Pushkin. Michael lewis here, Welcome back to Against the Rules. You might have noticed from the early episodes of this season that I've got a weakness for the old school sports gambler, the kind who found a hard way to make an easy living and then somehow made it even harder, who screwed up and lived large, and took crazy risks and eventually found some edge. No one screwed up quite so much, or live quite so large, or found such a sharp edge as Billy Walders. He's maybe the most
famous sports better in American history. He was born poor in Kentucky and betting on anything that moved before he was old enough to drink. Then he started drinking and bet even more. He's been a car dealer, a poker champion, and also an inmate at a federal prison after he was convicted of insider trading. President Trump pardoned him back in twenty twenty one. But let me let him tell you about himself. Here he is reading from his memoir titled Simply Gambler.
I'm a gambler, but not just any gambler. My wager has ran the spectrum, pitching pennies and dingy racetrack bathrooms, hustling pool and back road shanties, betting thousands of dollars on a single putt on golf courses, and losing millions in Las Vegas casinos. And that does include betting billions of dollars collectively on every American sport.
Billy Walters has a lot to say about the life he's lived in the state of legalized sports betting in the US today. He knows where the bodies are buried, and only narrowly escaped being buried there himself. So I wanted to devote a whole episode to our conversation. I know you'll enjoy it. When did you first realize I like to gamble?
From the second I was introduced to the I don't know. I was around five years old. Probably my grandmother started leaving me my uncle's pool room when I was four. I know for sure the time I was six, I was playing penny nine ball. But the first time I did any type of gambling, it was like, you know, a child being introduced to sugar.
I really enjoyed it.
Why do you think you enjoyed it? You wouldn't have put it into words when you're six years old, But when you look back on it, What do you think you liked about it?
I think even at that age, although I never consciously thought about it, I got a rush out of it.
I think there was. I think there was a rush. I think there was, you know.
I mean, who who doesn't like to win? From as far back as I can remember, I've been competitive, But the gambling part, I think the main reason is.
The rush from it. You had that rush right away, Oh for sure.
I kind of want to fast forward to this transition in your career where you go from being what you described as a degenerate gambler to an edge player.
When I lived in a small town in Kentucky, Muffordville, I became a pretty good pool player. And then when I got out of high school, I wanted the automobile business, and I started making more money than I'd ever imagined. And as a result, I had access to more money and started betting sports and started playing poker. And really I had no reason to have any type of an age. I mean, I'm using a goal sheet and picking all games out of that. I mean, I wasn't better on
my favorite teams. I wasn't dumb enough to do that. But I was probably even dumber. I had a goal sheet and thought I knew something about it, and that's how initially started betting sports and then golf from day one. Though I was never really a sucker when it came to match it up playing golf because it was a lot like pool, So I didn't take any of the worst of it playing golf.
Ever, where did you take the worst of it?
I took the worst of it betting sports. And this is the reason that I have concerns about, you know, the potential addiction in the way things are going with legalized sports betting. There's a tremendous amount of addiction out there that exists.
Now.
I was one of those people. That's the reason I can talk about this. The only person that doesn't have a place at the table right now is a player. You know, you've got regulators, you've got operators, and regulators don't know anything about it. They've been told what to do by basically the lobbyists who were either ex regulators
or ex politicians who the operators have hired. So essentially, the operators have created a vironment where it's you know, it's very very conducive to their business into them but it's not in the long term best interest of legalized sports betting, you know. And I got introduced to sports betting and I had money, and uh, you know, it's the same old story. You know, you get loser, and you tell yourself the story. You know, as soon as I get even, I'm gonna quit. Well, two things either happen.
You never you never get even, or you do get even, you think, well, I got to figure it out. Now I'm going to beat them, and you still don't quit. And uh, you know, you're you definitely have a mathematical disadvantage if you're just picking bowl games with no information whatsoever. But as I got access to more money, I got invited to go to Las Vegas, and uh, and you know, clearly that was an eye opener. I mean it's like you know, a wild dog in a meet house. I mean,
I'm in Louisville, Kentucky. The games were always too small, nobody would ever play for a lot of money. But when I got to Las Vegas, I was different. And of course I'm playing games I had a mathematical advantage in, but the limits were they were much higher. So, man, Las Vegas, I love that, But my problem during that period of time was drinking. When I didn't drink, I was a really tough guy to beat down his money, you know, whether it was poker, whether it was golf.
