonderful person. She's always been as honest as the day is long,'' her brother says. According to Morin, Donna Ulrich, twice divorced with no children, and Louis Colavecchio met at the complex where both lived. ``He was absolutely one of the nicest guys I've ever met,'' says Morin. Morin met Colavecchio several times during family get-togethers, where, he recalled, Colavecchio wore a beautiful gold interlocking bracelet that he designed and made himself. * Louis Colavecchio's quiet middle-class life had been disrupted in 1990. When the Trop Jewelry was robbed. Colavecchio, rescued by his son, was found unconscious, bound and gagged, according to a police report. The following month, Trop Jewelry Co. filed for bankruptcy. Months later, Colavecchio filed for personal bankruptcy. Between the two bankruptcies, in January 1991, Colavecchio started Diamonds in Design Ltd. The company always maintained an address on Mineral Spring Avenue, North Providence's main drag, which is overwhelmed with strip development. The Colavecchio store consists of a narrow room with glass door and plate-glass window. Neighboring merchants said the store had glass display cases with gold chains and other jewelry until about a year ago. Colavecchio's state-issued precious metals license, which allows a company to purchase gold and silver from the public, expired in June of 1996. Neighboring merchants say visitors were buzzed into the locked store, but added they saw few, if any, customers enter or leave. An employee at nearby Copy World remembered that Colavecchio on one occasion offhandedly said that he really didn't need his business - that he just ran the store to keep himself busy. * Small black lettering on the door to the jewelry store never mentions Diamonds in Design Ltd., but reads, ``Precision Molds, Models and Dies. Prototype Custom Work. E.D.M. Electrodes. E.D.M. Machining. Appointment Only.'' Rhode Island's tool-and-die shops are a traditional industry. They make the tools that other companies need to construct their products, and go hand-in-hand with the state's jewelry manufacturing. Electric-discharge machining, or E.D.M., uses electricity to produce an image on the metal - an electronic form of carving or sculpture, according to Winston Knight, chairman of the manufacturing engineering department at the University of Rhode Island. A die is the mold used in combination with a mechanical press to imprint softer metal into some desired shape. A slot-machine token could be produced by using electric-discharge machining to carve into the die those letters, numbers and insignias to be impressed onto the token's softer metal. Sculpting the die, says Knight, is an art. Because slot machines are sensitive to the writing on a token, a forgery must be extremely precise. Casinos have their tokens stamped with their own insignias, so only those tokens can be used in their slot machines. * In August 1996, Caesars' Casino in Atlantic City discovered in an inventory that it had too many $10 slot machine tokens circulating in its facility. An investigation by the New Jersey Division of Gaming Enforcement determined that the casino's inventory of tokens had been flooded with ``high-quality counterfeit slot tokens.'' The state notified other casinos, and soon Bally's Park Place and Showboat Casinos also found fake tokens. The state studied the tokens, and determined they were made with dies that had been created using an electric-discharge machine. Casinos are routinely monitored with surveillance cameras, and two suspects came to light - Louis Colavecchio and Donna Ulrich. According to court papers, on Sept. 13, state police detectives saw Colavecchio and Ulrich at Caesars' playing $10 slot machines, then exchanging tokens for U.S. currency at the casino cage. After they left, officials shut down the machines and checked the tokens inside. They found fake tokens. On Dec. 28, after continued observation, the two were arrested. In addition to the tokens in Colavecchio's car, police found $8,000, a gun and records of counterfeit tokens cashed at other casinos. Both made bail and were released last week. Their lawyer, James E. O'Neil - Rhode Island's former attorney general - said he could not comment on the case. The U.S. Secret Service and New Jersey state police, continuing their investigation, have said they want to determine whether Colavecchio and Ulrich were merely passing the tokens themselves, or whether they sold them to others. Officials said the investigation was focused on the two Rhode Islanders, but did not rule out the possibility of other arrests. Last week, Secret Service agents and New Jersey state police drove up to the storefront on Mineral Spring Avenue in an unmarked white van to cart away more evidence. After taking more photos, rifling through boxes and files, and ordering pizza from down the road, they finished their work. They took the evidence. And left the pizza box behind. |
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The FBI, Secret Service, three state police agencies and Providence police took inventory at Colavecchio's Providence operation. The government had to rent two storage facilities to store all the loot that was seized.
Everyone took their turn arresting Colavecchio. He hired a former Rhode Island attorney general as his lawyer. Foxwoods and Mohegan Sun acknowledged finding a total of at least $50,000 in fake tokens. Investigators borrowed microscopes from local high schools to inspect mounds of tokens. It took them weeks just to determine that Colavecchio hit one Mohegan Sun jackpot for $2,000. Colavecchio ended up in a conference room and getting VIP treatment at Mohegan Sun. His lawyer had worked out a deal. Colavecchio showed law enforcement how he did the job, and promised to help the casino tribes and the state ward off any future raids. They say he was a hero in Providence as well. Colavecchio served a short sentence and did not "rat out" any of his friends. |
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Fans of real-life gambling stories may be wondering exactly how professional poker player Phil Ivey and a sharp-eyed accomplice are alleged to taken advantage of subtle variations in the playing cards being used at New Jersey’s Borgata Hotel Casino & Spa. The cards themselves, along with the card-identification technique called “edge sorting,” rest at the heart of a civil fraud lawsuit filed by the Borgata last week against Ivey and three other parties.
As we reported in our previous feature on the unfolding Borgata-v-Ivey case, Ivey played a variation of high-stakes baccarat at the Borgata on four different occasions betweem April and October of 2012, winning more than $9.6 million overall. As that fourth and final session concluded, Ivey was publicly identified as being involved in a big-money dispute with another major casino, London’s Crockfords Casino, involving another form of baccarat and what later turned out to be very similar edge-sorting allegations. While court documents in the British case filed by Ivey against Crockfords have never been made public, last week’s lawsuit by the Borgata against Ivey contains an exact image of the “full bleed” card design being used on the card decks at the Borgata’s high-stakes baccarat tables. The cards were manufactured by a Missouri cardmaker, Gemaco, which is one of several major card manufacturers serving the gaming industry. Gemaco and an unnamed “Jane Doe” employee of the company are also named in the Borgata lawsuit, as part of the inference made in the Borgata’s assertions that only because the cards were defective that Ivey and his companion, a sharp-eyed woman named Cheng Yin Sun (also named with Ivey in the Borgata suit), were able to identify them and cause them to be manipulated for identification purposes. I'll put the link up, if anyone's interested, to see Iveys edge. http://www.flushdraw.net/misc/borgata-v-phil-ivey-alleged-edge-sorting-explained/ |
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Fred Smith, then an undergraduate at Yale University, wrote a paper for
an economics class that proposed overnight delivery service in which one carrier is responsible for a piece of cargo from pick-up through delivery. To accomplish that, the carrier needs to fly all of its own airplanes, operate its own depots, posting stations, as well as delivery vans. At the time, cargo shipment was handled by a chain of companies – the journey of a box would include being picked up by a local agent, flown by an airline’s cargo department then handed over to a local van company for delivery so Smith’s idea was unorthodox, and he got a grade of "C" for that paper. The professor wrote: "The concept is interesting and well-formed, but in order to earn better than a ‘C’, the idea must be feasible." Despite his professor’s lack of encouragement, Smith held on to the idea and founded Federal Express in the early 1970s. In 1973, the company carried its first load of 186 packages … and immediately ran into financial troubles. Beset by rapidly inflating fuel prices and other costs, FedEx was bleeding money. FedEx had only $5,000 in its checking account, and faced a $24,000 jet fuel bill. After he was turned down for a loan by General Dynamics, Smith took his last $5,000, flew to Las Vegas and played blackjack. He won $27,000 – enough to pay the fuel bill and operate for another week. Smith’s partner Roger Frock recounted the experience: I said, "You mean you took our last $5,000– how could you do that?" He shrugged his shoulders and said, "What difference does it make? Without the funds for the fuel companies, we couldn’t have flown anyway." Fred’s luck held again. It was not much, but it came at a critical time and kept us in business for another week." Shortly afterwards, Smith was able to secure more loans and FedEx rode out its bumpy early days. Today, FedEx carries up to 17 million packages on its busiest day and is worth about $28 billion. Fred Smith himself is worth about $2 billion. |
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Phil's not letting the 'edge sorting' cases hinder him.
