Risk of Ruin - Trial and Error

Podcast Release Date: 2025-09-11
Podcast Link: https://open.spotify.com/episode/7l7dLBXw0Zyzlz5XB1nPlI
hagrinBPR Review Date: 2025-11-30
Rating: 9.50

Notes:
Saw the recommendation from Shipper and how he was in a hot tub with 3 dudes and boy does this live up to the hype.

4:20 - Intro - didn't grow up gambling, sheltered as younger person, introduced to gambling in college. "I hate using the word addiction because it has such a negative connotation" - interesting thought experiment unrelated to gambling (I'm already going to like this episode), take some time just to think about the definition of the word, how society uses the word and, for example, the thin lines between addictions and habits. I once read a book called The Language Wars by Henry Hitchings which took this (me) extremely literal person hyper focused on the meanings of words and relaxed my approach to language. Starts gambling every day for several years, goes broke more times than he could count tried every strategy including building spreadsheets / algos and still no early success. Engineering student at Uni of Illinois.

7:30 - Finds Gambling Twitter - gets introduced to CLV and the EMH. Bulk of the initial part of the operation was "steam chasing". 10:50 - talks about how, when talking to normies, how many people can't grasp the concept of the price of the bet placed vs the close + the vig and how you can determine the value and how it stumps him that many people can't grasp this concept. (I always find that these exercises / topics are extremely beneficial to me especially in say the tech field - "what are the concepts/things that seem just so natural and second nature to me that the normal person is completely oblivious to? Really good way to find edges, also a really good way to be self-aware and re-evaluate if your views are far too skewed - ex: being "terminally online" skewing your perception of reality). Starts making more money at night than he does working, 24th birthday he quits his job ... after just receiving a promotion at work (bold). Packs up and moves to CO. Parents hate the decision. Considers having an "obsessive"/addictive personality (circles back to the earlier addiction definition convo from earlier). "Doesn't have the desire to play cards, slots, etc" - this mimics me 100% and I do wonder why the one doesn't attract the other more in people like Thomas and I.

18:00 - Quitting Edges - Finds comfort in that he's lost edges in the past, doesn't continue to bet them even if he doesn't quit them as soon as he should. (The obvious follow up here that I wish was asked was "how do you detect dead edges quickly without giving it all back?". I wrote an unreleased article once entitled "Knowing When To End it All" which contained too much dark humor to ever be released, but this is a topic I am endlessly fascinated by and would ask Groovin about when he was alive.) 19:30 - Insane bonus churn process which really bootstraps things. Steam chasing, NBA injury information was a bit slow and could be attacked, i.e. really attacking the new legal landscape in the US.

22:00 - SGPs - "If there was any glitch in your sportsbook software, we probably found it." (Personally, I love the people going after the "attack surface" stories) which led to a bunch of correlated parlays. Mentions that not only was the pricing wrong, but the limits were higher (which is a good reminder that limits are another part of the attack surface equation). Really hammered away at round robin edges to the point Thomas mentions that if you're betting RRs now, the book will likely flag you (good small piece of advice here). Mentions an interesting mechanic that existed early - you could create a parlay say with an ATS leg for the max, then change that one leg to the ML and get the same limit and you could do this over and over again. Similar mechanic existed with the RRs. 25:30 - working out of his living room, team living down the hall because it was an around the clock operation.

27:10 - VIP Social Engineering - "Acting like a bettor with zero control" - figures out through trial and error on how to trigger VIP at every book (okay, now I am envious because I am sort of right in the middle of the same endeavor). Example - take a fresh account, "it would take 3 bets" at one of the 2 major legal books, deposit $25k on a Sunday morning and place it all on an NFL side 10 minutes before post, if it won great, if not, deposit again but double down on the next slate, but if that also lost then deposit again $50k and bet the Sunday night slate. If that lost, down $100k, but Monday morning there would be a message from the VIP host welcoming them to the VIP program with a 25% deposit bonus. Would then social engineer the host a bit and then eventually ask what the limit on the bonus was and there would be none. Would then would wire $500k, get $125k in bonus money which covers the $100k loss + some and now the account had higher limits and a longer leash. "Got to the point where we would be rooting against those 1st 3 bets because it would eventually make them more money." (Great example all around). While managing multiple accounts, had to track accounts which were VIP, what backstory was associated with each VIP account, sometimes would get the same host so had to start using voice changers, "got very good at using a woman's voice" (lol). (Note - what I love about this is this echoes a concept in the OSINT world of persona creation which is very useful and valuable skill to have for many good and chaotic evil reasons). 32:00 - great story about the predatory nature being exposed when one of the first beard accounts gets VIP, it's a friend back home who is an electrician making 5 figures and can't afford to be dropping this type of money gambling. They send a paycheck, instantly accepted and "I should have been happy, but I was disgusted" at the lack of responsible gaming controls (wow, great story). This opens Thomas' eyes up to the evil side of "how the sausage is made" and how even sharps rely on this predatory behavior too to fund the payouts.