As a matter of fact, I was a winning player. But the problem was a drinking and I didn't think I had a problem with it because I didn't really drink that often. You know, I would drink, and when I did drink, I would get hammered and the dumbest decisions I were made. I mean I made those while I was drinking, But once that night was over, I didn't drink again for like three weeks months sometime.
Huh.
So I never dreamed I really had a problem of drinking until after a number of years. I kept looking back, and every problem that I ever created for myself, whether it be financial or personal, they all came from drink.
When do you cease to be a degenerate gambler and when do you become something else?
When I moved to Las, say yes, my money management skills were blow average. I had a difficult time going to bed loser regardless of of you know, whether I had the best of it or not. But anyway, once Chip became my partner. He probably was as good a manager with managing money as any gambler I ever met
in my life. And I think there were times probably that he was a little too conservative, but overall, at the end of the day, looking back at it, I think he made the best decisions of anyone I've seen, and by being his partner, you know, after a period of time, I saw what he was doing was right.
What kind of things was he doing that you weren't doing well?
As example, I mean, if we had eight games to bet on a Sunday, if we were to go one in seven and we had one play left, we didn't bet any more any less on that game than what we were supposed to bet, or if we had no plays left, we went to bed. What I was doing is if we'd gone one in seven, there was one game left, whether I had a better or not, I was going to bet on it. And then the other thing I would do, if it was a small, I would end up playing it as a large or something
such as that. So that was Those are the main things that he was doing that I wasn't doing.
He was rule based very much, so yes, yes, you weren't not in the least no, but anyway, so after a very short period of time, I saw he was right, and then I became le based on everything that I did until I drank. And then, you know, as the example, I accumulated a million dollars and I went out one night again drinking, got drunk, lost the entire million dollars. Once another two thousand dollars. I did that again, only
the next time it was a two million dollars. And then finally there was an incident that came up that made me decide that I was never going to drink again.
We're going to take a quick break. Then hear all about that incident. I'm back with Billy Walters talking about the sensational turn his gambling life took back in nineteen eighty seven after he quit drinking.
I had a good friend. His name was Freddie Ferris, his nickname was Sarge. He was a poker player in Las Vegas, very successful poker player, and he had been diagnosed with a terminal brain tumor and lung cancer. And I was a smoker at the time, and I went out that night with another friend. I was really depressed, started drinking. I went to the horseshoe started gambling and had an incident with one of the owners, Ted Benyon,
and really made a fool of myself. I got up the next day and I felt so bad about, you know, the incident, so I called up.
Check Benion, his older brother.
Apologized, He accepted my apology, and I decided that that day that look, I'm not going to make a fool of myself anymore. This will be the last call I left to make and make this apology. So I quit drinking and I quit smoking the same day. I knew at that point in time that smoking was harmful. I was addicted like everyone else was. But when Sarage, when he was diagnosed, you know, that was a final deciding factor for me.
So you are probably a rare person who went to Vegas and shed himself advices.
True, very rare, because at the time I was also a professional poker player along with betting sports, and I had just won the Super Bowl of Poker that year I think it was in eighty six. And when I decided to quit smoking, I decided to quit playing poker too, because the court rooms at that time.
Were full of smoke. So I quit playing poker.
And basically quit playing high stakes, golf, and I really focused on nothing but sports betting. I was doing sports three hunder and sixty five days a year. Baseball, basketball, golf, hockey, tennis.
Was the sports at that point consistently profitable.
Yeah, very much.
So what happened with me in the sports is Michael Kent was the first guy who had written a software program to handicapped sports. Up until that point, everyone was doing sports with a pencil and piece of paper, and Michael really revolutionized the way that handicapping was done. He
was a mathematician, but he also loved sports. But I realized after we became associated within a couple of years, that he eventually was going to lose his entire competitive advantage if he couldn't continue to find things that others didn't recognize. So I started recruiting other people with similar skill sets, and I also started recruiting people who knew
the qualitative side of the sports business very well. And then, of course, you know, I've been doing it for some time and have become pretty good being able to manage a market of it. So I was essentially taking a consensus of what these people were doing and then factoring in both their strengths and weaknesses, and then factoring in, you know, a gambler side of the thing that they didn't understand. And and and that's what I was doing betting sports.
