The Holzhauer Effect

James Holzhauer, a 34-year-old Las Vegas resident, just won his 30th consecutive "Jeopardy" game, bringing his total winnings to more than $2,300,000. Holzhauer's responses are correct more than 95% of the time. He's flawless regarding geography, he's brilliant at everything else, and he's a preternaturally fast thinker. He also knows what he doesn't know. Besides inhuman speed and an enormous data base, Holzhauer appears, to my naïve eye, to be strategically sound with heretofore rarely used tactics. He's on pace to break Ken Jennings' all-time "Jeopardy" winnings record ($2,520,700) within a week. None of this, however, references the true nature of his current impact on American culture. James Holzhauer, you see, is a professional sports bettor.

He's a professional sports bettor shattering records on national television the year after the legalization of sports betting in many states. He has put a name, a face, and a style to the nation's perception of professional sports bettors. And he's making everyone else look stupid.

I know almost nothing about game theory. My limited game theory knowledge, as it were, comes from annually reviewing game theory DVDs from a "Great Courses" collection. I sit and debate with my friends in academia whether Holzhauer increases variance with Daily Doubles in service of reducing variance inherent in Final Jeopardy. Or is he simply always going for maximum earn, and session wins be damned? Obviously, if he gets 95% of his responses correct, variance is his enemy. Or is it? I'm sure Holzhauer would chuckle at our questions. He's undoubtedly pinned down the optimal risks given all contexts. He's beautiful to watch.

That's the effect he's had on me, which is saying something. I cringe with disdain at most trivia contests, probably the result of having been expected to finish in the top one percent of any blessed test I took as a kid. Iowa Basic Skills, IQ, SATs, and on and on -- all exercises in trivia, really. But as much as I despise that kind of testing, I'm rooting for Holzhauer.

Holzhauer has single handedly delivered a compelling vision of what a professional sports bettor looks like and acts like. To this point, civilians have had no idea who we are and what it is that we do, and most of what they imagine is generally wrong. In my personal opinion (fortified by 40 years of doing it), Holzhauer is very much like most of the top sports handicappers. In my estimation, a hundred or so individuals win long term at sports betting in the United States. Most of them are quite similar to this guy, although maybe not quite as sharp at"Jeopardy."

James Holzhauer has come along at the most serendipitous time for those of us who have spent our lives handicapping sports. The last time an alleged sports bettor received this much nationally televised airtime, CNBC managed to absolutely butcher public perception of sports bettors with a horrific so-called reality show featuring "Steve Stevens." Stevens turned out to be Darin Notaro, a guy with some serious telemarketing scams as part of his resume. The 2014 show, "Money Talks," was a hot mess of bad acting and caricatures. Holzhauer's television presence and comportment should wash the CNBC "Steve Stevens" stench from the public domain, just in time for state-by-state legalization.

Holzhauer, of course, has captured considerable media interest with his run. Some have tried to compare him to Chris Moneymaker, who became famous by winning the 2003 WSOP Main Event. I find this comparison very odd, as Moneymaker wasn't really considered an expert poker player, and his victory supported the premise that anybody off the street could conceivably win the Main Event. Holzhauer, however, is displaying a world class data base, a fantastic memory, and tactical processing speeds far beyond those of mortal men. His abilities should make civilians fear the skill sets of professional sports bettors. When Moneymaker won, it demonstrated that anyone could win. With Holzhauer's abilities on display, however, the caveat against normal folk "trying sports betting at home" is loud and clear.

Speaking of caveats, I'll close with one. Despite Holzhauer's "Jeopardy" success, we have no real idea if he's winning at sports gambling or not. We don't actually know if he's a long term threat to sports books. My warning is simply to be aware of the classic Halo Effect. Just because a guy dominates "Jeopardy" doesn't necessarily mean that he wins betting sports. I strongly suspect that Holzhauer does win, however, partly because the skill set that he's shown on television is wonderfully suited for live betting, which has become increasingly popular.

I've often said that I'm not really smarter than other people. I'm just faster, and faster creates the illusion of smarter. Nobody is faster than James Holzhauer. If I were running a sports book, I wouldn't let him touch the live betting. That would put my whole operation in the direst jeopardy. And I certainly wouldn't want that.


Bob Dietz -- May 30

Winning Gamblers: The Care and Feeding of White Crows

"If you really don't like to gamble, you have a much better chance of winning."  


People often ask me, "How does a person train to become a winning gambler?" "What qualities are needed to win at gambling?" "Are there rules that can help you win?"

These are reasonable questions. Winning gamblers are very, very rare. My own highly speculative subjective estimate is that, in sports betting, about a hundred individuals or teams of people win long term in the United States. I'll explore many of the attributes that separate winning sports bettors from civilians in the months ahead.  Today, however, I'll tackle just a couple of fundamental ideas that I believe can be helpful to both sports bettors and gamblers in general.

