My uncle didn't marry until late in life and had no kids. His hobby was betting on horse races. And when he was alive, this was limited to a local season plus a few trips to other tracks. Dad said his brother usually broke even or close. But my grandfather was very fond of horses and used horses for farming into the 1950s. And cousins of his breed racehorses.
There's an old webcomic even for this.
What is the Keynes maxim being referenced?
Like Heebie I could never do most gambling. But sports and poker are very different from slots or blackjack. The house is always making money, but if you're actually better than the other players then you're making money too. That said, I'm not actually good at either.
The one thing that does make me understand why people gamble and why it's a problem is that I do play online chess, and I do a lot of "just a few more games so I can get back to 1600" and then five games later I'm rated 1500.
On the "why gamble on sports when you can just buy stocks," famously Mark Cuban looked into starting a sports betting hedge fund and decided it wasn't worth it.
I kept losing chess to my son when he was like 12. Not letting him win or giving him any advantage. And my son was not a chess prodigy or even especially good at beating other kids.
But I might be really good at picking horses.
considers gambling a core part of his identity
I think this nails it. It's an activity where you can get quantifiable smartest-guy-in-the-room affirmation, and also get a little bit of swashbuckling frisson, and that combination is very attractive to a certain kind of nerd. And it has its own celebrities, who keep the dream alive for everyone.
My son's second grade teacher was all about praising kids for being "risk-takers" which struck me as maybe not the kind of thing you want to encourage for all children?
"The matches and oily rags are for risk takers."
One of the reasons it's especially hard to make money wagering on horse races is the parimutual betting system. Basically, the state takes ~20% of the betting pool and returns the rest to the winning bettors. So it's not nearly enough to be better at picking winners than other bettors, you have to be much much better.
Regarding Silver, one of the points he makes is that he knows how to bet better than the rest of the punters. This seems at least facially reasonable given that he's a professional gambler. His ostensible advantage is not [just] having a supposedly better model that can more accurately predict the odds around the final outcome, it's knowing which side bets to make and how much to wager on each one.
To use golf as an analogy, say two golfers make a bet before teeing off on the first hole on who will have the lower score for the round. Golfer A shots a 75, Golfer B shoots a 78, so golfer A wins that bet. Silver's point about knowing how to bet (though he'd probably claim that he also had a lower score) is that his model and betting expertise gives him an enormous advantage in terms of all the side bets that golfers might make during the round.
Which I find very plausible. Would it work in gambling in the bond market? No, of course not. Might it work in political betting markets where there's decidedly imperfect information and where the distribution of that information varies widely among the bettors? Seems very possible.
6: I root for Brighton in the Premier League, which is owned by a guy, Tony Bloom, who apparently made hundreds of millions of dollars running a sports betting syndicate; I presume this is partially like running a hedge fund, where the "making money doing it" and the "raising money from investors to do it" skills are disjoint, but reputationally he has done it successfully for a long time (largely betting on soccer in Asia, where he initially worked as a handicapper)
12: d^2 mentioned him in passing but I really enjoyed this longford article on Bill Benter, the man who figured out how to consistently make tens of millions of dollars betting on horse racing in Hong Kong.
13: Read it, and agree quite fascinating. And dude lives in Pittsburgh.
Here's my possibly totally idiotic question, betting in a parimutuel betting system is it not more appropriate to view it as betting on the crowd rather than the horses (or whatever substrate it is based on). What factors do people over or undervalue is what you are teally trying to tease out. I guess it gets you to the same place*, but just seems easier for me to conceptualize.
*But there are factors which may have squat all to do with winning the race--for instance horse names--which could be relevant in the parimutuel odds (a horse around here was named for a beloved Steeler fo instance).
Something that incorporated "Franco."
That was going to be my next guess.
10: there is literally no option, ever, where you don't take any risks. Silver's nerd-thug bragging is silly, so is the Unfogged consensus of flipping extremely fast back and forth between jeering at those silly people and being terrified of the new Napoleons of enterprise.
I think my grandfather made money gambling on horses. He never bet more than he could afford to lose, bit he did study the horses.
Re: mathematics and gambling
There was a particular low dollar gambling game in MA that they had to shut down, because somebody figured out that if you bought around $30k worth of tickets you were pretty much guaranteed to make $50k or something, so a profit of 20k.
I think some kid figured it out and wrote to the State which realized that some people were doing exactly that and shut it down.
I got a system for Keno that would make me rich if I ever played Keno.
19- There were actually several betting groups in various states that used the same system. One based at MIT:
https://www.bostonglobe.com/metro/2011/07/30/lottery-game-with-windfall-for-knowing-few/cEWIVs5c0JLnkapxIiMG6J/story.html
They made a movie about a MI retired math professor starring Bryan Cranston:
https://en.m.wikipedia.org/wiki/Jerry_%26_Marge_Go_Large
This story about George and Marge and the Michigan lottery is pretty good:
https://highline.huffingtonpost.com/articles/en/lotto-winners/?utm_source=inccommurphy
There is also the infamous Stanford mathematics phd who has wone $20 million in the texas lottery but no one knows how and she's not saying:
https://harpers.org/2016/01/the-luckiest-woman-on-earth/
19. I worked with a guy who made a small but reliable income from playing the horses. His rules were simple:
1. Never bet more than you can afford to lose
2. Only back clear favourites. If there isn't a clear favourite, don't bet on that race
3. If you lose a bet, don't be tempted to double on the next one. See 1 above
Asked why everyone didn't do this, he said that it was quite hard work to stay ahead of the game, and if you don't love horses and racing it probably isn't worth the effort. Bookies make their profits from people who bet on horses whose name appeals to them or jockeys they've heard of.
23: For rule 2, do you determine if there is a clear favorite just by looking at the odds? Or do you need to have some extra knowledge?
Mostly by looking at the odds but, and this is where it needs a bit of expertise, my colleague knew what the characteristics of all the tracks were, and how the bookies' favourite- the horse that had most bets backing it- had performed on similar tracks recently, and wouldn't bet on the race if there were contraindications. His method was mostly about when not to bet, which was most of the time. But he still followed all the races in detail in order to identify the occasional near certainty.
One time he actually told the office that if we fancied a flutter we should back a certain horse in a certain race. Many of us did. It lost (came third IIRC). He shrugged, "You could all afford it, couldn't you?"
I now remember he had a 4th rule: always back to win, not for a place or each way. I can't remember the reasoning behind this, but it seemed to serve him well over the years.
My uncle's strategy was a watch the odds as the race got closer and bet on horses where the odds got shorter as the race got closer.
the Unfogged consensus
This was oddly jarring to see. It doesn't feel like Unfogged is the kind of social entity that can have a consensus anymore, particularly one that is "flipping extremely fast back and forth" rather than fuzzy to nonexistent. A general haze of shared unexamined biases... is that the same thing?
One time he actually told the office that if we fancied a flutter we should back a certain horse in a certain race. Many of us did. It lost (came third IIRC). He shrugged, "You could all afford it, couldn't you?"
That's kind of great.
18 seems to be describing not a consensus ("racism not entertained here" might be a minimal one) but something more like a tendency or habitual mode.
I just learned that the kid who shouted "You're dead meat" at Daniel in The Karate Kid was Steve McQueen's son.