Is that is that the computer group.
The computer group was Michael Kent.
Whi's the first thing you see where he has predictive power that you can put to use.
Before I came to Las Vegas and Kentucky, I was, I was betting sports, and I was booking sports, and I was handicapping sports myself. I didn't do anything at all about computers. I did everything with pencil and paper. I was I had power ratings, and of course I had player values. I had all those things. But I'm betting sports and I'm booking, and I'm shading my numbers based
upon my opinion. And then uh, there's a guy that I knew that was betting me from Pittsburgh, and uh, the guy was consistently went and I saw after about three weeks, I said, this guy's a showy. The money was coming from Kent, the so called computer group, and take their bets. I would adjust my numbers accordingly, and then I would get rid of their bets and go with it.
And then.
As the more successful that they became, that they needed more market, and they all had market in New York and in Las Vegas. I basically had the rest of the country. And so they approached me about, you know, giving me the order instead of betting me and I would move the order and share the order of them, and I agreed.
To do that.
This is really interesting to me because it's the birth of something new in gambling.
It's like the sand wedge and golf. It is.
It really was, and there's no question about it. It was like the sand wedge and golf. As you know, when you really think about sports, how many things have happened in regards to sports as far as handicapping sports are concerned. That truly make a difference. But as you noted earlier and very correctly, so, you know, it's computer and software are worth nothing. The information is the only thing that's inside of that software that has any value.
And you know, when I wrote the book that I wrote, I put everything in the world in there that I know about handicapping sports. I also put everything I knew in there about basic betting strategy, which frankly, between you and I, I think that's more important.
Giving me example of a betting strategy that doesn't naturally occur to people when they enter a market.
Well, I'm going to explain to you what probably ninety plus percent of these new betters are doing. They have one account. Someone paid them a bonus. They have one account at the very most. They have to you know, they have no ideas for strategies concerned in regards to which way the line is going to move or isn't going to move, and they probably really don't understand the
value of certain numbers. Well, if a game six and a half and you're looking to take seven, why it's so important to wait and try to get some of them instead of taking six and a half. Most of them don't have any money management system at all. So the basic betting strategy I put in there was real simple, get as many accounts as you can that are illegal, and you feel like some you know, you get paid.
It's just like any any type shopping. I mean, if you decide you want to buy, you know, a pair of shoes and a brand name pair of shoes, you can go up on the internet and there's probably one hundred places you shop for for you know, for different sizes, colors, and prices. With sports vetting, basically they've created one operating the United States. You've got a handful of companies to
control the entire thing. So what they've done as a result, as situations I've described with the average new better, they've got one account maybe two of the most. Okay, if there's better numbers out there, they're completely oblivious to that.
They have no.
Clue about how the money line compares to the point spread. The other thing is a betting strategy, the importance of numbers. You know the value of three, the number of the value is seven, six, ten. Okay, some numbers are a lot more important than other numbers are. If you don't understand that when it comes to betting strategy, you know you could be making some huge mistakes. A lot of times you're better off betting on a money line than you are the point spread, because you know they offer
money lines out there. Okay, let's say the line on the game I use three as the example is three. Well, if you're betting on the underdog, you may be able to take a money line price. This equivalent to taking three in a quarter, three and a third, or even three and a half sometimes, But if you don't know how to compare those two the true value of those how would you know, right, Because there's there's no legitimate
place that you can go to that's accurate. If you're not a handicapper, you're not anything.
When you first meet Michael Kent, what you're bringing to the table is both access to markets and betting strategy.
Access to market and betting strategy is correct because when it became the betting strategy, he was an office himself, and you know, the things, the things that I could do was you know, was not only the betting strategy, but I could bet you know, larger, much larger amounts of money than he could ever bet.
But he had a superior ability to predict what was going to happen in the games.
No question at the time, at the time I met him, and for a period.
Of uh I would say four years, he was an illege of his own.
