Open Book with Anthony Scaramucci - How 3 Gamblers Stole Millions From Casinos - Kit Chellel

Episode Date: April 30, 2026

Imagine you're smart enough to go to Wall Street, but instead you move into a Vegas apartment with six other guys and spend the next decade quietly robbing casinos blind — that's the wild true story Kit Chellel lays out in Lucky Devils, and I promise you it reads like the HBO series nobody's made yet. Kit joins me on Open Book to break down how science, obsession, and a little bit of beautiful arrogance changed the game forever. Kit Chellel is a reporter at Bloomberg and Businessweek Magazine, covering sports gambling, financial scandals, state-sponsored espionage, and more. He has received a Gerald Loeb Award, an Overseas Press Club Award, and a feature reporting prize from the New York Press Club. He is coauthor, with Matthew Campbell, of Dead in the Water, which was shortlisted for the Financial Times Business Book of the Year Award. Read his brilliant new book Lucky Devils: The True Story of Three Rebel Gamblers Who Beat the Odds and Changed the Game here: https://amzn.to/4vWooFP Anthony Scaramucci is the founder and managing partner of SkyBridge, a global alternative investment firm, and founder and chairman of SALT, a global thought leadership forum and venture studio. Pre-order my next book, All the Wrong Moves: How Three Catastrophic Decisions Led to the Rise of Trump, out on the 17th of September in the UK and the 22nd of September in the US: ⁠https://www.scaramucci.net/allthewrongmoves Learn more about your ad choices. Visit podcastchoices.com/adchoices

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you're a smart guy, you've got a college education, you could do anything you want with your life. Imagine leaving a normal life behind, moving to Vegas, moving into a small apartment with six other dudes, and spending all day counting cards in the casino. It's a weird career choice. So something is making them do this, and something is keeping them in the game for decades at a time. And they describe not the addiction of winning, because they're not addicted to the feeling of making money from a bet. In fact, they switch that part of their brain off. When they win a bet, they feel nothing. That's the whole point. They turn that side of their brain off. What they get a positive feeling from is coming up with a new idea, testing it, quantifying it, taking it into the casino, and then seeing their idea born out in reality. That's an incredibly satisfying feeling, especially when you know you're the only one doing it.

And then when you walk home at the end of that period, which might take a year, two years, and you've got a million dollars in your pocket, you feel like a superstar. Welcome to open book. I am your host, Anthony Scaramucci. Joining us now is Kit Shalel. Hopefully I pronounce it right, Kit. Don't be mad at me. Author and reporter at Bloomberg, but this book is incredible. incredible. The title of the book is Lucky Devils, the true story of three rebel gamblers who beat the odds and changed the game. And I gamble constantly. You know, I'm, I just don't gamble in a casino, right? I'm long Bitcoin. I'm buying this thing, buying that thing. I'm putting money in venture. But this is a different form of gambling that I'm used to. And this is a amazing story about a lot of different intersections of things, crime.

power, chance, investing. Everything is in here. What true you do these three gamblers in their world? I think I was fascinated to discover there are gamblers who apply a sort of scientific, data-driven statistical mindset to the act of betting on blackjack or roulette wheel or horse racing. Those things always seems inherently random to me. And I had no idea there was this secret community of people doing genuinely world-class science and, you know, pioneering technology for the purposes of making a bet.

Now, I don't gamble myself like you. I don't really go in casinos, but I kind of love the idea of people using technology to get an edge. So Kit, who are these guys? What made them believe they could beat a system? Frankly, nobody beats. Okay, everyone loses to this system. These guys say no, not us. Tell me why.

Yeah, a couple of things. Fundamentally, they are devoted to science. Science is their religion. Okay, so if the data is bearing out their belief system, they will believe they can do things that are said to be impossible. And the second thing is this kind of this amazing confidence to go to Las Vegas and go, I'm going to be the one that beats the house. Maybe a little bit of arrogance, but certain.

like rock solid self-belief. I think the thing that I always tell people is you don't lose money in a casino if you don't gamble and nobody makes money in a casino. But these guys do, right? So it's not, and it's a combination of things, right? It's card counting, early computers, predictive models. You know, take us through. some of the methodology.

How does, you know, I mean, I think the roulette wheel is 31 to, 35 to one odds against you at the roulette wheel, right? Yeah, but if you do what I do, my only casino bet whenever I go to a casino is I bet on black at the roulette table. So my chances of winning basically a coin toss, a little less than 50%. Sounds stupid, actually, it's not a bad casino bet. But the odds and casinos are designed to be only. slightly in the house's favour. The game can't be so unfair that you've got no chance of winning.