Before the start of the World Series of Poker, Daniel Negreanu went on Twitter and offered an even-money bet that he or Phil Ivey would win a bracelet this summer. Anyone who wagered against the duo lost late Friday. “There’s gonna be a lot of broke people in the poker world,” fellow pro Mike Matusow declared. Ivey won the $1,500 buy-in Eight-Game Mix event in front of a large crowd at the Rio Convention Center, besting 484 other players to earn his 10th WSOP gold bracelet and ensure he and his friend will collect on “The Bet.” Ivey is now tied with Doyle Brunson and Johnny Chan for second on the all-time bracelet winners’ list behind only Phil Hellmuth (13). Ivey was presented his bracelet by WSOP executive director Ty Stewart, who noted that Ivey’s 10th victory came during the WSOP’s 10th year at the Rio. “Doyle is one of my poker idols,” Ivey said. ” When I first came to Vegas and started playing in the big games, him and Chip (Reese) were guys that I looked up to playing poker. Of course it’s meaningful tying him.” The victory marked Ivey’s first bracelet in a WSOP event in Las Vegas since 2010. His most recent bracelet prior to Friday came in the $2,200 buy-in Mixed Event at the 2013 World Series of Poker Asia Pacific. Ivey put up the majority of the money to cover Negreanu’s public wager, and he reportedly will earn at least $200,000 on the side bet in addition to the $167,332 first-place prize. “It was really interesting because I wanted to win for Daniel,” Ivey said. “He doesn’t really step out there and make big bets too often, so I knew he was really rooting hard. It was a different kind of feeling. I really wanted to bear down and try to win for him.” Bruce Yamron of Naples, Fla., finished in second place and collected $103,375. Yamron held a slight chip lead at the start of heads-up play, but it took Ivey only 20 minutes to steamroll his longtime acquaintance. “We’ve been friends a long time. I started playing in Atlantic City with him 15 years ago,” Ivey said. “He’s just a great guy.” Dan Heimiller of Las Vegas, who won the $1,000 buy-in Seniors No-Limit Hold’em Championship this month, was third. Negreanu, meanwhile, finished ninth as he made a run at winning the side bet on his own. “(Negreanu) had a couple opportunities late. I had almost no opportunities,” said Ivey, who cashed for only the third time during this WSOP. “Me and him were down here pretty deep in this tournament. This was a very good opportunity. “The tournaments are dying down and there’s not too many left, so I knew I had to get this one or else it’s going to be pretty tough from here.” |
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Superb thread gents, thanks
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Jack Straus once said, "If they had wanted you to hold onto money they would have made it with handles on." That pretty much sums up Straus's attitude towards life in general; he was a gambler.
Nicknamed "Treetop" for his imposing 6'6" stature, he was born in Texas in 1930. As a young man, Jack played basketball while attending Texas A&M and eventually graduated with a degree in business administration. Straus began a career as a teacher but it wasn't long before gambling took center stage in his life. Straus honed his chops on the road, like most card players in the days before legalized gambling and casinos. Over the years, Treetop played against some of the best poker players in the U.S. and earned the respect of many, including Doyle Brunson, Johnny Moss and Amarillo Slim Preston. Indeed, Straus had gamble in his blood. During his relatively short career he made a habit of wagering on anything and everything; he bet every penny he had on the 1970 Super Bowl and won. After Las Vegas replaced the Texas/Oklahoma road game circuit as the best place for a professional poker player to earn a living, Straus made the move. Another transition he was forced to make at this time was from cash games to tournaments. Treetop, a fearless bluffer and ultra-aggressive player, had a tough time adjusting to the more conservative style of play needed to overcome the large tournament fields. Despite winning his first WSOP bracelet in 1973, Straus knew his strategy was better tailored to short-handed cash games. Straus continued to play tournaments however and won the World Series Main Event in 1982. As if winning this prestigious event wasn't noteworthy enough, Straus did it in a way that gave birth to one of the most quintessential poker sayings of our time; "A chip and a chair." Although there is some question as to the exact sequence of events that led to Jack being left with only one chip, it is generally accepted that some variation of the story is true. Being the aggressive player that Straus was he often found himself moving in on players at the slightest sign of weakness. Not surprisingly, this lead to Straus being busted out of tournaments on a regular basis. During the 1982 Main Event, this was exactly what happened, except for one thing. As Jack got up to leave he noticed that there was one errant chip that had not made it into the middle with the rest of his stack. This is where there is some contention with the facts, since many believe it unlikely that Jack would be allowed to proceed. After all, he had been all-in on the previous hand and the chip, hidden or not, would rightfully belong to the winner of their all-in confrontation. Regardless, the tournament staff let him keep playing and, to the chagrin of the rest of the players in the event, he came back from that single chip and won the championship. Although Treetop earned his place in the poker history books by becoming the 1982 WSOP Champion, there is another story for which he is equally well known. Considered by many to be the greatest bluff of all time, Straus is fondly remembered for the creativity and fearlessness he exhibited on this day. Playing in a No-Limit Hold'em cash game, Straus was running good and decided to keep it going when he raised the pot pre-flop with a 7-2 off-suit. Called by one player and going into the flop heads-up, the board came 7-3-3. Catching a seven and not figuring his opponent for a deuce, Straus bet out. Unfortunately, his opponent came over the top with a substantial raise. Knowing his opponent to be a tight player, Jack put him on an overpair and knew he was probably behind in the hand. However, considering the money he had already invested in the pot, Jack thought he may be able to represent a big hand like a set and push the other player out after the turn or the river, so he called. The turn was a deuce, giving him two pair but not improving his hand if he was indeed up against an overpair. Displaying his signature aggression, Straus pushed in a big bet, hoping to take down the pot then and there. While the other player contemplated the situation, Jack was becoming increasingly uneasy that his opponent would make the call and have him dominated going to the river. It's impossible to know what was going through Treetop's mind at that moment, but nonetheless he did something then that was both brilliant and almost completely unheard of: He offered to show one of his cards before the other player had made his decision. Jack told him that for $25 he could pick one of his hole cards and he would turn it over. Incredulous, his opponent accepted the offer and after flipping him a $25 chip, pointed to the card he wished to see. Straus flipped over the two which caused the other player to go back in the tank again, trying to understand why Straus would do such a thing. Eventually he came to the conclusion that the only way Jack would pull a stunt like this was if both his cards were in fact deuces, giving him a full house. By offering to show either of his cards he would have known his opponent would see a two and perhaps be lured into making the call. His opponent folded and Straus took down the monster pot. It has been said that Straus took a risk by allowing his opponent to pick a card since there was a fifty-fifty chance he would have chosen the seven. In fact, the move would have worked precisely the same way if he had chosen the seven. Seeing the seven on the board would have put him to the same question; does Treetop have a wired pair which would make him a full house? Nevertheless, it took a unique mind to formulate such an outlandish ploy and an iron constitution to execute it. Jack was a risk-taker and a thrill-seeker both on and off the felt. Having admired the work of Ernest Hemingway, he had a fondness for hunting and marksmanship. On one trip to Africa, Straus was successful in taking down a lion and took the animal's paw as a trophy. He had the souvenir inscribed with the motto, "Better a day as a lion than a hundred years as a lamb," and wore it on a chain around his neck. Jack Straus suffered a heart attack in 1988 while doing what he loved most, playing poker. He was inducted into the Poker Hall of Fame later that year and will always be remembered as one of the greats. |
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Harry Findlay begins to tell the story of Big Fella Thanks, which is the story of his sporting life.
It goes back to the National Coursing Championships at Clonmel in Co Tipperary 11 years ago. Findlay owned a brilliant bitch named after his daughter, Jade’s Dilemma. It was 7/1 on to win the Oaks final, they had booked a hotel for the celebration but Jade’s Dilemma got beaten in a desperately tight finish. Harry owned the dog in partnership with Michael “Curley” O’Driscoll from Co Cork, whose brother Denis trained the bitch. They called off the party, Curley was due to travel home with two Skibbereen friends, the former Cork football star Mick McCarthy and his best friend, Jack Pat Collins. But Curley decided he wanted a drink before travelling, his two mates wanted to eat. They dropped him at a pub, travelled on to the next roundabout, were involved in a crash and both were killed. Harry knew them well, understood how loved they were in Skibbereen and wondered if he could find a dog for Denis O’Driscoll to train, one that would win the National Coursing Derby. If he did, it would be a tribute to the memory of the two lads. He heard of a great big white dog in the north and asked his Derry friend, Martin McDaid, to make inquiries. Anthony O’Connell, from Newry, owned the dog and wasn’t inclined to sell. McDaid told him the story of what happened in Clonmel. What he said to McDaid was that if ever he did sell, Findlay would be given the chance to buy him. “I rung Anthony,” says Harry, “told him what had happened to Mick and Jack Pat travelling home from Clonmel and what it would mean to Skibbereen to have the Derby winner trained by Denis O’Driscoll.” Nineteen thousand was what O’Connell wanted for the greyhound. Harry had his chance. “I lived in Sheffield at the time, my bank was in Chester-field and I had flight booked to Australia that left in 36 hours. So off I went, got the money, got to Ireland, drove to Newry and bought Big Fella Thanks.” He was 4-1 ante-post favourite for the Irish Coursing Derby four months away but by the day of the final, against just one other dog, you could still back him at 3-1. His opponent, Toy Razor, was 1-4 and considered unbeatable. Harry Findlay never felt as he did that afternoon. “Before the semis, I just broke down. I went behind the stand, cried a little and then threw up. I don’t believe in God or religion but before the final, which I didn’t think Big Fella could win, I looked up at the clouds and thought, ‘If there’s anyone up there, if there is anything you can do to let Big Fella win, please, please do it’.” It was the last coursing Derby of the 20th century and, as Harry Findlay tells it, the greatest race of the century. First Big Fella got his nose in front, then Toy Razor’s speed got him into the lead, Big Fella got back to him and stretched a half-length in front, Toy Razor responded and surged past his rival, a long neck in front. Then the most extraordinary thing happened, Big Fella Thanks found something more and accelerated again. It all happened in seconds. Seventeen thousand people watched, many had tears, and when Harry and his wife, Kay, drove into Skibbereen the next evening, bonfires blazed outside the town. Big Fella Thanks went on to win 31 consecutive races and when he retired, Harry brought the dog back to England and made a bed for him in his office. He’s old now, Big Fella, he has cancerous tumors all over his body and when he got an awful virus six months ago, Harry was sure the dog was gone. On the night he expected him to go, Harry stayed with him. At 1am, Harry went to make a cup of tea. On his return, Big Fella wasn’t there. Harry woke Kay. They knew the dog had gone outside to find somewhere quiet to die. “We’ve got to find him,” Kay said. They woke Bradley and the three of them went into the pitch dark. Bradley found Big Fella in a little cave, behind bushes at the side of the house. They dragged him out and lifted him onto an old mattress in the warm boot room. The next morning there was blood everywhere, the fever had raged through the night but, remarkably, the dog was still alive. He recovered and now he’s back in the office, listening to Harry forever telling him he’s a legend. It is Thursday morning and like every other day, it begins with Harry taking Big Fella for his walk. Of course, it is more than that because this greyhound reminds Harry of what it is about life that he loves. |
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http://www.youtube.com/watch?v=WR2NYR64P2M
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A poker player was sentenced to two years in prison after using infra-red contact lenses and cards marked with invisible ink to win games.