You know, in your book, where it gets to me especially interesting in them in the insights that you all generate is when you're telling me things about the sport that I didn't appreciate that you know, for example, Josh Allen, Buffalo Bill's quarterback is better in warm weather than in
cold weather, or Aaron Rodgers is the reverse. Was there a lot of that kind of stuff early on, like player tendencies, how teams performed in certain in different environments, the kind of this is the predictive stuff.
It's just well, I've kind of generally I've known that since the early eighties. It's you know, it's all gotten better over the years, and that information is than a book, you know. Yeah, it goes back to the seventies. I mean, so you're talking about information that's been collected over a period of fifty years, and it's been as the world's changed, as players have changed, have changed, as stadiums have changed. That's all been refined accordingly.
Another break here. When we come back, it'll be to find the FBI knocking on Billy Walters front door. I'm back with sports gambler. Billy Walters described for me, just pay me a picture of the difference between the illegal and the legal sports betting markets.
Is there any difference, Yeah, there's a master difference. There was a master efference back in those days. The legal betting markets to Las Vegas, you could bet a lot more money in the early eighties and you can bet there today. Frankly, who you talk to in Las Vegas, they'll tell you it's been very bad for Las Vegas. You've got four or five companies have created a monopoly
in Las Vegas. So in the early eighties, you had say thirty casinos and they all had sportsbooks, and you had thirty thirty different you know, business men entrepreneurs running them, and they were competing against each other. And today you've got four or five and they've got a monopoly. The illegal sports betting world. Up until things got regulated in other parts of the US, I would say you could probably bet twenty times as much money.
As you could bet in Las Vegas. Oh yeah, maybe twenty five times back then. Yeah, And even today you could bet probably five times as much money and the illegal market as you could bet. You bet more than that.
You can probably bet ten times morning and the illegal market than you could. You look at it, I mean so called legalized sports betting in the world. Today, you've got Fandel, You've got you've got Caesar's, You've got MGM, and you've got DraftKings.
You got basically four of them to control the entire market.
How did the FBI mistake. The Computer Group is a bookie.
First of all, there never been any there never been any organized group of sports betters ever. Okay, So if you're an FBI agent, the only thing you've seen up on this point in time that the people that were organized were bookmakers and the mob. Okay, and and and you know major metropolitan cities, you know the bookmakers were, you know they were. Everybody says they were part of the mob. I can tell you what part of the mob they were. They were being shut down and they
didn't pay them. Mob they kill them. So if you want to make them part of the mob, that makes them part of the mob. So Computer Group comes along and in Las Leg it's a time we probably had thirty thirty five people and we're betting millions of dollars
on sports. And then on top of that, the guy was one of the original members of the Computer Group was Ivan Mendelein, and unbknownst to anyone in the group at the time, he was doing business with an organized crime figure, the guy named Dominic Spinelle and Ivan Mendelein had opened up a sports betting account at the Startust hotel in Dominic Spinelli's name and he was betting on sports on that account.
And what Ivan.
Mendela was doing is is he in an agreement with the computer guys that basically going to be ran like a a corporation. You know, they were going to make their bets. Each person had a certain percentage, but they weren't going to bet outside the group. They weren't going to do you know, they weren't allowed to do that. Well, he was cheating. He was doing that and one of the people he was doing it with was this guy,
Dominic Spinelle. When FBI sees this, they begin an investigation, and then they learned that he's also associated with Michael Kent with me, with others, and then they see all these people. They see millions of dollars and they'd never seen a group of legalized sports betters before, so they begin their investigation. That part I totally understand. I get it, okay, But here's the part that you know, you can't understand. After that, they put war taps on our phones. For
sixty days, no one ever took a bet. There were only bets made, and it was extremely obvious. No one in the group knew Dominic Spinelli, not one person or there was no one in the group associated or affiliated with any kind of an organized crime figure. Well, then after the sixty days of gathering that information, they decided the whole mass raids sixteen or seventeen of them throughout the United States and January of eighty five, and they
confiscated all kinds of records and information. Thinks such is that when they looked at that, it confirmed again we were not bookmakers, no one was associated with organized crime. And then the case was essentially dropped for almost five years, just before the statute of limitations right now. And then there was a guy who wrote a book. It was
called Interference. And in this guy's book, there was a chapter that he wrote about the Computer Group, and Peach said the Computer group was super successful, that it had won eight twenty five million dollars in one year, and it referred to this case. And he inferred in there that the government never pursued the case was because one of the members of the group, a guy the named merv Adelson, was married to Barbara Walters, and that Barbara
Walters was Nancy Reagan's best friend. And essentially that's the reason they never the case. As if there were there was a fix in which wasn't true. But as a result of that book, Uh, and from what I understand, it went back to Kansas City at the time, I think was making the decisions on indictments in regards to the strike Force, and there was a fellow back there who read this book and said, bullshit, there's there's no fixes in the strike force and ordered the case to go forward.