So they have to bounce it quite carefully. They want to win mostly, but they also want to give you hope. And that's kind of the secret for advantage play is because the house edge is small, you only need to be a little bit smarter than average to turn a profit. You only need to be 10% better than dumb luck to overcome the house edge. And then once you've got your advantage, you just play over and over again thousands of times until your profit comes. When I look at this story, and the reason why I think the story is so intriguing, I actually think this is like a Hulu or a Netflix or an HBO story, because these guys all describe their backgrounds and describe the decision-making that made them decide to go in this direction. Yeah, the whole scene of advantage gambling, these professionals, they come from a sort of singular moment in time and a singular place in time, which is Las Vegas in the late 7th. and early 80s. And this was sort of the heyday of card counting. This is when thousands of young,

mostly men from all over America, who were good at maths and had read a book called Beat the dealer, they all descended on Las Vegas to try and make it big as gamblers. So while this sort of intellectual firepower comes to the city of sin, at the same time you've got the personal computer, the dawn of the personal computer era. The Apple two goes on sale in 1982, I think it was. And so for the first time you've got mathematically minded people who have access to this technology that when it comes to games of chance is incredibly powerful. You know, being able to have access to an odds of processing device in your pockets gives you significant advantages that no one had had before. So all these guys were developing wearable computers and writing their own software

and they were doing it at a time when they could, but you could make real money in Vegas doing it. And the whole scene we have today, you know, what we call sharps. professional gamblers, the people who do it right, you can trace most of them a lineage directly back to the early 1980s in Vegas. You know, the moment that blackjack becomes too easy to them, which is actually a crazy sentence in itself, because I am a pretty decent numbers guy and I know how difficult it is, okay? They're, and they're almost like, to me, they're almost like proto-quant traders, you know what I mean?

like they've got everything going on. What does it say about the mindset of somebody who goes in there and is just trying to outsmart the system? And what does it say about the casinos who are actually not up to, I mean, they eventually get up to speed. And you write about this because of these guys. But I want you to describe that cross current. They're coming in as proto-quant traders. Casinos, they've got the eyes, but it turns out they're off. and how long does it take them to figure it out and so forth?

Yeah, you could draw intersecting lines on a chart about the prominence of advantage play and casino's tolerance of them. You know, these guys, they're fundamentally motivated by winning. It's not so much money, and I guess you get this in the financial markets too. It's being the best. They want to be the smartest guy in the room. They want to be the first one to beat roulette,

to have a sustainable model for beating roulette. So there they see themselves as pioneers and the casino for them is the enemy. Now casinos have said for a long time, the best thing that ever happened to the casino industry in the United States was card counting. Because for every one card counter that can actually, you know, keep a running count in their head and execute and manage their bankroll, there are roughly 999 others who think they can do it with they can. So all these people come through the door and spend their money thinking they can beat the game,

only a handful can. And for a long time, casinos tolerated that as a cost of doing business. And they didn't seem to care that much. I mean, they made half-hearted attempts to throw out advantage gamblers. The security was a bit lax, though. But then the scene got too big. At one point, there were like five, six hundred card counters making a living in Vegas. You know, and they were making really good money.

And when it started hurting the bottom line, the casinos cracked down on it. Well, I mean, you say there's hundreds of millions of dollars were made over a, 30-year period of time, right? So, so, you know, but also tell me the psychological impact of the winning. Yeah, you talk, I often talk to these guys because they have such a weird job. I mean, imagine you're a smart guy, you've got a college education, you could do anything you want with your life. Imagine leaving a normal life behind, moving to Vegas, moving into a small apartment with six other dudes and spending all-day counting cards in the casino. It's a weird career choice, right? So something is making them do this.

and something is keeping them in the game for decades at a time. And they describe the sort of not the addiction of winning because it's not, they're not addicted to the feeling of making money from a bet. In fact, they switch that part of their brain off. When they win a bet, they feel nothing. That's the whole point. They turn that side of their brain off. But what they, what they get a positive feeling from is coming up with a new idea,

testing it, quantifying it, taking it into the casino and then seeing their idea born out in reality, that's an incredibly satisfying feeling, especially when you know you're the only one doing it. And then when you walk home at the end of that period, which might take a year, two years, and you've got a million dollars in your pocket, you feel like a superstar. All right. So you follow finance as well, and you know I'm a fund manager. What could fund managers learn from these guys? I mean, a lot. I think there's a symbiotic relationship between advantage gambling and financial markets. You know, always has been. The inventor of card accounting, Ed Thorpe, as you may or may not know, went on to start an options trading hedge fund at Los Angeles.