The high-tech scam saw Stefano Ampollini, a 56-year-old Italian nicknamed ‘Parmesan’, rake in up to £60,000 pounds in one night at an upmarket casino in Cannes, on the French Riviera. Describing himself as a ‘player and cheat with an international reputation’, Ampollini told a criminal court in nearby Grasse that he was proud of his ‘work’. He used insiders at ‘Les Princes’ casino to mark cards with the invisible ink, and could then ‘read’ them using the contact lenses, which he bought in China for around £1,800. Ampollini always sat opposite another accomplice, another Italian codenamed ‘The Israeli’, who sniffed or snorted to signal what cards Ampollini should choose. The complicated scam enabled Ampollini to ‘control the game’ without being caught, he said. Marc Concas, barrister for the owners of the casino, said: ‘Security found his behaviour rather strange as he won very easily and, above all, because he folded twice when he had an excellent hand, suggesting he knew the croupier’s cards.’ It was at this point that police were called, and detectives launched an immediate investigation along with casino staff. |
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I wonder how much Sun has actually won from 'edge sorting'
Cheng Yin Sun, who was accused of helping poker pro Phil Ivey “edge-sort” at Atlantic City’s Borgata casino in 2012, is now involved with another legal case, this time against Foxwoods Casino Resort in Connecticut. Sun, along with two other gamblers, Long Mei Fan and Zong Yang Li, are suing Foxwoods for millions. They say that the casino owes them money that they won playing mini-baccarat. The Day reported that Foxwoods has refused to pay because it believes the three cheated, according to the suit filed July 31 in U.S. District Court in New Haven. They say they are owed more than $3 million, which includes their $1.1 million in winnings, along with $1.6 million in gambling front money and other damages. The three gamblers admitted to edge-sorting, which is a technique that will give gamblers roughly a 6.765-percent edge over the house in mini-baccarat. It’s a complicated technique that involves trying to spot asymmetries in the ill-manufactured cards. Basically, the gamblers argue that it isn’t cheating and they are owed the money. “Edge-sorting is possible because some brands of playing cards are not cut symmetrically across their backs and some players are gifted with eyesight keen enough to tell the difference,” the multi-million dollar suit against Foxwoods claimed. It’s the same technique that Ivey and Ms. Sun once used at the Borgata to take that joint for $9.6 million. Unlike Sun’s lawsuit against Foxwoods, Borgata is seeking to recover the millions it paid out to Ivey and Sun. Last month, Ivey’s legal team said that “each and every penny of [Ivey’s] winnings was the result of sheer skill.” Edge-sorting doesn’t involve the gamblers touching the cards in any way, but the lawsuits hinge on figuring out how casino laws and regulations apply to the technique. According to a court document in the Borgata case, Sun is a professional gambler who has been banned from several casinos around the world. She resides in Las Vegas. Sun was also accused of assisting Ivey in an edge-sorting scandal at Crockfords casino in London in or around August 2012. That incident resulted in the casino refusing to pay Ivey and Sun $12.1 million in ill-gotten winnings. Ivey admitted to edge-sorting and has sued the casino for the money. In the Foxwoods case’s court documents, Ms. Sun’s name was spelled “Cheung Yin Sun,” as opposed to “Cheng Yin Sun” in the Borgata case’s court documents. Card Player was told by an attorney for the Borgata that this is indeed the same person. |
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AMID the mundane spreadsheet of dollars, dates and unassuming names, there lies a stark tale of woe.
It's the National Australia Bank account statement linked to maligned racing identity Bill Vlahos; the chief architect of a secretive punters' club dubbed The Edge whose vast fortunes have supposedly vanished into thin air, leaving punters at least $200 million out of pocket. Money goes in. Money goes out. Amounts of cash that would make any bank manager nervous. And all at regular intervals. What is clear is where the deposits emanate from - real estate agents, dentists, business owners, Melbourne identities, ordinary suburban couples - those with a thirst for a bet who were unable to resist the temptation of a punting club reportedly seeing 80 per cent annual returns. Such punters have potentially lost millions. Some recklessly sank their life savings into the club. Others re-mortgaged their homes to chip in some cash. What is not clear, and is the subject of NSW Supreme Court action, is where the copious amounts of withdrawals went. Hundreds of millions of dollars vanished in a plethora of internet transfers that don't stipulate a destination. Mr Vlahos, a psychologist by trade who emerged in recent years as serious buyer of yearlings with his BC3 Thoroughbreds, had maintained the withdrawals were being funnelled into a Westpac account which he shared with mysterious Dubai-based acquaintance Daniel Maxwell. He even emailed screen shots of the account to anxious punters proving there was, at times, in excess of $170 million tucked away. But that account, as Mr Vlahos admitted in court last week, does not exist. He says he doesn't know why; giving the semblance that he too has been duped. But sources have confirmed to The Daily Telegraph that those screen shots of the Westpac account are fake. An entry at the top of page nine of the NAB bank statement will no doubt be the key in the NSW Supreme Court battle between Mr Vlahos and a group of US investors collectively known as Aloga. Aloga's investors stand to lose $26 million in the collapse of The Edge punters' club and are taking up the fight on behalf of hundreds of equally aggrieved punters. On January 23 this year, a deposit of $112 million was made into the NAB account linked to Mr Vlahos from Daniel Maxwell. On the very same day, the $112 million was transferred internally to an unnamed account. It is a fact that should bring some cheer to punters and investors who are substantially out of pocket. The money, at least $112 million, has not been squandered, or evaporated in a Ponzi scheme. It's out there, somewhere; it's real; and it is now the focus for forensic accountants. What they don't have at their disposal is Mr Vlahos' laptop and dongle, which he used to access his accounts. Those items were burnt to a crisp in the alleged firebombing of his car last Sunday night, just two days before he was to have surrendered them to court. Acting for Aloga, Robert Dick SC told the NSW Supreme Court his simple theory on Thursday. "Analogies of homework could be used sir,'' he said. Those who are out of pocket to Mr Vlahos' empty promises are many and varied. Former Melbourne Football Club President Don McLardy made two known deposits into the NAB bank account on behalf of a syndicate of friends, the biggest being $118,486. That was dwarfed by the $500,000 that Anthony Podesta, the founder of car-leasing company McMillan Shakespeare and 2012 Australian Entrepreneur of the Year, chipped into the club in April. It's been a pretty lean year for the businessman, with his 9.7 per cent stake in McMillan Shakespeare plummeting by $50 million, courtesy of the previous Labor government's proposed upheaval to fringe benefits tax on leased and company cars. Still, $500,000 is small change for Podesta. It is not, however, small change for the army of real estate agents and golfing buddies who loaded up and took the biggest gamble of their lives. One is Buxton Mentone director Wesley Belt, who told the Daily Telegraph he is missing more than $300,000. He has around 50 mates, acquaintances and associates who were investing in The Edge. Collectively, his Melbourne gang is down several tens of millions. He is livid, and his "mate'' Bill isn't returning his calls. "They are all my mates, most of them interested in the horses. We all go to the races together. Together we've lost millions. Some have got one, one and a half, I even know of one guy that has three million in,'' he said. "I pulled out of it for about two years, then stupidly went back in three times. "The first year the dividend was 110 per cent and every year it's been around 80 per cent. Every year except this year when, for the first quarter ever, they had a loss, but this year still would have done 25 per cent.'' Mr Belt's suspicions arose when the terms of withdrawals suddenly changed. Instead of a three-month lockout of funds, punters were told in June they could only withdraw winnings and dividends every six months. Then it changed to 12 months. "As soon as they said that I thought, 'What's going on here?' Vlahos kept saying a major investor had pulled money out and he was below his threshold with the bookmaker, which never made sense to me because the bookmaker had $200 million to punt with. Why?" That major investor was Aloga, which spent the best part of a year trying to withdraw the $26 million the club owed its investors. It first asked for its money at the end of 2012. Three weeks later came the $112 million transfer. It came in, it went out, and Aloga and a myriad of spurned Melbourne investors never saw a cent. |
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In 2005 Bill Vlahos was just another wise guy punter who thought he could beat the system. He couldn’t. He passed himself off as some sort of mathematical guru. He wasn’t.
