The Phantom Gambler | Hacker News Reader

The Phantom Gambler

theparisreview.org

43 pointsrutenspitz18 comments

For me, this was the most interesting line

> [Bergstrom] let Binion know that if he’d lost the bank’s money, he’d planned to kill himself by swallowing seventy pills.

I wonder how many people out there have done something similar, but had the dice not land in their favor?

There are 50,000 suicides in the US each year. I imagine a not-insignificant percentage of those are at least indirectly related to money. What if everyone who was suicidal adopted the attitude "I may as well take out a loan and bet it all on black. I was going to kill myself anyway so why not". There is definitely a cold logic to it at least.

>"I may as well take out a loan and bet it all on black. I was going to kill myself anyway so why not". There is definitely a cold logic to it at least.

Ah yes, I believe this is known as Pascal's Roulette Wager.

On a related note, I always found it interesting that the number of people broadly banned from Vegas casinos for cheating is on a small public list currently numbered 35.

See https://gaming.nv.gov/index.aspx?page=72

>On September 24th, 1980, a man wearing cowboy boots and carrying two brown suitcases entered Binion’s Horseshoe Casino in Las Vegas. One suitcase held $777,000 in cash; the other was empty. After converting the money into chips, the man approached a craps table on the casino floor and put everything on the backline. This meant he was betting against the woman rolling the dice. If she lost, he’d double his money. If she won, he’d lose everything. Scarcely aware of the amount riding on her dice, the woman rolled three times: 6, 9, 7... And just like that, the man won over $1.5 million. He calmly filled the empty suitcase with his winnings, exited Binion’s into the desert afternoon, and drove off. It was the largest amount ever bet on a dice roll in America.

>“Mystery Man Wins Fortune,” the Los Angeles Times reported. No one knew the identity of the fair-haired young Texan who’d just made history, and so he became known as the “Phantom Gambler.” “He was cool,” said Jack Binion, president of the Horseshoe. “He really had a lot of gamble in him.” But it would be years before the phantom would be seen in Vegas again.

I'm surprised there were no AML laws in 1980 requiring any sort of ID for a win that large.

Read the story first, but here is the wiki on the gambler: https://en.wikipedia.org/wiki/William_Lee_Bergstrom

Great story.

There's no real lesson, but that's a great story.

I like to play poker (which isn’t gambling) so I walked in to a local casino (I live in Tanzania, so it’s pretty small and run by some Russian gangster) and tried to find a table. They only had house games (including house poker, but it’s rigged) so I decided to play some roullette. I had walked in with $500 USD and decided to just bet $50 on black and consume as many free drinks as I could until I ran out of money.

Everyone was betting on different numbers and kept trying to determine what was “lucky” It was kind of baffling actually. But I wasn’t having much fun, but everyone else was because they thought they were making “choices” thinking they were adding some value to the equation.

After losing all my money, I personally didn’t get much of a rush (maybe because my strategy was to play until I lost it all), but I can see the appeal if you think you have some sort of “skill” at it.

So now I understand. I love playing poker and get a big rush from putting a couple hundred bucks on the line in a big hand, but only because I feel I’m adding alpha or skill to the equation. In the same way, gamblers are getting the same rush that I get from poker because they feel like they are adding some alpha.

Admittedly, though, if I was wagering all of my net worth on the line, I would probably have thought roullette was more exhilirating.

Slots, on the otherhand, I still don’t get. You essentially just sit there and lose money.

As a poker player: poker is gambling.

Pretending it isn't doesn't gain you anything.

It is different from slots or roullette because rather than the house you bet against other people but it is totally gambling.

I agree. Poker is a game of skill, but it is still gambling. You need to treat it as an entertainment expense and budget accordingly.

It may still be gambling in the sense that there's a large element of chance that dictates the game, but it's not the same as something like Baccarat or poker which is strictly a game of chance. The element of skill can cause variance in outcomes over the period of play. It's important to make that distinction because you're getting into gray areas here.

Are actuaries and insurance companies engaging in gambling? They're essentially betting on not needing to fulfill the terms of the contract for unlikely outcomes by analyzing the "odds" over time. Often, they "lose" the bet and have to pay out, but they reliably win more than they lose. Of course, good poker players are probably not getting matched up with amateurs, so it's not exactly identical.

Insurance companies engage in a co-operative relationship with the people who take out insurance products with them.

When you insure your house against fire neither you nor the insurance company want your house to burn down.

In a gambling scenario the layer wishes the bet to lose and the backer wants it to succeed.

Edit: that should be "baccarat or slots", not poker. My point is that poker, specifically Texas holdem, isn't strictly a game of chance.

the bitcoin crowd too, never seen as much authoritarian surrealism interpretations of geometry shapes since art classes in high school.

OP is referring to “Chartists” and technical analysis. If you google about for Bitcoin analysis this is unfortunately the sort of stuff that still comes up, sometimes even on Bloomberg . Your Bloomberg terminal will happily draw RSI, MACD, Bollinger bands and the rest of it in 2019 so that you can feel that you’re “adding alpha” as stated in another post.

While charting is stupid (that is, looking at one security time-series for patterns), I don’t believe stuff like RSI, MACD, or Bollinger bands are worthless. Many successful quant models have been built using certain technical indicators (or the extrapolation thereof).

The problem is that these indicators have low IV (information value) and so to produce alpha you need to layer them on top of each other and make a large number of independent bets.

A simple quant bollinger and MVA band strategy could be:

1) set your bollinger bands at, say, +/-1.5sigma apart with a lookback of 2 months, also your MVA with 2 months.

2) long 50 equities in the S&P500 that are between the MVA and the lower band, and short 50 equities above the MVA and below the top band. This is a mean reversion strategy.

3) short 50 equities that broke through the lower band, long 50 that broke above the top band. This is momentum or “breakout” strategy.

First I'm quite biased against trading (feels a lot like gambling) also, a lot of the crypto crowd is new to trading and are constantly throwing prediction .. or even prophecies .. based on a few chart rules. None of them ever did math in the lives, they barely know about quant but when high emotions are involved you can say whatever confirms the bias.

No, you’re totally right. I’ve made a fortune and lost it (like 200k) and there was no skill on my part in either direction.

I work in finance for a hedge fund as a quant, and really hope I’m adding some alpha.

Though, sometimes I think all of our profits are due to luck.

What annoyed me is that is was waste heat, you win, they lose, capital flows somewhere else. On bitcoin platform you could see millions of dollars shift hands in a second. I was nauseous.. a pinch of that could solve so much things. It's a separate world.

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