Huh, it's when all this is happening. Is there any sign to you that other people are trying to imitate or copy the Computer group?
No?
No, there were other groups out there that were betting, that clearly organized, that were that knew what they were doing. I mean they they weren't as good as we were. They weren't remotely as good as we were, but you know they they weren't ady.
It's either.
But you know, there were other groups out there that had started betting that I never used in some type of you know, computerized data thinks it's just that. But mostly those people were specialists. They would bet on one sport, or they would bet you know, within one sport. They would bet on like only maybe on two, two or three conferences. But I saw no one out there that bet all the sports. Kent didn't bet all the sports either. I mean I have the right I bet all the
sports because I had so many different handicappers. You know, Kent can only he bet on college football, college basketball, pro football for a period of time. But he really never bet on baseball. He never bet on golf, never bet on no one, never bet on hockey. He never been on tennis. And you bet on all those yes, sir, I did.
Are you still doing it?
I'm not betting on all those sports. I still got on football. I bet on football because I'm one. I love sports. Number two, I'm still very good at I still beat it, and if I didn't, I would quit.
What's the different skill set required to be a really good book either as a really good sports candler.
Well, it's really kind of the same thing. I mean, you have a built in advantage. You're getting eleven to ten. Okay, So okay, that's number one. Okay, number two. If you want to write as much business as you can possibly write at good prices, you could have the sharpest numbers in the world. If you don't write any business, you're not going to make any money as a bookmaker.
On the other hand, you could write.
Billions of dollars or the business with bad numbers, you're not going to make any money, So you want to be able to do both. And I would say ninety percent of people who are out there betting today, they're giving their money to you. They can't win. Let's say there's ten left that okay, to some degree, you need to.
Factory in what they're doing. Okay.
So if you're a bookmaker and let's say you got Billy Walter's betting you, okay, the key with that is number one, you would want me betting you because you would want to know what I'm betting on. Then you need to be able to take the information that you got from me betting you and then make that useful to you. And the way you do it, you would move your line accordingly. And the real key is you want to get the bet as early as you can. Early the bet you get, the more time you have
to get actions back the other way. The later you take the bet and you're frozen with it, you're gambling, which is stupid and smart bookmakers the only profession that I've seen, Michael that has regressed in the last twenty years, or bookmakers. Bookmakers twenty years ago were much much smarter and much better at book making than the guys you have today.
Why has the book making regressed?
Or give an example, especially today with the dissemination of information the way it is today with Twitter, with all these different things out there. Let's say you have an injury with a sports team. Literally the betting public knows about it in a matter.
Of you know, seconds. And let's say you're sitting there and you're running a sports book and you don't know about it in a matter of seconds, and you don't change your line or you don't take your game down off the board, you're going to get bet by a number of people that know about it. And the only thing they know is okay, Well the quarterbacks out okay, But they got no sense to know that that that's a good player and that's winning bet betting on those
type situations. Well, that sportsbook corporator sitting there, he's sleepy, he had moved his line, and so he gets nailed. He gets a bet from one of these people. Well, automatically he throws the guy out for betty. Well, he shouldn't tell the guy, that guy that made that bet. Ninety nine percent of them are going to lose their money because they're going to bet on other games they don't have any information on.
It's going to happen.
But the only reason he got bet is because he was sitting her sound asleep. If he had been paying attention to the business, or had people paying attention to his business.
He wouldn't have got bet. He wouldn't have.
Had a coal line. That's what do you call a coal line? When when you got a dumb bookmaker or a lazy bookmaker that hasn't adjusted his numbers. The smart bookmakers of the world, the guys are on top of their game. You could never bet them on a game like that. Hell, they'd have a game scratched before before the information ever came out, or when it came out, wellin two seconds that be scratched. Okay, So you look at CIRCA. Okay, you got a join in downtown Las Vegas.