Vlahos blew his own money and a lot of other people’s before he realised he was getting nowhere. He was good at persuading other people to “invest” in his punting club but he wasn’t good at beating the odds makers. One corporate bookie reckons Vlahos lost about $4 million with his outfit — and big figures with other bookies, too — before the penny dropped. “He was a gold brick,” laments the bookie about the free-spending punter who came out of nowhere. Eventually, Vlahos came up with a lame story that he was going to bet “offshore” because he would get better odds that way. The bookies knew it was nonsense because no one (apart from Australian betting firms set up in Vanuatu) bet week in, week out, on Australian racing. But the “mugs” throwing money at their new best friend Bill didn’t know that. They believed him. After all, he seemed such a nice guy — which, of course, all con men do. Otherwise they couldn’t be con men. It’s hard to know exactly when Vlahos switched to “robbing Peter to pay Paul” — creating a classic Ponzi scheme (named after one set up by Charles Ponzi in the United States in 1920, but in fact old even then. Charles Dickens wrote about such rackets in the previous century). Although Vlahos fancied himself as a mathematician it was his knowledge of human nature that kept money coming his way for almost eight years. He knew enough about psychology to persuade people to let greed overrule caution. The first public glimpse of Vlahos was in 2007, when he played a cameo part in a syndicate that bought the promising colt Pillar of Hercules at a one-horse auction. Racing authorities had forced the sale because it was embarrassingly clear that members of the drug-dealing Mokbel family controlled the horse. Most interest was in the colt, its high-profile trainer Peter Moody and the Mokbel connection, not in the new owners. This was unfortunate, because it turns out that one of them was a convicted criminal who would stay close to Vlahos until he realised “Dollar Bill” had stung him, too. His name is Joe Zaiter and he reckons he sold his house in Sydney and “invested” $100,000 with his “mate”. But Zaiter admits that while he was in jail Vlahos put $50,000 in his wife’s account. Vlahos might have had his reasons to be so generous — he put Zaiter’s name on the ownership papers for a one tenth share of Pillar of Hercules, which sold for $1.8 million at the auction. By chance, or not, Zaiter’s name was slightly misspelt in subsequent reports. There is no proof Zaiter was another “patsy” for the Mokbel brothers, still cashed up in 2007 despite the fact “Fat Tony” was on remand after being arrested in Greece on huge drug charges. But some people have their suspicions, mainly because Zaiter was in jail at the time — and because he didn’t actually pay the $200,000 for his supposed share. The way Zaiter tells it, he was one of “a lot of people” Vlahos knew in Sydney. “I was his mate in terms of entertaining all the people,” he told the Herald Sun. “When Bill comes from Melbourne with some people I would introduce them to some girls, take them to the strip joints … I wanted to show him a good time. “There were trainers, racehorse owners and people from the media all kissing Bill’s arse.” Zaiter also claims he helped Vlahos host members of the punters’ club at races in Dubai, a destination that figures in the rise and fall of “Dollar Bill”. BY early 2010 the dogs were barking about Vlahos and the “secret” punting club he called “The Edge”. In fact, a barrister with racing contacts telephoned racing integrity officers to warn them a scandal was brewing. And at least two bookmakers were privately warning friends and clients against the scheme, which was spreading fast despite — or because of — its supposed secrecy. The Vlahos system’s main claim — the one that hooked the suckers — was what marked it as bogus. That was that the spreadsheets were “cooked” to show he averaged returns as high as 20 per cent. And although the suckers later talked of “Saturday morning” tip sheets, they didn’t actually see detailed spreadsheets until next day: in other words, Vlahos was producing his “results” after races were run and won. The universal truth of betting is that the overwhelming majority of punters lose, a few break even and a tiny elite manipulate the market for a slim percentage profit on huge turnover. No legitimate punter wins big, month after month. If they could, bookmakers wouldn’t take their bets. But Vlahos had found people wanting to believe that he could do the impossible — and they in turn found others eager to jump on. Meanwhile, Vlahos was threatening to sue if he was pursued and identified. He was a difficult target — a self-described “psychologist” and former accountant who appeared to have plenty of connections and no convictions. In the second version of the club he set up, he didn’t duck publicity — he exploited it. Vlahos came up with a new front — a bloodstock enterprise, BC3 Thoroughbreds, which was nearly as legitimate as any horse dealing enterprise is. BC3 was a “concept” he’d supposedly bought from two American “pinhookers” — a colourful pair who had for a few seasons picked out weanling and yearling thoroughbreds in North America and developed them into successful racehorses to be sold at a profit. Vlahos started to buy weanlings and yearlings, most of them as slow as any other buyer’s, buying more expensive horses as his credit rating rose. No one knew where his money came from — but while his cheques cleared, no one really cared. The fact was that every time he was pictured holding a high-priced horse, it was a free advertisement for his cash cow. Behind the scenes, the punting club was growing bigger than ever. It was simple psychology: pay big money for horses and why would anyone question your “success” or your credit? And encourage “clients” to keep it “secret” so only a supposedly select few would profit. Vlahos’s psychology qualifications might have been as suspect as everything else about him, but he knew precisely how to exploit greed and vanity and how to fake “exclusivity”. What punting club “investors” didn’t realise was that their money was paying for the horses and a lavish lifestyle and that one day the music would stop. When it did, most of them wouldn’t have a chair. THE wonder is not that the Vlahos scheme crashed but that it lasted so long. In various forms, it had been around about seven years when ominous cracks started to appear in early 2013. The scheme had to keep attracting new money to maintain the illusion of deep pockets and an infallible betting system. Everyone loves a winner and the next best thing to being one is to play the part, which sums up Bill Vlahos’s greatest talent. One way to do that was to bid $5 million for Black Caviar’s half-brother at the Sydney Easter yearling sales. Most buyers like buying as cheaply as they can but Vlahos did a strange thing — he predicted he’d pay the record $5 million for a colt that some shrewder judges of horseflesh thought was worth maybe $3 million, and that some didn’t fancy at all. Of half a dozen veterinary surgeons inspecting yearlings for clients, only Vlahos’s vet did not discount the colt because of slightly suspect legs. Even Black Caviar’s little brother should need perfect joints to make a record price, because a racetrack failure has little future as a stallion. Yearlings that “fail” leg X-rays can make fools of cautious vets — but are usually bought far more cheaply than they otherwise would be. Not this one. Vlahos’s extravagant bidding might have shored up confidence in him among outsiders — but hard-nosed racing people started questioning the source of BC3’s funds. The same insiders who had warned against Vlahos in 2010 again wondered about his ability to spend so big without any visible means of support. It looked as if he were defying gravity. It reminded some of Mike Bastion, the high flyer who had jumped (or was pushed) to his death from a Hong Kong high-rise building in March 2000 after his Ponzi scheme collapsed, owing $35 million. Bastion had lured smart racing people into investing cash in a share market scam. Vlahos reversed it — luring outsiders into a race betting scam. Each relied on greed and ignorance outweighing caution. “Investors” believed the quarterly statements that made them appear wealthy on paper but when they started trying to withdraw money it all began to unravel. At the first sign that Vlahos was juggling money to pay people in dribs and drabs, others caught a whiff of trouble and demanded theirs, too. By midyear it had turned into a “run” on the club’s funds. There were a lot more unhappy suckers than there was money to pay them. That might explain why Vlahos spent several months overseas, mostly in Singapore, although he apparently took key group leaders of his club on jaunts to Dubai, reputedly accompanied by strippers he had on the payroll. By making sure each group leader was “on side” and paid handsome “dividends”, Vlahos ensured they would assure friends and relatives in the club that their money was safe. Vlahos returned to Australia before the Spring Carnival. He presumably did not realise that a Supreme Court action by a group of overseas investors to recover $26 million would lead authorities to seize his passport. He was trapped near a lot of people who wanted their money. When Vlahos appeared in court in Sydney on the first Friday of December, he told an incredulous judge that “$194 million” in a Westpac account had “vanished”. He suggested it had been taken by a mysterious associate in Dubai called “Daniel Maxwell”. But when the Herald Sun sent a reporter to the Dubai address Vlahos had given no one had heard of Maxwell. Earlier, when punters were chasing their cash, Vlahos conjured a tragic story that Maxwell’s six-year-old daughter had slipped, hit her head on the pool ledge and drowned. It was a lie. He knew what people wanted to hear and matched the message to the personality. “Bill was physically shaking and crying, but now I think Maxwell did not exist,” one punter said. By last November the fairy story of Black Caviar’s little brother “Jimmy” had also turned sour. The colt had allegedly been bitten by a white-tailed spider and was fighting for life. News that the $5 million colt was being treated at the Werribee equine hospital raised eyebrows, then alarm bells. Spider bites are not unknown but extremely rare with horses. The odds against the blue blood colt being bitten were huge. Whatever the cause of the infection that followed the supposed bite, it required strong antibiotics that affected the colt’s gut and caused acute laminitis, which eventually led to his being put down just after Christmas. This led to wild speculation Vlahos had orchestrated the horse’s death for the insurance. The colt’s death upset more than animal lovers — several would-be owners had handed over hundreds of thousands of dollars but now found their names were not on the horse’s papers because he hadn’t been paid for. Their money had disappeared. By the time Jimmy died, Vlahos was on the nose and on the run. His world had collapsed on December 8, a quiet Sunday night, after a bizarre episode at the property BC3 Thoroughbreds ran at Connewarre near Geelong. At dawn next day the story broke that Vlahos had been assaulted by unknown men and his utility had been “torched”. Sceptical police quickly concluded his slight injuries were self-inflicted and that his garbled story of “Lebanese” or “Croatians” assaulting him was bogus. As for his burnt-out ute, a farm worker told police the jerry can of fuel left next to the smouldering wreck came from a shed on the farm. The laptop holding all the punting club figures had burned with the car. This was convenient, as Vlahos was due to produce the records in court that week. Now they had gone the same way as the phantom Maxwell and the “vanished” $194 million. As the new year began, questions about “Dollar Bill” piled up. A couple still stand out. Who is Bill Vlahos and where is he hiding? And why did so many smart people believe him? |
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Crockfords casino accuses Phil Ivey of cheating by using the "edge-sorting technique" in card game punto banco.
