Actuaries in Gambling


Gambling is a zero-sum game and is miles apart from insurance or any other related products that Actuaries typically design. However, that is no reason for us to think that actuaries have no role in this domain. Risk analysis and modeling is a skill that  every actuary possesses and that’s a fact. And unlike any investment product, gambling too is filled with risk.
 
Dominic Cortis, an associate actuary explained how he carries out modeling for betting. He explained how he builds a model using a set of assumptions which is later developed into a more sophisticated version of itself by working on its intricacies. Dominic also threw light on the fact that the modelling process and the experts involved in gambling are not very different from those in the finance domain. Dominic also considers insurance and gambling to be exactly the same and the only dissimilarity he sees between the two is “insurable Interest” i.e, a person paying for insurance has something to lose but the case is opposite in case of a gambler.
 
The factor that gives actuaries an upper hand in Gambling in contrast to traditional bettors is their expertise in risk. Furthermore, Actuaries are trained to ask questions and build models. Traditional bettors are limited to mathematics only when placing their bets while actuaries on the other hand are free to apply their entire actuarial knowledge and doing the same allows them to gamble with lesser risk.
 
The story of Bill Benter, a professional gambler who worked with his partner, Alan wood, a former insurance actuary is a phenomenal example of living the dream. Bill has made close to 1B USD in the field of Horse Betting. He initially started off in strip casinos in Vegas but not long after he was banned from every single casino in the city, he could count cards very efficiently due to his tight grasp in maths. Later he started Horse Betting where his life turned around. He created a model that could predict the outcome of a race. He coded 16 different variables into the model that could potentially affect the outcome. His latest model involves a total of 130 Variables!
 
Bill Benter’s approximate winnings every time he bets is between 5M TO 10M USD a day. His profits are approximated to be 24% of his turnover on every bet! Gambling as a field is not very respectable. But if one has the proper skills and tools to make a profit off of it then that person wouldn’t have a reason to back out. Gambling, however, also has certain risks attached to it, but doesn’t everything? Besides, “risk hai toh ishq hai” 


References-
https://www.pinnacle.com/en/betting-articles/educational/from-actuary-to-sports-betting/VLQ2VSYXLBX62L89#:~:text=Furthermore%2C%20actuaries%20are%20often%20involved,be%20usefully%20exploited%20in%20betting.
https://www.independentactuaries.com/sports-betting-and-actuaries/
https://www.gamblingsites.org/biographies/bill-benter/

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