Didn't he blurb the back of your book? I think he did, right? Or no? He did. Yeah, he did. But he spent most of his career as an options trader. Yeah. The mindset of the advantage gambler, which is to find a small edge, exploit it as much as possible

before it goes away, you know, these big data-driven decision-making processes, tolerance of risk. It's the same thing you fund in successful markets people. So, yeah, go around the biggest hedge fund on Wall Street. How many of the founders played poker in college to a high level? You know, how many of those guys are interested in sort of data-driven sports betting or betting on horses? You know, there's a lot of crossover there. Thank you for tuning in to Open Book.

And if you haven't already, please hit the subscribe button below so that you're the first to know when our new episodes drop each week. We've got a lot more coming. And now back to the show. You know, there's a section in the book where you're writing about the Hong Kong racetracks. These are incredible places. I've actually been, I used to live in, I lived in Hong Kong in 1998 right after the turnover. So just to set the scene for you, I mean, these are 85,000 seat stadiums.

It's a totally different universe in Vegas. How did the gambling landscape shape what was possible for these guys? in the different genres. I mean, horse racing in Hong Kong is so big. I mean, the thing that blows my mind was the idea that the jockeys, a little jockey, a little five-foot guy, they're rock stars. They can't walk around the city without being mobbed. They're on billboards.

You know, they have a level of stardom that, you know, horse racing doesn't get anywhere else from the world. Because the sport is so big, the pools of money that are better enormous. You know, I think at one point, people in Hong Kong had seven million, population, they were betting more than the entire population of the United States just on horses. So they, you know, it's a bet mad country. But the sums of money being bet makes it a really good place if you want to be an advantage gambler. Because the betting pools are so large, you can operate mostly unnoticed for a long time. Now, if you go to a little US racetrack

and you're dropping three million dollars on six races, you know, you've not only very quickly going to change the entire market odds for everyone, you'll be noticed and you know, you blow your cover. In Hong Kong, Bill Benter, you know, one of the main characters in the book, he was there on and off 30 years and at no point did the general public cotton on to the fact that the biggest player in their market was a foreigner with a computer in a high rise near the Happy Valley. He just kept it, he kept amazingly, he kept it hidden. He wouldn't have been able to do that in a smaller market. So I haven't read this book and I have to confess that I haven't read it, but you wrote a book called Dead in the Water, which, you know, you're a little bit of a nut, okay, because you're writing

about murder, hijacking, maritime fraud. It gets shortlisted for the FT Business Book of the year. So what draws you as a personality to these hidden worlds where enormous money is changing hands in the shadows? I mean, personally, I love the idea that there's a world that's public, that's on display. Mostly that's the world of advertising, of propaganda, of politics. It's the world that's sort of spoon-fed to us. And I love the idea that there's another world beneath that, which is how things really work. And if you do my job, I'm sure in your job too, Anthony, when you see the nuts and bolts, when you see how decisions are really made, it's often incredibly different to the way you imagined it. So shipping was a good example of the thing that we see

when we go out in the ocean. No, I was just going to say, you know, they're totally true in the world of politics, but please go into the shipping thing in the ocean. No, I was just going to say, what we know about shipping is not how shipping really is. You know, shipping is dangerous and corrupt. We're seeing this now in the Strait of Hormuz,

but, you know, for many years, just not something that the general public was aware of. The same is true in gambling. I mean, I have relatives who bet on the horses all the time. They had no idea that there existed such a thing as a betting syndicate. They just didn't know it was out there. Now, these betting syndicers are moving the odds for the whole world. And the fact that the general betting public has no idea they exist or how they make their money blows my mind. You know, I'm sure it's the same with you.

When you see politics up close, the contrast how it's betrayed in the media. I'm with you kid. I had the rudest awakening of my life. I happen to think of myself wrongly. I thought I was like a street smart kid from Long Island and I was getting my eyeballs stabbed out by like assistants in Washington. You know what I mean? They were like, more aggressive and more vicious and more ruthless that I could ever possibly be. I mean, they take your eyeball out and put it in a martini glass. You're bleeding at the table. They're talking to you like nothing happened.

You know, I mean, it's brutal. But I find the fact that you got all three of these guys to talk to you on the record was fascinating. So, like, question number one, how hard was that to get done? And then question number two, which sort of the real curiosity question for me is, Why, what did they want people to understand about what they had done? How did you get them to talk and then what was their messaging? What were they trying to convey?

The first part of that is it was really difficult. I mean, like, I do investigative journalism. I often write about organized criminals or, you know, or sort of grand scale frauds. It was harder to get people who bet for a living to talk to me than, you know, people who break the law for a living. They just incredibly secretive and paranoid about public exposure for good reason. It's just not good for them.