Mr Ivey, considered one of the best poker players in the world, is suing the Mayfair casino for £7.7m, saying the technique is lawful. He told the High Court in London: "I would never cheat in a casino." Edge-sorting involves studying cards for imperfections. The 38-year-old American played punto banco - a form of the card game baccarat - over two days in August 2012. He was told his winnings would be wired to him, but they never arrived. His stake of £1m was returned. Legitimate strategy? The club argues the use of edge-sorting is not a legitimate strategy. Genting Casinos UK, which owns Crockfords, says Mr Ivey's conduct defeated the premise of the game, meaning there was no gaming contract. But he told the court the strategy was legitimate. Mr Ivey said: "I consider that I would not be doing my job very well if I did not seek to use to my benefit weaknesses that I identify in the way that casinos set up or offer particular casino games. "I use a variety of strategies whilst playing in casinos. No system is fail-safe and each time I play I risk failing to execute the strategy properly - some of these are very complex or difficult to execute - which usually results in me losing a lot of money. 'Unjustly treated' "I consider all the strategies I use to be lawful and I would never cheat in a casino. It is not in my nature to cheat and nor would I risk my reputation by acting unlawfully in any manner." Mr Justice Mitting, who is hearing the case, has been told by Mr Ivey's counsel, Richard Spearman QC, that the casino's case was "plainly unsustainable". Phil Ivey Mr Ivey is considered one of the best poker players in the world He said edge-sorting involves nothing more than using information available to any player from watching the backs of the cards and making requests on the manner in which play is conducted. Mr Ivey added: "We observe the unwritten doctrine: how do I find a legal way to beat the house? Any method that could amount to cheating would breach the doctrine and cause you to be ostracised by your fellow players - we are all very careful to stay the right side of the line and we discuss advantage play strategies at length." 'Substantial winnings' He said he was angry when the casino refused to pay out. He told the judge: "I am highly successful in my job as a poker player and professional gambler and I would never do anything to risk my reputation. "My integrity is infinitely more important to me than a big win, which is why I have brought these proceedings to demonstrate that I have been unjustly treated." Mr Ivey also told the court he had used the technique in Australia and the United States with friend Cheung Yin Sun, who had introduced him to the strategy in 2012 and who he calls by her English name "Kelly". He said: "We won substantial sums of money doing so and we also lost substantial sums along the way when we got the strategy wrong or were not able to execute the sorts because of effective casino game protection methods. "At all times when edge-sorting, I considered that Kelly and I were playing lawfully and it never occurred to me that edge sorting could ever be viewed as an unlawful strategy. I continue to believe that it is lawful." The case is expected to finish next week. |
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Phil Ivey v Crockfords is all over, and Ivey, who isn’t often a loser when it comes to gambling, finds himself in that position today. The High Court in London found in favor of Crockfords Casino in Ivey’s edge sorting case, saying that the casino was not obligated to pay Ivey the winnings he accrued through his high-stakes baccarat advantage play.
Judge John Mitting found that Ivey’s method of winning at baccarat amounted to cheating under civil law. The case dates back to August 2012, when Ivey won £7.7 million ($12.38 million) in high-stakes baccarat games over the course of two visits to Crockfords. While the casino gave Ivey back his initial stake, they refused to pay him his winnings, and the two sides failed to reach a settlement outside of court. Cheating, Even If Ivey Didn’t Realize It While Judge Mitting acknowledged that Ivey may well have honestly felt that he wasn’t cheating, Mitting still found that his actions did not constitute a legitimate way of playing the game. “He gave himself an advantage which the game precludes,” Mitting said after the conclusion to the trial. “This is in my view cheating.” Both the casino and Ivey agree on the events that took place, with the only dispute being whether those events were legitimate gambling activities or a method of cheating. Ivey and an accomplice played a form of baccarat known as punto banco at a private table in the casino. By getting the casino to use a brand of cards known to have imperfections in its cutting pattern, and then getting a dealer to turn some of those cards for supposedly superstitious reasons, Ivey was able to tell from the card backs whether a given card was high or low. That wasn’t enough to guarantee that Ivey would know the outcome of each hand. However, it did give him a significant advantage over the casino by helping him determine whether he should bet on the banker or player on each hand. Ivey said this was a complex but legitimate advantage play; the casino saw it as simple cheating. Crockfords “Vindicated” By Ruling “We attach the greatest importance to our exemplary reputation for fair, honest and professional conduct and today’s ruling vindicates the steps we have taken in this matter,” Crockfords said in a statement. Ivey, on the other hand, expressed disappointment at the ruling. “It is not in my nature to cheat,” Ivey said through a spokesman. “I believe what we did was nothing more than exploit Crockford’s failures. Clearly the judge did not agree.” The ruling may have hinged on exactly how far Ivey had to go to exploit those failures. Mitting pointed out that Ivey gained his edge “by using the croupier as his innocent agent or tool,” essentially getting the dealer to help him work around the normal procedures of the game without realizing it. Crockfords also expressed disappointment that the case caused them to discuss their business with Ivey in public. “It is our policy not to discuss our clients’ affairs in public and we very much regret that proceedings were brought against us,” a spokesperson for the casino said. While Ivey was not given permission to immediately able to appeal the ruling, his lawyers will be able to renew their efforts with the Court of Appeals. |
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John Kane was on a hell of a winning streak. On July 3, 2009, he walked alone into the high-limit room at the Silverton Casino in Las Vegas and sat down at a video poker machine called the Game King. Six minutes later the purple light on the top of the machine flashed, signaling a $4,300 jackpot. Kane waited while the slot attendant verified the win and presented the IRS paperwork—a procedure required for any win of $1,200 or greater—then, 11 minutes later, ding ding ding!, a $2,800 win. A $4,150 jackpot rolled in a few minutes after that.