First of all, I'll state the obvious. "Gambling" is just a word. The gamut of behaviors and activities that American culture lumps under the umbrella of "gambling" is wide-ranging. Just because a word exists in a culture does not mean that some actual thing neatly and objectively corresponds to that word. If an alien race visited the United States, would it have any compelling reason to label lottery scratch offs and hockey betting with the same word? The fact that so many different behaviors get lumped into the category of "gambling" can create problems for those trying to win. We'll circle back to this in a bit.

"If you really don't like to gamble, you have a much better chance of winning." Yes, I believe that. Here's why.

In American culture, most if not all of the activities that fall under the purview of the word "gambling" have addictive elements. I'm not taking any moral or ethical position on this. I don't really care if 90% or 10% of the activities someone undertakes are addictive. I'm just pointing out that most "gambling" is to some degree addictive for most people. That includes, of course, sports betting.

I'm going to further argue that one cause of the addictive nature is our culture's hyper-commercial emphasis on material resources, income, and the micro-management of both. The culture is saturated with the buying and selling of products and services. Thousands of brand exposures per day literally immerse each person in everything from half-price shakes at Sonic to the latest rebates on half a dozen competing pickup trucks. Elections can be won or lost based on whether the buying powers of families have risen five percent or dropped five percent. Every financial transaction is labeled as significant and something to be analyzed or controlled.

The behaviors under the aegis of "gambling" acquire significance for the individual due to the perceived consequences of winning or losing money and the physiological effects from that winning or losing. The way our culture frames gambling impedes our ability to objectively evaluate whether we know what we're doing. For example, most people who are introduced to gambling think that it is indeed about "winning money" as if "winning money" is some kind of skill. Civilians look at poker tournaments or sports bets and see winning or losing of money as the primary defining components. This is not at all helpful in the pursuit of actually winning at gambling.

Chris "Jesus" Ferguson, the 2000 WSOP Main Event winner, said that he could be beaten, but he couldn't be outplayed. Basically, he was explaining that he has control of the proximate (his play), and that the ultimate (the tournament financial result) is not the most direct measure of his expertise. All gambling activities involve an eventual financial result. Most people who attempt to gamble mistake the end financial result for the task at hand. This is not a useful perspective, but it's the perspective native to our culture. It can be a real albatross around one's neck.

Because individuals who begin gambling always, upon immediate failure, have the option to increase stakes in a Martingale fashion, "winning money" can be achieved again and again at greater and greater bankroll/indebtedness risk. Defining success or failure in the short term by "money won" can therefore be antithetical to achieving real expertise while also being extremely hazardous to one's bankroll. Short term winning or losing is no indication of much of anything. Civilians tend to conflate short term winning with proficiency. This emphasis on short term "money won" is not only an inappropriate way of evaluating expertise, it suckers the person who has won in one type of gambling into thinking that he should be able to apply himself to other types. In part, this error is due to what I mentioned earlier. Many dissimilar activities get lumped under the term "gambling." This serves casinos well.

Here's another reason I think that, in terms of learning to win, a person who dislikes gambling has an advantage over someone who likes it. Simply put, those who dislike the risking of money are less likely to get the addiction bug. People are much more likely to become addicted to winning or losing money than they are to lengthy decision-making processes. Money-as-goal should be secondary, maybe even irrelevant. In sports betting, what's important is that one enjoys the gathering and prioritization of data, relentless shopping for numbers, and timely decision-making. Those are building blocks to winning. The person who devotes himself to process, and each sport has its own particular process, has a chance to win. Gambling on each sport has a markedly different process, and different casino games clearly have enormously different processes. People need to acknowledge that rather than buying into the idea that it's all "gambling" with "winning money" as some kind of global skill. A devotion to simply "winning money" has no more practical application than the proverbial "thoughts and prayers."

Since each sports requires its own individual process, becoming obsessive with one type of preparation should rarely result in obsessiveness regarding completely different types of preparation for other sports. A focus on process gives gamblers a chance, at least, to sidestep the addictive effects of gambling. Process, for example, has rules that set limits on what odds one is allowed to try to overcome.

The goal of winning money is in fact not some magical magnet that will draw people to it if they put in the hours and have some talent. Proper preparation and proper process are the only goals that can truly give players a fighting chance.

We'll return to the attributes of winning gamblers in future "White Crow" posts. As I obliquely touched on several times, I consider "staying in your lane" a key. The next time we discuss white crows, we'll tackle the issue of why it's crucial to stay in your lane, and also why most gamblers find it so difficult.


Bob Dietz -- May 26

Commenting on Comments

I've never understood the utility of a comments section following an article. The people commenting are usually anonymous, with no established reputation or credentials regarding the topic concerned. The writer's friends can pad the comments section with positive feedback. The writer's foes can pepper it with negative feedback. Unless the comments are made by non-anonymous people whose reputations or experience mean something, what is the point?

