How Australia’s biggest punter Dr Nick dominated horse racing bets
He is the country’s most successful punter you’ve never heard of. The man known only as Dr Nick has placed hundreds of millions of dollars worth of bets on Australian horse racing in the past 20 years but now he is changing tack.
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Australia’s biggest punter is not a fan of gambling.
The man known in racing circles as Dr Nick sees himself as an algorithmic trader — not a gambler — who “trades” hundreds of millions of dollars a year on horses based on statistical analysis, treating racing as just another financial market.
And he doesn’t do it by flashy big bets, instead making his money with lots of small bets — thousands of computer-generated small wagers every second are possible.
The GP turned numbers man can only remember one time in his life when he placed a bet outside of his professional punting.
It was a slot machine at a Gold Coast casino.
“I spent $10 at Conrad Jupiters in 1986 and I thought it was the most boring $10 I have spent in my life so I never did it again,” he said.
“I find the idea of having no idea about something and just putting on money and hoping something will happen is … mind numbing basically.”
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The extremely private 61-year-old has managed to keep a low public profile in a high profile industry for the past 20 years, despite wagering millions of dollars every week.
But trackside, Dr Nick’s stake in the game is well known. He agreed to speak with The Sunday Telegraph — using only his first name in a bid to maintain that privacy and due to security concerns — about his recent decision to pull out of the fixed odds market.
It’s a decision that has bookmakers nervous, given Dr Nick and his business place $40 million worth of fixed odds bets a year.
But it's a move, discussed at length with Racing NSW boss Peter V’landys this month, he believes will only have a minor ripple effect.
Dr Nick stressed the turnover would be absorbed in the tote — or TAB — market.
“Racing NSW were concerned about integrity issues,” he explained.
“I assured Peter V’landys that neither the tax or integrity issues are behind what we’ve done.”
Algorithmic trading involves using computer mathematical modelling to predict the best stock to trade in, and the best time to do it.
When it comes to horse racing, traders rely on an algorithm to price the chance of a horse winning, as opposed to a stock price rising or falling.
Because this type of trading is computer generated, thousands of bets can be placed per second.
However, with fixed odds, there is still an element of human intervention: trades made manually either by phone or online to corporate bookmakers who set odds.
When you’re trading electronically with a computer, fixed odds betting can’t be done efficiently because it requires “a lot of handling”, which is why Dr Nick is pulling out.
“It is inefficient and it’s a small part of what we do,” he said.
Dr Nick will stay in the more automated tote betting where the fixed odds turnover will be absorbed.
His business researches and trades in all kinds of markets, stocks and futures, and fixed odds in Australian horse racing represents a small percentage of that business.
The horse racing industry has its fair share of colourful characters and ostentatious identities but Dr Nick isn’t one of them. He hasn’t been to a race day since 2005.
He doesn’t sit back on the weekend feverishly studying the form guide (he prefers watching rugby league) and has no romantic connection to the sport.
“It is a tradeable financial market,” he puts it simply.
Algorithmic trading involves big data research, Dr Nick explains, and, in the context of horse racing, pricing the chance of something happening in the future.
While his betting activity rivals that of Zeljko Ranogajec, long considered Australia’s biggest gambler, Dr Nick stresses he’s an algorithmic trader, not a gambler.
The annual figures he deals with are eye-watering but ask him about his biggest ever bet and he’ll tell you he wouldn’t have a clue.
“This sort of trading isn’t this leviathan,” he said.
After studying medicine and practising as a GP 30 years ago, Dr Nick, a married father-of-two who grew up in Sydney, changed his career and followed his fascination with numbers.
Easing into retirement, Dr Nick will shift his research focus from financial markets and data to cultural issues and sociology, “hopefully to make a philanthropic difference to the planet”.
Originally published as How Australia’s biggest punter Dr Nick dominated horse racing bets