All the while, the casino's director of surveillance, Charles Williams, was peering down at Kane through a camera hidden in a ceiling dome. Tall, with a high brow and an aquiline nose, the 50-year-old Kane had the patrician bearing of a man better suited to playing a Mozart piano concerto than listening to the chirping of a slot machine. Even his play was refined: the way he rested his long fingers on the buttons and swept them in a graceful legato, smoothly selecting good cards, discarding bad ones, accepting jackpot after jackpot with the vaguely put-upon air of a creditor finally collecting an overdue debt. Williams could see that Kane was wielding none of the array of cheating devices that casinos had confiscated from grifters over the years. He wasn't jamming a light wand in the machine's hopper or zapping the Game King with an electromagnetic pulse. He was simply pressing the buttons. But he was winning far too much, too fast, to be relying on luck alone. At 12:34 pm, the Game King lit up with its seventh jackpot in an hour and a half, a $10,400 payout. Now Williams knew something was wrong: The cards dealt on the screen were the exact same four deuces and four of clubs that yielded Kane's previous jackpot. The odds against that were astronomical. Williams called over the executive in charge of the Silverton's slots, and they reviewed the surveillance tape together. The evidence was mounting that Kane had found something unthinkable: the kind of thing gamblers dream of, casinos dread, and Nevada regulators have an entire auditing regime to prevent. He'd found a bug in the most popular video slot in Las Vegas. As they watched the replay for clues, Kane chalked up an eighth jackpot worth $8,200, and Williams decided not to wait any longer. He contacted the Silverton's head of security, a formidable character with slicked-back silver hair and a black suit, and positioned him outside the slot area. His orders: Make sure John Kane doesn't leave the casino. Virtuoso pianist John Kane discovered an exploitable software bug in Game King poker machines. MICHAEL FRIBERG Kane had discovered the glitch in the Game King three months earlier on the other end of town, at the unpretentious Fremont Hotel and Casino in downtown's Glitter Gulch. He was overdue for a lucky break. Since the Game King had gotten its hooks in him years earlier he'd lost between tens of thousands and hundreds of thousands annually. At his previous haunt, the locals-friendly Boulder Station, he blew half a million dollars in 2006 alone—a pace that earned him enough Player's Club points to pay for his own Game King to play at his home on the outskirts of Vegas, along with technicians to service it. (The machine was just for fun—it didn't pay jackpots.) “He's played more than anyone else in the United States,” says his lawyer, Andrew Leavitt. “I'm not exaggerating or embellishing. It's an addiction.” To understand video poker addiction, you have to start with the deceptively simple appeal of the game. You put some money in the machine, place a bet of one to five credits, and the computer deals you a poker hand. Select the cards you want to keep, slap the Draw button, and the machine replaces the discards. Your final hand determines the payout. When the first video poker machine hit casinos in the 1970s, it was a phenomenal success—gamblers loved that they could make decisions that affected the outcome instead of just pulling a handle and watching the reels spin. The patent holder started a company called International Game Technology that debuted on the Nasdaq in 1981. IGT's key insight was to tap into the vast flexibility offered by computerized gambling. In 1996, the company perfected its formula with the Game King Multi-Game, which allowed players to choose from several variations on video poker. Casinos snatched up the Game King, and IGT sold them regular firmware upgrades that added still more games to the menu. On September 25, 2002, the company released its fifth major revision—Game King 5.0. Its marketing material was triumphal: “Full of new enhancements, including state-of-the-art video graphics and enhanced stereo sound, the Game King 5.0 Multi-Game suite is sure to rule over your entire casino floor with unprecedented magnificence!” But the new Game King code had one feature that wasn't in the brochure—a series of subtle errors in program number G0001640 that evaded laboratory testing and source code review. You might also like: How Google Map Hackers Can Destroy a Business at Will Middle-School Dropout Codes Clever Chat Program That Foils NSA Spying The World’s Best Bounty Hunter Is 4-Foot-11. Here’s How She Hunts The bug survived like a cockroach for the next seven years. It passed into new revisions, one after another, ultimately infecting 99 different programs installed in thousands of IGT machines around the world. As far as anyone knows, it went completely undetected until late April 2009, when John Kane was playing at a row of four low-limit Game Kings outside the entrance to a Chinese fast food joint at the Fremont, smoke swirling around him and '90s pop music raining down from the casino sound system. He'd been switching between game variations and racking up a modest payout. But when he hit the Cash Out button to take his money to another machine, the candle lit at the top of the Game King and the screen locked up with a jackpot worth more than $1,000. Kane hadn't even played a new hand, so he knew there was a mistake. He told a casino attendant about the error, but the worker thought he was joking and gave him the money anyway. At that point, Kane could have forgotten the whole thing. Instead, he called a friend and embarked on the biggest gamble of his life. Even before the phone rang in his suburban Pittsburgh home, Andre Nestor had a gut feeling that everything was about to change for him. Superstitious and prone to hunches, he'd felt it coming for days: April 30, 2009, would be exactly 15 years since Nestor ignored an urge to play a set of numbers that came up in the Pennsylvania lottery Big 4. That was the story of his life—always playing the right numbers at the wrong time. Games of chance had been courting and betraying Nestor since he was old enough to gamble. In 2001 he'd moved to Las Vegas to be closer to the action, answering phones for a bank during the day and wagering his meager paycheck at night. That's when he met John Kane in an AOL chatroom for Vegas locals. Though Nestor was 13 years younger than Kane and perpetually flirting with poverty, they developed an intense addicts' friendship. Nestor's records show he lost about $20,000 a year for six years before he gave up, said good-bye to Kane, and moved back to the sleepy Pittsburgh suburb of Swissvale, Pennsylvania, in 2007. For about two years he had a stable life, living off public assistance, gambling infrequently, and playing the occasional lottery ticket. Then Kane called to tell him about a bug he'd found in video poker. Nestor drove to the airport that night and camped there until the next available flight to Las Vegas. Kane picked him up at the curb at McCarran airport. After a quick breakfast, they drove to the Fremont, took adjacent seats at two Game Kings, and went to work. Kane had some idea of how the glitch operated but hadn't been able to reliably reproduce it. Working together, the two men began trying different combinations of play, game types, and bet levels, sounding out the bug like bats in the dark. It turned out the Game King's endless versatility was also its fatal flaw. In addition to different game variants, the machine lets you choose the base level of your wagers: At the low-limit Fremont machines, you could select six different denomination levels, from 1 cent to 50 cents a credit. “You had complete control,” Andre Nestor says. “You could win $500,000 in one day.” MICHAEL FRIBERG The key to the glitch was that under just the right circumstances, you could switch denomination levels retroactively. That meant you could play at 1 cent per credit for hours, losing pocket change, until you finally got a good hand—like four aces or a royal flush. Then you could change to 50 cents a credit and fool the machine into re-awarding your payout at the new, higher denomination. Performing that trick consistently wasn't easy—it involved a complicated misdirection that left the Game King's internal variables in a state of confusion. But after seven hours rooted to their seats, Kane and Nestor boiled it down to a step-by-step recipe that would work every time. Nestor and Kane each rang up a few jackpots, then broke for a celebratory dinner, at which they planned their next move. They would have to expand beyond the Fremont before the casino noticed how much they were winning. Fortunately, Game Kings are ubiquitous in Vegas, installed everywhere from the corner 7-Eleven to the toniest luxury casino. They mapped out their campaign and then headed back to Kane's home for the night. Kane lived in a spacious house at the far northeast edge of town. His Game King was in the foyer. A spare bedroom down the hall was devoted entirely to a model train set, an elaborate, detailed miniature with tracks snaking and climbing through model towns, up hills, across bridges, and through tunnels, every detail perfect. The home's centerpiece was the living room with its three Steinway grand pianos. Kane is a virtuoso pianist; in the early 1980s he was a leading dance accompanist in the Chicago area, and even today he sells recordings under the vanity label Keynote Records. He left the professional music world only after failing to advance in the prestigious Van Cliburn International Piano Competition. Now he ran a management consulting practice that claimed one-third of the Fortune 100 as clients. Kane's business was lucrative, so he was accustomed to handling money. But now that they were on the verge of a windfall, he was worried about Nestor; he could see his younger friend returning every cent to the casinos at the roulette tables or blowing it all on frivolities. “If you had a million dollars, what 10 things would you do?” Kane asked him. He wanted Nestor to make a list and really think through his priorities. Nestor started a list, but it would prove unnecessary. After another day at the Fremont, they branched out. To their surprise, the button sequence didn't work. Over the following days, they explored the Hilton, the Cannery, then the Stratosphere, Terrible's, the Hard Rock, the Tropicana, the Luxor, and five other casinos, drawing the same dismal results everywhere. For some reason, the Game King glitch was only present at the Fremont. At the end of a frustrating week, Nestor headed to the airport for his return flight with just $8,000 in winnings. As a final insult, he lost $700 in a video poker machine while waiting for his plane. Kane decided to wring what he could from the four Fremont machines. He learned to speed up the process by using the Game King's Double Up feature, which gave players a chance to double their winnings or lose everything. Respectable payouts that might once have satisfied Kane were garbage now. After five weeks using the new strategy, Kane had pocketed more than $100,000 from the Fremont. Unsurprisingly, the Fremont noticed. In modern casinos, every slot machine in the house is wired to a central server, where statistical deviations stick out like a fifth ace. The four machines under the Chinese food sign shot to the top of the Fremont's “loser list” of underperforming games: They'd gone from providing the casino a reliable $14,500 a month to costing it $75,000 in May alone. On May 25, a slot manager approached Kane after one of his wins and announced that he was disabling the Double Up feature on all of the Game