The answer, in most cases, has something to do with creating views or clicks to generate income. Comments add repeat views as folks tune in to respond, to see responses to their responses, and to respond again. If you're not trying to generate income or views, why activate a comments section? Not only does the generally anonymous back-and-forth serve little purpose; it wastes the time and energy of all concerned. In addition, enough initial research has been done to suggest this kind of interaction is an addictive process with little to recommend it.

One can argue that the author misses the opportunity to learn from the readers, and the readers lose out on further interaction with the author. That, however, is why people have emails, phone numbers, and real names. For example, any verifiably real person is welcome to contact me at integritysports@aol.com.

My first option for the comments section of this blog was to allow all commentary, which would include anonymous sources. I'll pass on that. A second was to allow designated commentary. I'll pass on that for the moment, since those same people can reach me via email. I don't really care how many views or reads this blog and my associated sites accrue. Call me non-commercial. What I care about is having a couple of dozen targeted people check in occasionally and provide some feedback. To that end, I repeat, my email address is integritysports@aol.com.

An additional and major issue with comments sections is that they take time. Just 10 minutes of daily comment organization for each of a handful of blogs and sites turns into 150-200 hours a year that could be better spent.

My current attitudes regarding comments and such have been recently influenced by Tom Nichols' The Death of Expertise. The conflation of popularity and expertise is one topic touched on by Nichols, and it's an important and pervasive issue in 2019.


Bob Dietz -- May 21, 2019

Kentucky Derby Postscript

I discussed the 2019 Kentucky Derby with people who have 30-year histories of betting significant amounts (and have managed some six figure paydays), some folks who own and race thoroughbreds, and people who regularly qualify for the NTRA World Handicapping Championships, the NHC.

Now that Luis Saez, Maximum Security's jockey, has been suspended for 15 race days, one would think we'd have a sense of Derby clarity. I'm not sure that is the case.

"I've seen worse," is a routine response regarding the Saez ride that resulted in Derby disqualification. One owner added, "I've seen worse, and been taken down for less." A general consensus of owners, trainers, and jockeys seems to be that Maximum Security did enough wrong to be taken down. The 2019 context probably plays into this for a couple of reasons. The spate of horse deaths at Santa Anita has resulted in an amplified sensitivity to safety concerns for all of horse racing. In fact, the pre-Derby Friday USA Today feature story -- for the entire paper, not the sports section -- was a report on racehorse safety and what could be done. This piece, straddling the weekend USA Today edition, ran the day before the Derby. It was unlikely that any jockey, including Saez (who has a history of grey area riding), would be allowed any kind of high risk, bumper car trip.

American racing is also trying to appeal to the Chinese and Japanese racing demographics. Racing in those countries, where the pools can dwarf American pools, is very clean. Rough riding is not allowed. Neither are race fixing and most pharmaceuticals, but those are discussions for another day. Bettors in China and Japan are used to a certain clean style of racing, and would be alienated by too much weaving and banging.

It was a really bad public relations context in which to rough ride. Had War of Will gone down, American racing would have suffered a true disaster, as any number of other horses would also have gone down.

Although a horse racing civilian, I must report that I immediately suspected Maximum Security and Saez were in trouble. When the horseback interviewer trotted up to Saez after the finish, Saez's demeanor strongly suggested a problem. And when the first words out of Saez and owner Gary West's mouths had an apologist/explanatory spin, I figured that there was a real issue.

Interestingly, the Japanese pools, which are separate from American pools, had an enormous amount of Maximum Security money, knocking him down to a 2-1 favorite. The Japanese were right...until they weren't.


Bob Dietz -- May 15

A Brief Introduction

First of all, I have a request. If you ever catch me referring to my life as a "journey," please take a page from the cornfield scene in the movie Casino, and do unto me as Nicky Santoro had done to him on that last, really bad day.

I've lived a little bit, done a few unusual things, and done many more of the usual, banal things. I've learned along the way, and it's probably time to share some of what I've learned. After all, there may be a Louisville Slugger around the next corner.

I started working as a sports gambling consultant back in 1979. Rather than address my 40 years of immersion in gambling subcultures in this opening intro, let me just share a few of my favorite things as a way of saying hello.

Favorite Authors:  Hunter Thompson; James Randi
Favorite Movies:  Blade Runner; Village of the Damned
Religion:  Church of the Nethilim Rite

I was an English (writing option) major from Penn State (minor in general science). I had started in journalism, but switched majors because I found journalism a bit restrictive. So of course I wound up in the world of gambling. It all makes perfect sense.

Eventually, I'll attempt blog spinoffs -- monographs about various topics, a college football vodcast, and some other projects. This, however, is the kickoff.

Some people might say that a journey of a thousand miles begins with a single step, but they don't have to worry about Louisville Sluggers. I'll just start with "Every trip begins with a single microdose."

My next entry will address the May 4th, 2019 Kentucky Derby. I know absolutely nothing about horse racing, but I know some people who do. I'll pass along a few of their observations.


Bob Dietz -- May 5, 2019