I have been around the gambling industry for around twenty years, as a bookmaker, trader, analyst and professional gambler.

We don’t have a club. There’s no exclusive society for gambling professionals (would be tough to find a place big enough for all the egos) like the magician’s Magic Circle.

But if there was, and if I was a member, then telling you the Sacred Secret of professional gambling would get me kicked out.

But since there isn’t a club for me to be kicked out of, I’m happy to share it with you. Here it is. Just don’t tell anybody…..

The truth about the fundamental of making money consistently from any form of gambling is the same, whether the actual gambling involves betting on sports, running a casino, playing cards, buying shares, trading currencies – any form of investment.

It’s not about luck, or looking into the future to guess what is going to happen. It’s not about ‘prediction’. It is simply about making investments with the odds in your favour. And then measuring your performance over a long term.

The worth of an investment is judged not by what ‘thing’ you invested in, but rather the price at which you invested. That is, the amount you will get back, on average, from making that investment, minus what you it cost you to make it.

The difference between the two is the ‘value’. If the average return on your investment is positive, then you made a value bet. Do that repeatedly, and you are a professional gambler/investor.

It’s the price that matters, not what you choose to bet on.

The logical extension of this fact leads us to the Sacred Secret of Professional Gambling;


(all that matters is the price that you get)

In other words you can bet on anything. Any horse, any football team. Pick any lottery numbers or cover any numbers on a roulette wheel. Buy any company’s shares, bet on any hand of poker, buy or sell any commodity or index.

It seems totally counter-intuitive to most people, but it really doesn’t matter WHAT you buy. It only matters that the price you pay for it is less than it’s really worth.

Keep doing that, and the law of big numbers will do the rest.

Randomness is present in all things in nature. Anything that can happen will happen, eventually.

Many punters looking for an edge waste hours of their lives poring over racing formbooks, football tables, golf scores, tennis head–to-heads, darts averages etc.

But it doesn’t matter which horse, football team, golfer, tennis, or darts player they back, because any of them might win. Because of randomness.

So this ‘study’ is mostly time wasted. They’re looking in the wrong place. The edge is to be found in looking at the markets. All that matters is the price they get. And specifically what matters is that the price is greater than the true odds of the thing happening.

Poker players should spend most of their time looking at the other players, not their own cards. Sports gamblers should be looking at the betting markets, not recent form. Equities investors should be looking at a business’s fundamentals, not how it did last quarter.

Nobody can ‘pick’ winners. It’s not possible to know what is going to happen before it does. The universe doesn’t work like that. Everything is random. It’s just that some things are far less random than others, which tricks people into thinking they can tell what is going to happen. Especially if they are ‘experts’ in what happened in the past.

Human beings are programmed to make connections between things, to discern patterns between cause and effect. This is a useful survival mechanism that helps us sense danger. But it’s a delusion to think that we can actually work out the patterns, so that the future is foreseeable.

The truth is that the events occur due to confluences in a virtually infinite number of tiny interactions. Things don’t happen ‘because’ something else happened. Shit just happens. It’s the Post Hoc Ergo Proptor Hoc fallacy.

The most you can do is try to make sense of the patterns in the randomness, and do what is most efficient in any given situation. Efficiency in betting means working out your best guess of how likely things are to happen – the true odds. And then bet only when the odds you can actually get are better.

So you could back the slowest horse in the Grand National. It might be that its true chance of winning the race is 1,000 to 1. If you back him at 2,000 to 1 then you have a value bet. One time in every thousand times he will win the race, and you’ll get back double the return you ‘should’ based on actual probability. Over a million iterations of a the Grand National you would double your money.

What matters is that you have an edge. The price that you got is greater then the true probability of it occurring.

As long as you keep backing ‘value’ then over a long term you will end up ahead. It’s just a statistical inevitability. The trick is to keep finding value, and to stay in the game long enough for your advantage to play out.

So the Two Golden Rules of Professional Gambling therefore are;


Having an edge means finding value. There are any number of different ways of doing it. How YOU do it doesn’t matter. Phil Ivey does it by being good at reading the poker tells of the other guys at the table. Warren Buffett does it by being able to accurately value company shares. Barney Curley does it by hiding horses’ true merit until a target day. Betting syndicates do it by building analytical models to set their own fair prices on sports events.

These are all versions of the same basic goal – finding an edge. These guys all back loads of losers. They can’t predict the future any more than you can. But it doesn’t matter. What matters is that they have found a way to get statistical probability in their favour.

If you have this edge then you will win eventually, SO LONG as you don’t go bust before your edge has had a chance to play out. As you very well might if you’re not careful backing lots of horses at 1,000/1!

So really, the ‘Don’t Go bust’ rule would be better defined as ‘Implement a sound staking plan, that limits your risk of going bust, but maximizes the overall return potential on the investments you make’.

But DON’T GO BUST is a bit easier to remember.

If you look at any successful investor you will find that they adhere to these fundamental truths of investing (even if on occasions they don’t consciously realise that they are doing it).

The Secret and the Rules are as relevant to any entrepreneur starting a business as they are for somebody betting on football matches. These are the basic rules for running a casino, and for trading foreign currencies or speculating on the price of gold.

If you want to be a successful investor, and you understand the Sacred Secret and the Golden Rules then you are on the path to success.