The way I did it was lots of annoying, polite persistence. I just didn't go away. You know, I just, I was going to write about it anyway. Honestly, like the story of a billion dollar horse racing hedge fund, it was too good. I had to write it. It took nine months of asking. And the thing that eventually got Bill Benter to open up was when I took a transatlantic fly and showed up at his door in Pittsburgh. I think that that showed him that I wasn't going anywhere, that I was serious.

But also, you know, meeting me face to face, I wasn't trying to hurt him. And I wasn't trying to steal his secret recipes for success. You know, I think it's pretty clear. I'm not a mathematician. I'm not a gambler. I'm not going to set up a ride. Look, you're a storyteller. And you're a phenomenal storyteller.

So I get that. And I'm going to go back and read your other book, by the way. James McManus also blurbs your book, and he said something about AI-powered algorithms, making human betting decisions obsolete. Are we heading in that direction? Do you think that this will further complicate casinos, et cetera? I think we're already there, quite honestly.

I think there's lots of areas of life where AI is. is kind of a blunt tool. It's bad at a lot of things, but it is uniquely good at processing large data sets and spotting patterns and trends and causalities that are incredibly difficult for, you know, the human cognitive process to recognize. Bill Benter, the most successful horse racing gambler in history,

he built his algorithm piece by piece by trial and error. He guessed that the weather might be a factor. So he quantified it. He guessed that the horse's most recent run of race eight. results was a factor. He did it by trial and error over two decades. When I last saw him in Pittsburgh, he told me he now uses an AI model and he can achieve better results just by, he has an enormous data set to be fair, he has 30 years of horse racing data and he knows how to use it. He now just puts it into the AI model and it finds things that he's never seen before in 30 years. If he is

doing that and he's one of the biggest moves in horse racing markets, the other syndicates are doing it too. So it's already there in horse racing. If it's already happening in horse racing, it's already happening in sports betting. So if you are betting on either one of those things, you are probably competing against someone who's using AI to inform their decision making. That's already happening. And so then it starts this new arms race, the way it's always being with tech gambling. It's always the gamblers that come up with the innovation and the advantage. And then it's the house, the casino, the bookmaker, the online platform now that has to find a solution to stop themselves losing money. So now you have AI gamblers, you're going to have

on the prediction markets and on the big sports betting ads tools to limit the success of that method. But I think right now it's a good time to have that because it's so early. First move of advantage. It's a phenomenal observation. And the insights on the book are amazing. You end the book by we're turning gambling's oldest rule. Okay. The house doesn't always always work. win basically. I mean, right? Because I mean, I learned as a kid, the house always wins, but you're telling us that it doesn't. But the question I have is, did these three guys beat the house or did the house eventually claw back on these guys? And if they did, how did they claw back on? It's a good question. I mean, success is relative in any, in any craft, right? I think one of my

characters did by any measure extremely well. You know, he made hundreds of millions of dollars. He is an extremely wealthy man. He dedicates his life to philanthropy. That's Bill Bent to the horse racing guy. The other two, you know, still that the cyclical boom-bust nature of gambling still exists for them, even using their method. So yeah, I mean, I would say all three of my guys are up over a career. But the house has one big advantage. They get to decide who plays.

And so you can have the best model in the world. You can have the most advanced algorithm the world. You can have an AI system that is better than anything else in existence. And the platform can come and just shut you down, take your money. And there's almost nothing you can do about it. You know, it's a fascinating observation because a lunch counter, everybody's got to get served. There can't be any discrimination.

But in that casino, they can pick and choose who they want to sit and have place bets. You know, so it's interesting. Okay, so we're at the point in the podcast where we came up with five words from your book. I'm going to read the word and then I want you to react to the word. give me a sentence or two. Okay, you ready? I'm ready, shoot. Okay, gambling.

Exciting. I think, you know, there's a reason that people do this. I mean, it's not too often it's viewed in popular culture as a vice or a disease or something awful. But we've been gambling since we crawled out of caves. It's just, it's part of human nature. It's a, it's a reason we're doing for it. You are so right, kid. And I've told my sons, a guy gets brought down by gambling.

booze and alcohol and women. Okay, and I'm not trying to say that to objectify women because you know, I'm talking about the sex addiction part of it, right? So that's what feeds the brain and the adrenaline is there. Okay, I say the word markets. Markets, complexity. You know, gambling markets are simple compared to the markets you work in. There are fewer participants.

