Alan Woods, a huge winner with a massive bankroll, bets millions the way the rest of us gamble dollars. In 1987, he made his first million dollars by shorting the Hong Kong stock exchange. He lost it the next year by shorting the Japanese market. In 1994, he won $8 million on World Cup soccer bets, including more than $3 million on a single game. This is a man who isn't scared to take chances.
Alan has been a world-class bridge player, a sports bettor, a globetrotting blackjack player, and a market speculator over his gambling career. But it was his horse betting that propelled him to the top of the gambling world. His two-story penthouse atop one of Hong Kong's most opulent residential buildings offers panoramic views of the bay, Kowloon, the New Territories, and China. Happy Valley, one of Hong Kong's two racetracks, sits just below, and Alan has won more than $150 million there by utilizing a sophisticated computer model to handicap the races.
Alan grew raised in Murwillumbah, Australia, a tiny town on New South Wales' northeast coast. He faced a crucial life decision after a brief time in the actuarial department of a Melbourne insurance firm. He had three options: work as a professional bridge player for $5 an hour, go to Sydney and work on the newly launched futures exchange, or try his luck as a professional blackjack player. Blackjack was victorious.
After touring the world as a card counter for five or six years, he and a buddy relocated to Hong Kong to wager on horses. They assumed that a computer program created to simulate horse racing would provide them with a significant edge. They were correct.
Alan and his team's approach to horse racing does not appear to be gambling. There is no suspense over which horse wins or loses. Alan frequently does not even watch the race. It ultimately boils down to numbers moving across a computer screen.
Woods began seeing a lovely woman called Meredith after graduating from college. She was one of his parents' business colleagues' daughter. The two fell in love rapidly, and by 1972, they were ready to marry. They began having children practically soon after marrying. They had a son, Anthony, and a daughter, Vicky.
Woods struggled to hold a job during his marriage because he frequently overslept and was late to work. His relationship suffered as a result of this. Woods and Meredith battled frequently, and their household was unfriendly. Meredith packed her belongings and left after only seven years of marriage, taking the children with her.
He'd learned how to count cards at blackjack from one of his pals. After several weeks of practice, Woods decided he wanted to count cards in a real-life casino. His initial effort was successful, as he was able to leave the casino with a few thousand dollars in his pocket.
Around this time, a buddy suggested that he apply for a job at the Wrest Point Casino, which was about to open in a nearby town. They needed someone to compute the house edge on all of their games. Woods was the ideal candidate for the position since he could perform the computations twice as rapidly as Wrest Point Casino.
Woods was particularly curious in the house edge in blackjack. He first calculated it to be 0.7% when four decks were used. After considering the implications of card counting, Woods realized that it allowed him to obtain an advantage over the house. He was now more motivated than ever to make money by playing blackjack. What began as a hobby to help him cope with his divorce evolved into a full-fledged addiction.
He even spent six months in Vegas at one time so he could play blackjack all day and night. He earned more than $100,000 by the time he left the United States. Then he went on a journey to Asia, Europe, and Australia. He performed in a variety of settings and earned millions of dollars doing so.
Woods began putting on disguises when casinos began to identify him in order to avoid being turned away. He wore wigs, spectacles, and artificial mustaches. He frequently colored his hair, and he frequently changed the fashion of his attire. He would dress to the nines in his nicest suit at times, and at other times, he would just wear jeans and a t-shirt. His image was included in the Griffin Book, which is available at all casinos, in 1984. Even masks wouldn't be enough to keep him from getting kicked out of the casinos at this point. It was time for Woods to stop counting cards and go on his next significant journey.
Woods decided to give horseracing another shot after remembering his passion for it. He relocated to Hong Kong to join Bill Benter and his professional gambling crew. They were attempting to devise a method for making reliable predictions about the outcome of horse races. "You could argue that our whole premise behind betting on horses is to take a contrarian approach to whatever the public is doing," Woods said in an interview with The Monthly.
No one was utilizing computers to improve their odds of selecting winners at the racecourse at the time. As a result, Woods assisted Benter in developing a computer program that calculated a horse's odds of winning based on the track they were running on, the weather conditions on the day of the race, their form in prior races, and a number of other criteria. This software was created utilizing a variety of algorithms and complicated calculations, many of which Woods devised on his own.
After two years of tweaking, the software eventually began to generate correct predictions on a regular basis. Everyone on the team was able to make a significant amount of money by making bets based on what their algorithm projected. Unfortunately, the team did not last long because of financial disagreements. Some members felt they deserved a bigger part of the revenues than they were receiving. Greed got the best of them, and they had to split ways.
The system is so automatic that Woods scarcely notices it on this particular day, instead focusing his attention on his middle monitor for the first few races. It is linked to Betfair.com, a peer-to-peer wagering service established in the United Kingdom, which allows him to bet on today's races directly with other gamblers. "The turnover at Betfair is really modest, which makes betting there a waste of time," Woods admits, noting that it's largely patronized by experts and people with smart money, making the online betting site a more efficient (and more difficult to defeat) market than the racecourse. "However, we do it in the expectation that it will eventually grow larger." Furthermore, it might serve as a helpful indicator. Furthermore, it might be an excellent indicator of where the sharp action is headed. "On occasion, we'll change our strategy at the track depending on what we observe occurring with Betfair."
You'd think that someone who bets like Woods would be passionate about horses and racing. He isn't. For him, it's all about the stats, and he boasts that the last time he saw a race in person was 18 years ago. Woods has had a handful of experiences with thoroughbred ownership, but only because friends offered them as sure bets. Not surprisingly, they never got very far.
Woods had made enough money from racing over the years to be able to absorb a $100 million hit when he attempted to short the NASDAQ a year too early. And, while one of his most notable stock trades was shorting the Hang Seng Index in 1987, which proved to be precisely timed and resulted in a $1 million profit in a single day when the stock market plummeted, he has no issue distinguishing between gambling and investing.
Woods passed away in 2008, at the age of 62. His net worth was above $670 million AUD (about €400 million) at the time of his death.