Kings—he was aware that Kane used the option copiously, and he figured it must have something to do with his run of luck. Kane took the development in stride: The bug, not the Double Up, was the real secret of his success. But he was in for a shock. The next time he played the Game King, the magic button sequence no longer worked. In an instant, the Fremont was no better than all the other casinos that had been immune to the glitch. He phoned Nestor, who processed the news. With the Double Up option turned on, the bug worked; turned off, it didn't. Whatever internal stew of code made the Game King exploitable, Nestor concluded, the Double Up option had been a key ingredient the whole time. They just hadn't known it. This wasn't bad news at all. It was the missing link. It explained why the bug had failed them everywhere but at the Fremont. Most casinos don't enable Double Up because it's unpopular with players. But that could easily be changed. High rollers and slot aficionados often have favorite game variants or features that aren't available by default but can be enabled by any passing slot attendant. Nestor purchased two dress shirts and caught another flight to Las Vegas, where he joined Kane at Harrah's. Row after row of Game Kings were waiting, and, true to the plan, the staff didn't hesitate when Kane and Nestor asked for Double Up to be enabled. Nestor got the first significant winning hand of the trip: four fours and a kicker for $500. He tapped the magic sequence, hit Cash Out, and watched with delight as his $500 became a $10,000 jackpot. He tipped the slot attendant $20. There were no limits now. They could play anywhere and beat the house wherever they went. Nestor, who’d been scraping by on a $1,000-a-month welfare check, saw a whole new future unfolding: home ownership, an investment account, security, better clothes, and gifts for his friends back home. For his part, Kane was already well on his way to erasing the massive losses he’d suffered since moving to Sin City. Working as a team had its advantages. While experimenting with the bug, they discovered that they could trigger a jackpot on the same hand more than once: All they had to do was lower the denomination again and repeat the steps to activate the glitch. They could effectively replay their win over and over, as much as they wanted. It was a risky play—even the busiest casino might notice the same player repeatedly winning with the same hand. But now that they were playing together, Kane and Nestor could ride on each other's jackpots. Nestor won $4,000 with four aces; then, after waiting a bit, Kane slid over to the same machine and replayed the hand for another $4,000. They could even piggyback on other players' wins. No longer confined to four low-limit slots at a single casino, they prowled the floor at Harrah's looking for empty machines still showing a player's jackpot. Once they got an attendant to turn on Double Up, it took only seconds to replay the hand at up to 10 times the original value. Video poker wasn't even gambling anymore. “You had complete control over how much you could win,” Nestor says. “If you wanted to go to a casino and win $500,000 in one day, you could win $500,000 in one day.” At the end of the evening, Nestor says they went to his cheap hotel room at Bill's Gamblin' Hall and Saloon to settle up. As the benefactor of Kane's discovery, Nestor had agreed to give his old friend half his winnings. But now that the cash was rolling in, he was having second thoughts about the arrangement. Every jackpot, he realized, was being reported to the IRS, and he'd already won enough from the bug to propel him into a higher tax bracket. If he paid half to Kane off the top, he might wind up without the reserves to pay his tax debt come April of the following year. He broached the subject with Kane: He'd be more comfortable holding on to the money until his taxes were paid. It was just a year. He'd happily give Kane half of his post-tax winnings then. Kane was indignant but not surprised; leave it to Nestor to turn even free money into a problem to obsess over. He insisted Nestor honor his agreement, and Nestor grew more agitated, his voice rising in pitch. “What am I doing? Why am I even doing this?” he complained. “I'm not winning any money doing this if I'm giving you all this up front.” Kane finally agreed to accept a third of Nestor's $20,000 take for the day. Nestor says he counted out $6,000 in hundreds onto an end table, and Kane said good night. The tension between the men lingered the next day at the Wynn, a towering upscale supercasino with more than 1,300 slots. They played side by side, raking in money and continuing to argue over the split. Nestor was now of the opinion that he shouldn't have to pay Kane anything. It was Nestor, after all, who'd figured out that the Double Up feature was part of the bug. That should make them square. “This was my gift to you,” Kane shot back testily. “If you'd found this bug instead of me, you would never have told me about it.” The accusation stung. Nestor gaped at his friend, then he stood and walked away from the machine. The next day Nestor nursed his hurt feelings with a solo trip to the Rio. He found a Game King displaying four aces and a kicker and hit it for $5,600. Then he wandered into the high-limit room and found another four aces. He punched this one twice: $20,000 at a $5 denomination, then, after a decent interval, $8,000 at the $2 level. Nestor's records show that he eventually left the casino with about $34,000 in his pockets. He didn't need Kane at all. “There was so much money to be made, what did it even matter?” he says. On his last day in Vegas, Nestor continued his solo run, hitting a Game King at the Wynn for a combined $61,000. Back in his room at Bill's, he added up his winnings: He was going home with $152,250 in cash in his luggage. And he wasn't done yet. There were casinos in Pennsylvania, too, where he could operate without the slightest risk of Kane knowing what he was up to—or demanding a cut up front. After Nestor left, Kane tore into Vegas with a vengeance. Official numbers have never been released, and Kane declined to speak for this article, but the FBI would later tally Kane's winnings at more than $500,000 from eight different casinos. The Wynn, where Kane kept four nines on one Game King for days, was the biggest loser at $225,240. Back in Pennsylvania, Nestor targeted the newly opened casino at the Meadows Racetrack in Washington County. In contrast to Kane, who played the bug with joyless, businesslike intensity, Nestor was voluble and chatty at the Meadows. He dressed smartly and, according to court documents, brought along a small entourage for company: his roommate, a retired cop named Kerry Laverde; and Patrick Loushil, a server at Red Lobster who agreed to collect some of Nestor's jackpots for him, so they wouldn't all show up on Nestor's tax bill. Nestor hammed it up every time he won, gushing excitedly to the slot workers—“I'm so excited! Here, feel my heart!”—and tipping generously. But it all began to unravel the night Kane found himself waiting for a payout at the Silverton. The casino's head of security stood just outside the slot area. Kane paced and huffed, spun the swivel chair back and forth like a metronome, and complained to passing slot attendants. Finally, three men strode up to him. The head of security directed Kane to an alcove, handcuffed him, and escorted him away from the video poker machines. An armed agent from the Gaming Control Board arrived soon after. He sealed the machines Kane had been playing on with orange evidence tape and collected Kane from the back room, where he'd been handcuffed to a chair. Kane's wallet and the $27,000 in his pocket were confiscated, and he was booked into the Clark County Detention Center on suspicion of theft. After a night in jail, Kane was released. On Monday he called Nestor to warn him that the bug had been discovered. He sounded more upset than nestor had ever heard him. “Stay out of the casinos,” Kane said. “Do not go back to the casinos.” Nestor's heart sank for his old friend. It was painful to imagine Kane suffering the indignity of a night in jail, mug shots, fingerprints, being treated like a common criminal. But after the call, Nestor talked himself into an alternate theory. What if there'd been no arrest? What if Kane suspected—as he must have—that Nestor was using the bug and had made up the story about the Silverton to scare Nestor into stopping, so Kane could have the exploit all to himself? By this time Nestor had been back in Pennsylvania three weeks and had already won nearly $50,000 from the Meadow's Game King. He decided to ignore Kane's story and started planning his next trip to the Meadows. Three days later, in Las Vegas, engineers from the Nevada Gaming Control Board's Technology Division descended on the Silverton. The forensics investigation of the Game King scam had fallen to John Lastusky, a 25-year-old clean-cut USC computer engineering graduate. Lastusky pulled up the game history on the two machines Kane had played and reviewed the wins, then slid out the logic trays, the metal shelves housing the Game King's electronic guts, and checked the six EPROMs containing the machines' core logic, graphics, and sound routines. There was no sign of tampering. He confiscated the logic trays and packed them up for the trip back to headquarters. Housed in an anonymous office park near the airport, the GCB's Technology Division was formed in the mid-1980s to police video gambling as it began its Nevada ascent. The division helps set the rigorous standards that gamemakers like IGT must meet to deploy machines in the Silver State. A 3,000-square-foot laboratory at the back of the office is packed end to end with slot machines in various states of undress—some powered down, some in maintenance mode, others stripped to their bare electronics, though most are configured as they would be on a gaming floor. A smaller, locked-down room adjacent to the lab is more important: It houses a permanent repository of the source and executable code for every version of game software ever approved in Nevada—more than 30,000 programs in all. The code vault is at the center of the gaming board's massive software integrity operation. Every new addition is carefully examined: Is the random number generator random enough? Does the game pay out at the advertised rate? Is there logic where there shouldn't be? “We're not necessarily looking for something nefarious, but the goal is to ensure the integrity of the product,” says division chief Jim Barbee. There's a real, if mostly unrealized, danger of gaming software being backdoored. The concept was proven in 1995, when one of the GCB's own staffers, Ron Harris, went bad. Harris modified his testing unit to covertly reprogram the EPROMs on the machines he was auditing. His new software commanded the machine to trigger a jackpot upon a particular sequence of button presses—like a Konami Code for cash. He was eventually caught, and he served two years in prison. HOW THEY BEAT THE HOUSE The “Double Up bug” lurking in the software of Game King video poker machines survived undetected for nearly seven years, in part because the steps to reproduce it were so complex. John Kane and Andre Nestor experimented until they could trigger it at will. 1. Locate a Game King video poker machine configured for multi-denomination play. If you're in Las Vegas, you're probably already standing next to one. 2. Flag down a slot attendant and ask them to enable the Double Up option. Say thank you and smile until they walk away. 3. Insert money or a voucher and select the lowest denomination level offered by the machine—for example, $1 per credit on a $1, $2, $5, $10 machine. 