There's low liquidity, the decisions you're making are in some way simpler. But even at the scale of betting on a horse race in Hong Kong, there is a level of complexity behind the scenes of sophistication that you just can't see as a consumer, but it is there, and it's moving markets, and you may well not understand it. Okay, very well said. Okay, I say the word risk. Risk. I mean, I instantly think reward. You were talking about, you know, the negative impact of gambling, but without wanting to sort of proselytize for the industry, I think there's such a thing as a good bet,

you know, it exists in finance. It exists in a very rare form in casinos in the form of advantage gamblers. But, you know, any time that you apply resource to something for an uncertain outcome with one good outcome and one bad outcome, that's a gamble. Okay. And throughout human history, what sort of sets us apart as a species is we've made some really good ones. You know, we've gambled on technology, we've gambled on crossing oceans, we've gamble

going to space. All these things were risky on certain decisions. One of the reasons that we've advanced so far is our ability to imagine and quantify complex risks. So it's not all bad. You know, this mindset actually can be useful for us. Okay. Winning. Winning. Okay, that's a good one. Winning. Undefinable. I mean, one of the reasons I wrote this book was to learn what it takes to be a winner, right? In this in this narrow setting, betting on a, on a sport or a casino game, what does it take to be a winner? And I'm not sure I know the answer still. And I'm not sure what winning really looks like in this setting. They dedicated their lives to a craft. They won money, they lost money. They had amazing experiences, but did

they win? Like, could they have spent their effort better elsewhere? Maybe. So it's so funny in the context of this book, when I hear the word winning, I think never enough. It just doesn't feel so satisfying, kid, does it? I think you get numb. Well, especially if, you're numb, get numb, right? But if you're gambling, if you're gambling, it's very easy just to see your gamble as numbers. I've talked to, I've talked to professional gamblers about this for a moment. And I'm sure it happens in financial markets, too. You know, they're looking at numbers on a screen. And the numbers for them are essentially meaningless. They're not interested in the identity of the horse or the jockey or the team even often.

They're just processing data. And so the numbers at some point get so big, they get very detached from reality. At one point in my book, Bill Benter wins $16 million, one of the largest horse racing jackcots in the history of the sport. And he gave it up. He left the ticket unclaimed and let it go to charity. But at that point, he was winning hundreds of millions of dollars a season. the numbers sort of lost meaning for him. Yeah, the money, quite quick, it becomes imaginary money.

It becomes, you know, digits on a screen or chips in your hand. It doesn't seem real. Not this thing I've ever experienced myself, but I hear that's what people feel. I don't know. It feels like once you get started on the path, the path I think doesn't go exactly the way you would like it to. Let's put it that way. All right, this is the last word. I'm going to give you the last word.

I say the word luck. I don't think luck exists. I think luck is a, is a semantic device that we use to explain things that we don't understand. There's no such thing as luck. You know, successful gamblers don't rely on it or use it or it doesn't, it doesn't factor into their thinking. There are, there are large numbers.

Okay, that's what they care about. Anyone can be, anyone can be lucky. I could walk into a casino and do my $100 bet on black, which I always do. And I could walk out with double my money. But I couldn't claim to be a success or an ingenious gambler or be a fool if I did. But to do that a thousand times and still be up, that's the thing. That's what separates these guys, the lucky devils from the mere mortals. It's doing it over and over and over again.

And when you're thinking about large numbers, luck stops being a factor. Same in financial markets. You're a hedge fund. You have one great year. You're up 40%. Everyone declares you to be the world's great genius. you know, as often as not, you just got lucky with your choices. How have you done over 10 years?

How about over 20? You know, that's the difference. That's what separates the elite from everyone else. Yeah, well, we agree. And I think I always tell people you have to stay in the game because, you know, you know, I agree with you on the word luck, but I'm going to use it in this context. You only have to be lucky once. If you get my industry right, you know, as an example, you can,

by Anthropic five years ago it's up 140 times now I may have had to buy 10 different things and I got zeroed on nine of them but the one Anthropic has made me the money

you see what I mean so you can call that luck you can call that statistical betting but I call it staying in the game and being prepared for every at that that comes up in the game you know yeah it's about it's about making lots of good bets

and allowing yourself to be lucky to use that word. Exactly. You have to allow yourself to give yourself opportunities to benefit from your decisions. And that means not pitching everything on one stupid bet, which I do when I go at a casino.

That's making a couple hundred really good ones and making sure you exploit the ones that come off. Well, this has been a fascinating conversation for me. The title of the book is Lucky Devils, the true story of three gamblers who beat the odds and change the game. Just a fascinating reading, you're a great storyteller and a great writer Kit Shalellel, ladies and gentlemen.

Thank you so much for joining us on Open Book. Thanks. All the best.