37:00 - Sportsbook blanket bans an entire zip code in rural Illinois because of their account farming. Finds out by talking to a person who had NOT given them an account, but the sportsbook just blanket banned the entire zip code (wild). 38:30 - "Paypal was a big issue early on, every pro bettor I know has been banned from Paypal." Over 50% of their bankroll gets locked in Paypal for 6 months (yeesh). Switch to banks, credit/debt cards, wires. "Really makes you appreciate crypto." "Had stacks of 100s of burner phones each labeled with the corresponding identity, each cell had to have different cell plans so we could ping off of different cell towers, burner emails and burner laptops assigned to each and within a couple of months they connected all the accounts and geofenced the entire apartment complex." (Note - So, knowing how geolocation works and it's technical abilities and then knowing how the rest of this works, I was starting to get a bit antsy here listening to this because much of this is known to not work so I was actually very relieved to hear that it only lasted a couple of months because that's about the maximum lifespan of a setup like this. This is my wheelhouse and one of the more frustrating things about zero/negative sum games is that I just wish you could talk to people freely about technical problems and solutions because I can only imagine how amazing such a conversation with Thomas' operation would be). At first they were just driving around with the phones and the laptops. Considered renting an RV! (amazing lol!). 3am, walking into Union Station bus station, him the police and the homeless just firing off on 10 burner phones lol. Just a great story lol.

41:00 - Limited Accounts: Would reach out to people with limited accounts which they would use to bet these 12 leg round robins so even with $1 limited accounts, you could get $1 down on each unique combination so you could get thousands down. Then, if you apply the technique mentioned above, you could quickly find yourself with the ability "to win 6 figures on FCS football on an account the sportsbook thought was limited". (Incredible, just incredible, absolutely awesome attack vector, I never thought of this).

42:00 - "Beyond Steam Chasing" / Faking Markets: Where most people would fake in order to get a better / best price, they were looking to get the WORST price especially on the VIP accounts to keep those accounts alive. (Shipper recommended this podcast, I mean this episode makes me feel so utterly inadequate, there are so many attack vectors here I just never fully contemplated before and just hearing these ideas are spawning 3 more ideas). Faking the market was less about the price than it was the volume. Gives the example of using a limited account to move a market from 5 to 6, using the VIP account to bet the -6 but being able to bet $100k at 6 with the VIP account vs the $10k at -5. "I want the trader on the other end to think I am taking a bad number." 45:00 - "#DoTheMath is it better to spend $100 on a limited account to move it from 5 to 6 at the one book with the VIP account to bet $100k or is it better to spend $10k to get the sharp books to move and bet less. Sometimes, the answer was BOTH." Then he goes through the example of moving the offshore down, moving the VIP book up, taking the bet at 6, trader looks at the screen and sees the market has moved the other way, will move his line down to say 5.5 and let you click another $100k at 5.5 etc. (Just a level far beyond anything I have ever even attempted to execute).

46:50 - Downswings: 3 day stretch losing a million, a million and a million and a half then has to go fly and see family (rough) for Thanksgiving.

49:40 - Culmination of Scaling: Originating basically every sport (this is insane, I'd love to know more about this, how big the team of originators is, etc. The absolute maximum I have found I can handle is 4 and that's with just an insane amount of automation, I couldn't even imagine a number higher than this). Jan - Mar 2023 (around 3-4am every morning) they figured out a way to move the largest US domestic sportsbook on NBA lines when they took a bunch of very limited accounts and they all bet the same game in a small timeframe, it would trigger an automover (almost like what a RAS release would do, but just with all limited accounts that they control - again, brilliant). Do this a few times with a few group of accounts and move an NBA game 2-3 points and then come in with a VIP account and bet NBA overnights with several points of CLV on games (insane). This lasts for months. Wakes up one day to 20-30 accounts locked, both the limited accounts and the VIP accounts and interestingly enough 1 account that had only just signed up and hadn't even placed a bet yet! Then, started getting emails from OTHER sportsbooks saying the accounts were locked there too! "This is when I knew I was in trouble." Sportsbook watched the accounts, contacted Colorado's Gaming and other regulators and then US Integrity gets notified. US Integrity has access to all sportsbook data and then they used "Paypal, bank transfers, geolocation, WiFi logins, everything that Geocomply had collected over the years" (which is so funny because above my initial reaction had been that there were some technical issues with what was being described and now here we are, wild). Gets put on the self-exclusion list which is basically a perversion to ban a winning bettor. Sportsbook goes through the accounts and confiscate money from the winning accounts, but do NOT do this with the losing accounts. Appeals to Colorado Gaming, but they were spearheading this so that didn't work and threatened him with jail time. Consults attorneys 1) to try and get the money back 2) to discuss the criminal charge threats. Leaves the state and dials it down significantly.

Wow, was Shipper right. Great episode, great production, 68 minutes of just fury. I loved everything about this, but the thing I liked the most was Thomas' approach to much of this is similar to mine except this is what the legit top right side of the betting market actually looks like vs what a mere mortal like myself could ever accomplish. It's basically how I think about the industry and the problems it presents except on steroids and with infinity levels above in execution not just theorizing. Incredible episode.