The only people they have there are tough guys. All they've got are guys that are you know, that eat sleep and breeze sports three hundred six five days a year. Professional betters, professional gamblers. They don't get any of that. Walk in traffic out of the strip where you got suckers come into town or just giving you your money. They got nothing but the toughest business in town, and they beat it. They beat it because they know how to book.
It's a kind of a relationship to information. They want the information one hundred percent.
You want the information instead.
Of dodging it. All right, I got one last question for you that I'm going to let you go. Sure, kid walks into your knocks on your door and says mister Walt, as I followed your career, I'm thinking about a career in sports gambling. What do you tell them?
I wouldn't do it as as a professional better. Clearly, if you want to get into the book making side of it, you want to get on the marketing side of it. Whatever you want to get in, you know, if that's your passion, man, go for it. Because I think it's a business is going to grow and I think there's going to be a lot of opportunity in it. But as far as the sports better is concerned, I
would not do it. Why Well, I was successful for I mean, if you read my book, you realize, I guess if there's one theme in my book, it's resiliency. And when you look at the situation you got out there. Now in the United States, you're going to bet on sports. A taxation is a joke here. Also, the operators came in and they got all this legalization done. But you know, you got an underlying thing out there with taxes that the people betting on sports aren't even aware of it.
But in this country, any money you win, you're subject to federal and state tax, and a federal tax you're paying tax on ordinary income. It's the only thing in the entire United States tax code you can't carry forward or loss in one year to the next.
Well, that just kills it as a business.
Well, it totally kills it.
I could easily see where you could really grow this business. I mean, I'm talking about wealthy, smart people with bet sports because number one is so much fun. It's number two, it's addictive and now it's so.
Easy to do.
If they could pay twenty percent tax on whatever money they want, they could care for the loss in one year or the next.
Like you do with stocks.
You'd have all kinds of people who aren't putting sports. They would bet sports, and they would bet, they would play sports high and you would see a tremendous amount of.
Growth if you remove tax considerations and the young person is there saying, should I pursue a career in sports gambling.
Well, then that's different.
If it were to be taxed fairly, then yeah, I think you can beat sports, and I think sports can. It's going to be way more work than you ever dream, and ever dream. The market's going to be much smaller than you can ever imagine.
It's it's not. It's mini school compared to the stock exchange.
I'm kind of wondering, is if you think it's been a good way to go through life, Well.
It's been.
It's been a great way to go through life for me. Clearly, I've had issues with it. As you know, I've been indicted five times. When I look back over my life. Would I do this again if I know what I know now, Yeah, I probably would, because look, I loved every day that I did this, Michael. You know, I got up being able to do something every day that I absolutely enjoyed doing.
I loved doing.
It, and it so Yeah, from my perspective, yes it was.
That's my answer.
But if I were a young guy and I were going to become a handicapper. I would specialize in fantasy sports is what I would specialize and the reason I would do that. I think ninety percent of people who bet on fantasy sports have no chance. They're just giving their money away. I think I think you got ten percent of people betting on fantasy sports are going to win, win all the money. And whereas betting on sides, it's
a lot tougher, a lot more competitive. The handicappers have a much bigger advantage, and in fantasy sports they don't care.
So if I were going.
To be a young handicapper and I were going to start all over, would become a professional handicapper with fantasy sports.
Thank you for your time, Thank you, and joined the visit a foreign to meeting you one day. Billy Walters has written a book about his life. It's called Gambler Secrets from a Life at Risk and it's great. Next week we hear from some of the old school Vegas bookies on the other side of Billy Walters. Bets Against the Rules is written and hosted by me Michael Lewis and produced by Lydia gene Kott, Catherine Gerardeau, and Ariella Markowitz.
Our editor is Julia Barton. Our engineer is Sarah Bruguier. Against the Rules is a production of Pushkin Industries. To find more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts, and if you'd like to listen to ad free and learn about other exclusive offerings, don't forget to sign up for a Pushkin Plus subscription at pushkin, dot fm, slash Plus on our Apple showcage