4. Choose your favorite game variant—Triple Double Bonus Poker is fun—and start playing. 5. Keep playing at the $1 level until you win a big hand. An $800 royal flush is perfect. 6. With your royal flush showing but not yet cashed out, hit the More Games button on the touchscreen and select a different game variation. Play it until you score a win. 7. Insert more money or a voucher into the machine. 8. Touch the More Games button again, and change to the maximum denomination—in this case, $10 per credit. Then return to your original $800 royal flush. 9. Press the Cash Out button. “Jackpot! $8,000” will appear on the screen and the light on the top of the machine will illuminate. Congratulations! 10. Wait for the slot attendant to show up with an IRS form W-2G (“certain gambling winnings”). Once you've signed it, they'll get the machine to spit out a jackpot ticket. BRATISLAV MILENKOVIC That stain on the board's integrity haunts the division to this day. But by all evidence, the division's paranoia, coupled with the game industry's self-interest, have kept video gambling code clean and mostly free of exploitable bugs. That made the Game King case an intriguing puzzle for Lastusky. Armed with the surveillance footage of Kane in action, Lastusky sat at one of the Game Kings in the lab and began experimenting. Within a few days he was able to reliably reproduce the exploit himself. He gave his findings to IGT, which rushed out a warning to its customers advising them to immediately disable the Double Up option. “Replacement programs are being expedited,” the company explained. Every Game King on the planet running a vulnerable version would need a patch. The upgrade process would be grueling. When an operating system like Windows or OS X has a security bug, customers can download the patch in a few minutes over the Internet. Slot machines aren't online. New programs are burned onto EPROMs by the manufacturer and shipped in the mail in plastic tubes. Blind to the firestorm erupting in Vegas, Nestor spent the rest of July and most of August playing at the Meadows, until August 31, when the casino finally got suspicious and refused to pay Nestor on a four of a kind. Nestor protested but walked away, breaking into a run as he reached the parking garage. Nestor was up more than $480,000. The Game King ride was over, but he had enough money to last him forever. At 1:30 pm on October 6, 2009, a dozen state and local police converged on Andre Nestor's split-level condo on a quiet, tree-lined street in Swissvale. He was dozing on his living room couch when the banging started. “State police! Open up!” The battering ram hit the door seconds later, splintering the frame and admitting a flood of cops into the house. Nestor says he started toward the stairs, his hands over his head, when he came face-to-face with a trooper in full riot gear. “Get on the floor!” yelled the trooper, leveling his AR-15 at Nestor's face. Nestor complied. The cop ratcheted the handcuffs on Nestor's wrists, yanked him to his feet, and marched him into the kitchen. For the next two hours, Nestor watched helplessly, handcuffed to a kitchen chair, while the police ransacked his neat home. They flipped over his mattress, ripped insulation from his ceiling, rifled his PC. At about 4 pm, Nestor's roommate, Laverde, arrived home and was arrested on the spot as an accomplice to Nestor's crimes. It was the first major gambling scandal in Pennsylvania since the state had legalized slots in 2004. The media portrayed Nestor as a real-life Danny Ocean, and prosecutors hit him with 698 felony counts, ranging from theft to criminal conspiracy. The district attorney seized every penny of Nestor's winnings and gave it back to the Meadows. Nestor and Laverde spent about 10 days in the county jail before making bail. A defiant Nestor vowed to fight the case—no jury would convict a gambler, he was certain, for beating a slot machine at its own game. But on January 3, 2011, when it was time for jury selection, Nestor was hit with another surprise. Two FBI agents showed up and pulled him from the Washington County courthouse. The Justice Department had taken over the case. Nestor and Kane had both been charged federally in Las Vegas. As the agents walked him to their car, Nestor stopped in front of a television camera and let loose. “I'm being arrested federally now—for winning at a slot machine!” he shouted in disbelief. “This is what they do to people! They put a machine on the floor, and if it has programming that doesn't take your money and you win on their machine, they will throw you in jail!” The Las Vegas prosecutors charged Nestor and Kane with conspiracy and violations of the Computer Fraud and Abuse Act. Passed in 1986, the CFAA was enacted to punish hackers who remotely crack computers related to national defense or banking. But in the Internet age the government had been steadily testing the limits of the law in cases that didn't involve computer intrusion in the usual sense. Kane and Nestor, the government argued, exceeded their otherwise lawful access to the Game King when they knowingly exploited a bug. The casinos only authorized gamers to play by the rules of video poker. “To allow customers to access previously played hands of cards at will, would remove the element of chance and obviate the whole purpose of gambling,” assistant US attorney for the District of Nevada Michael Chu argued in a court filing. “It would certainly be contrary to the rules of poker.” The defense attorneys pushed for dismissal of the computer hacking charge, on the grounds that anything the Game King allowed players to do through its interface was “authorized access” by definition: The whole point of playing slots is to beat the machine, and it's up to the computer to set and enforce limits. “All these guys did is simply push a sequence of buttons that they were legally entitled to push,” says Leavitt, Kane's attorney. The pretrial motions dragged on for more than 18 months, while in the larger legal landscape, the CFAA was going under a microscope for the first time since its passage. In January 2013, coder and activist Aaron Swartz committed suicide after being charged under the same law for bulk-downloading academic articles without permission, spurring calls for reform. Three months later, the US Ninth Circuit Court of Appeals threw out computer hacking charges in a closely watched case against David Nosal, a former executive at a corporate recruiting firm who persuaded three employees to leak him information from the firm's lead database. The Ninth Circuit found that pilfering contacts doesn't become computer hacking just because the data came from a computer instead of a copy machine. Seeing parallels to the Game King prosecution, the judge overseeing Kane and Nestor's case ordered the government to justify the hacking charge. The prosecutors didn't even try, opting instead to drop the charge—leaving only an ill-fitting “conspiracy to commit wire fraud” count remaining. Prosecutors had a weak hand, and they knew it. As a December 3, 2013, trial date approached, the Feds made Kane and Nestor separate but identical offers: The first one to agree to testify against the other would walk away with five years of probation and no jail time. The old gambling buddies had one more game to play together. It was the Prisoner's Dilemma. Without speaking, they both arrived at the optimal strategy: They refused the offer. A few months later, the Justice Department dropped the last of the charges, and they were free. Kane and Nestor haven't spoken since 2009. After his Silverton arrest, Kane began recording classical music in his house and uploading the videos to a YouTube channel. Last March, after the federal case was dropped, he sent a CD of some of his performances to his high school piano teacher. “I'm essentially now retired from a career in business, have remained single, leading a quiet suburban life,” he wrote. Nestor's greatest regret is that he let the Game King bug come between him and Kane. “I didn't want it to go that far,” he says. “I thought he and I were friends long enough that these kinds of issues didn't need to happen.” He claims he always intended to pay Kane his cut from the secret jackpots. Now he can't. His roommate, Laverde, signed over Nestor's money in exchange for avoiding a trial of his own. (There are no court filings to suggest that Kane's winnings were seized.) Nestor says the Meadows still has his winnings, and the IRS is chasing him for $239,861.04 in back taxes, interest, and penalties—money he doesn't have. If there's one silver lining, it's that Nestor has been banned from Pennsylvania casinos. He still gambles occasionally in neighboring states, but his more pressing addiction right now is Candy Crush, which he plays on a cheap Android tablet. He cleared 515 levels in two months, using a trick he found on the Internet to get extra lives without paying. |
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Dan Colman being refreshingly honest despite winning many millions, some say he's biting the hand that feeds him but his views are open.
First off, I don’t owe poker a single thing. I’ve been fortunate enough to benefit financially from this game, but I have played it long enough to see the ugly side of this world. It is not a game where the pros are always happy and living a fulfilling life. To have a job where you are at the mercy of variance can be insanely stressful and can lead to a lot of unhealthy habits. I would never in a million years recommend for someone to try and make it as a poker pro. It is also not a game where the amateurs are always happy to be losing their money for the sake of entertainment. The losers lose way more money at this game than winners are winning. A lot of this is money they can’t afford to lose. This is fine of course because if someone is dumb enough to gamble with money they cant afford to lose, that’s their problem. I’m not really buying that though. In a perfect world, markets are based on informed consumers making rational transactions. In reality, sadly, that’s not the case. Markets are based on advertising trying to play on peoples impulses and targeting their weaknesses in order for them to make irrational decisions. I get it if someone wants to go and play poker on their own free will, but I don’t agree with gambling being advertised just like I don’t agree with cigarettes and alcohol being advertised. It bothers me that people care so much about poker’s well-being. As poker is a game that has such a net negative effect on the people playing it. Both financially and emotionally. As for promoting myself, I feel that individual achievements should rarely be celebrated. I am not going to take part in it for others and I wouldn’t want it for myself. If you wonder why our society is so infatuated by individuals and their success, and being a baller, it is not that way for no reason. It is there because it serves a clear purpose. If you get people to look up to someone and adhere to the “gain wealth, forget all but self” motto, then you can get them to ignore the social contract which is very good for power systems. Also it serves as a means of distraction to get people to not pay attention to the things that do matter. These are just my personal views. And yes, I realize I am conflicted. I capitalize off this game that targets peoples weaknesses. I do enjoy it, I love the strategy part of it, but I do see it as a very dark game. |
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buzzer ty for posting that.it was an excellent read
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the John Kane story
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