People are mythologising making money by gambling. In terms of tech the industry is like 20 years behind the financial markets.
Source, I worked at company that did arbitrage in online sports betting in 2010s that employed around 30 or so people and did hundreds of millions in profit.
This story predates that period by well over a decade. Even if the company you worked for isn't one of the ones named towards the end of the article, it is very likely that the company you worked for was in some way connected with people from either or both of Benter's or Woods' operations.
I doubt there is a strong link between the founders of my old employer and Benter or Woods. My old employer did totally different kind of betting. No blackjack or horses.
In general people overestimate how hard it is to make money in gambling. You don't need to be some kind of savant to do it. The people in general are similar to what you would find in your average tech company. Sure there is a founder with a vision and some sort of an insight into making money, but every company has one.
Could you share the name of your former employer, or if you can't, could you share the name of similar employers?
I'm on a bit of a probability (gambling, sports betting, stats, etc) kick these days, and I'd be interested in reading more about people and companies doing this in practice. I'd been imagining there must be organised sports gamblers, but they don't seem to be overly searchable.
I don’t know exactly how these companies make their money and how successful they are, but I at least believe all of them are in the odds computation business. They might be supplying prices to bookmakers instead of betting themselves etc.
Longshot Systems
Football Radar
Gambit Research
SportsRadar
Odds Reactor
Star Lizard
Smartodds
Smarkets
These companies are known more for their HFT trading in financial markets, but I believe they have also expanded into sports betting.
jane street
jump trading
Susquehanna
Also some of the bookmakers such as matchbook have started as betting group and then overtime turned into a bookmaker as that is where the real money is.
Oh wow, it's happening there! I've followed and starred and bookmarked and all that, and will be having a browse around a bit more closely when I get a moment. I think I'm roughly understanding what the group is about. I'll follow up, thanks!
Yeah; I briefly did some consulting work at a sports betting company. They have a database of hundreds of people who are essentially banned because they’re too good at picking winners, and the betting company loses money having them as clients.
Internally they track how much each account wins & loses. If you win too much, the site gives you worse and worse odds until eventually you’re banned entirely. The reverse is also true: if you’re a terrible better, the site gives you better odds hoping to keep you coming back for more.
They have a whole team whose job it is to instantly block smart betters from opening new accounts. Accounts opened in the name of their girlfriends is the classic thing they watch out for.
Some of the smartest gamblers also get hired as quants, and help figure out what the odds should be on the site.
In Europe bookies just get rid of good players, except for the exchanges and Pinnacle. No one serious will gamble with European bookmakers. Though maybe this has changed lately. I have not been following field recently.
In Asia the bookies are a lot more tolerant, especially the larger ones. You really have to hit their pnl hard for you to get cut off.
Yeah I have been wondering this myself as well. I'm one of 3 co-founders in a bootstrapped company doing consultancy for a few years in a LCOL area. We have been paying founders 50k/year salaries for the life of the company. We haven't been especially lucky and we haven't been super brilliant in our business decisions. Yet we are doing fairly well.
This year we made 400k revenue, 150k profit and 40% growth. Our sales prospect are a lot better than at the start of the year. So I'm expecting to have another strong year of growth next year. Also we are nowhere near saturating the market and can have strong growth for many years to come.
Salary + 1/3 of profits is equal to 100k for this year. 40% growth doubles the company every 2 years, If everything goes well just salary + profits will grow very nicely. Then on top of this come the exit opportunities where founders will make millions.
Product and service businesses are very very very different things. Service you get immediate cashflow but the thing doesn't scale past the humans. Software scales infinitely in theory, but it takes a lot of time to build before you even get 1$ out of it.
You can hire people into consultancy business and grow it like any other business. Sure it won't become the next magnificent seven, but you can grow it enough that you can make a lot of money.
For example, there exist plenty of consultancy companies that have 10million revenue. That would be 20x growth for us. In practice that would mean 500k - 1m yearly income for founders in our case. On top of that the company probably could be sold for 30m - 100m.
With typical vc dilution founders need to grow a very successful product company to earn similar amounts of money. There are plenty of examples of unicorn exits where the founder team has made less.
I've know quite a few businesses that started with services then transitioned into product. Once you have enough domain knowledge it is the obvious next step.
'Just' making money is not very hard in IT. We have been for decades and it's only growing; we do emergency software fixes which means we can ask whatever. We do not, we have a high hourly rate but it is usually clear what it will cost. We don't grow because I do not want a big company and good people are almost impossible to find, but there are way too many projects as, and I know HN doesn't believe this in a survivor bias kind of way, software is getting worse very fast (thanks node and python; and we used to laugh at php; that's more or less a joy these days) so our regular clients are calling more often year after year and new clients come in at a rate I don't care for. But the dream still is products, not consulting; I sold my first product company 25 years ago; I shouldn't have. Nice money but I want it back; consulting is nice and we make a lot for the past 25 years, but making products is nicer so we are now doing 50/50 products vs consulting and hoping it will work. We don't have to work for decades already but why not if it's fun?
Source, I worked at company that did arbitrage in online sports betting in 2010s that employed around 30 or so people and did hundreds of millions in profit.