Pablo Torre Finds Out - Meet the Edge Lord: Secrets of a Gambler Winning America's Money

Episode Date: March 13, 2026

He's a hedge-fund exec by day... and a blacklisted sports-betting savant by night. On the eve of your March Madness pool, Galen Hall breaks down his Oceans 11-style strategy that dominated a ruthless, $18.7 million NFL pick-'em contest — including game-theory negotiations with a multi-national syndicate and speaking through the podcast void to "Juicy K." Turns out, optimizing for underdogs across a portfolio of brackets comes down to psychology more than math.• Previously on PTFO: The Best Bettor in NBA History on How to Solve a Gambling Crisis Hosted on Acast. See acast.com/privacy for more information.

Welcome to Pablo Torre finds out, presented by eBay Live. I am Pablo Torre, and today you're going to find out what this sound is. How many brackets are you entering? I usually am good for about 100. Right after this ad. The notion of an edge and the competitive edge, the advantage that you have, I do want to explain to people who the fuck you are. Because you're not merely just some random guy.

Your day job, for those who are not familiar with what it is, is what? I'm a founding partner in a hedge fund. I used to work at Bridgewater, which is the largest hedge fund in the world. I left with my then-boss now partner five years ago. We run our own hedge fund, doing this stuff by day, and then, you know, in my spare time, I'm doing a lot of the sports batting type things, the survivor pool, playing poker. How do you describe yourself to people who've never met you before? I'm not sure about what I'm like as a person, but the one thing I really enjoy the most and think I'm good at is playing competitive games. And in particular, the part of the game that's sort of at the highest level of abstraction, like how does this game work? What are the key levers

for success? How do you think about this game from a fundamental level? And how can you create an edge in whatever it is that you're doing? Whether it's finding the fastest route to get somewhere or, you know, doing my day job or doing this circus survivor, it's just sort of what I do and what I do. And what I enjoy across everything. Okay. So you may have noticed on this show that I think it's pretty important that we scrutinize the effects and unintended consequences of legalized sports betting and the rise of these multi-billion dollar prediction markets. And so we've investigated the gambling scandals that threaten the NBA. We've covered these scams that touch the White House. You've heard me interrogate experts and call for actual regulation. But part of the reason that a 40-year-old

partner at a quantitative hedge fund named Galen Hall is sitting across from me here today is simple. It is NCAA tournament time. It is March Madness coming up, and this is otherwise known as America's longest-running prediction contest, and also Galen Hall's favorite thing in the world. And I keep thinking about all of these increasingly competitive and allegedly enriching pools of money. And I'm always...

fascinated by who ends up actually winning? Because I think who loses is pretty well established now. Pretty much everyone else. But you're the guy who actually wins. And I should say that when I first met Galen years ago through friends here in New York City, where he lives with his wife, Sierra, I became curious how much he's won

across all sorts of NCAA brackets and legal wagers and high-stakes competitions. And Galen has estimated to me that he's won more than, $15 million, from various World Series of poker to the 2023 Backgammon World Championship in Monte Carlo. The broadcast of which was very funny to watch on YouTube, by the way, if only because Galen had entered, that contest, after learning to play Backgammon for the first time. For three months, are you kidding? I've never seen anybody this good in three months of Backgammon. So this guy is brilliant.

It's not that common that I will look at something and then seek to bet on it. It's more like I will hear about how something works. I'll listen to somebody talking about something and I'll say, oh, that can't possibly be right. It's usually how it starts. It starts with some conceptual gap on how things are working. And then the figuring it out for myself comes later. And then the betting comes in, the difference between what I think and what the world thinks. But the contest that finally made me bring Gailen Hall into this studio

was something decidedly more American. What's up, everybody? I'm Dana White. This is the biggest legal sports betting competition in the world. You know that's why I'm here. My name's Ryan Hogue. I played for five different NFL teams. I was Mr. Irrelevant in 2003 NFL draft. It'll be fun to just last for a while.

And, you know, if you get down to the end, kind of see what happens. The Circus Survivor Contest stands as Las Vegas's most. ruthless NFL elimination game, attracting thousands of fans, celebrities, and betters, all willing to put up $1,000 for a shot at millions. The rules are straightforward and simple. Participants pick one team weekly

to win straight up, no spreads, no safety nets. Sounds easy, right? The catch, you can only pick each team once. And one loss eliminates you permanently. Only five entries. Out of an unprecedented 18,718 submissions survived the record-setting 2025-26 Circo-Las Vegas NFL Survivor Pool.

And Galen Hall didn't have one of those five winning entries, which shared an $18.7 million pot. Galen Hall, as a tweet from his poker friend, Phil Helm Youth, announced, had two of those winners. And yet, that's not even close to the real story here, which we will reveal for the first time on this show. Starting with this apparently not illegal strategy. Yeah, out of the 18,000 entries, I put in 50 entries.

And each individual person is limited to 10. So I had to get a group of friends together, put in 10 each, and then I centralized control over all the picks. Which is all to say that this episode is a case study in the type of brain that is, winning the public's money these days. With all due apologies, of course, to Galen's group of friends, and also

his wife. Because relentlessly seeking an edge as someone with a quantitative, probabilistic sort of perspective, I've noticed among the people who are very good at sports betting and winning competitive games, it doesn't turn off. You know, one of the aspects of meeting somebody later in life and getting married when you're 30 instead of when you're 22 is you kind of know who you are and you know who the other person is and you know who you're

marrying. So this is what I was like when she met me and this is what I'm still like today. So she just mostly kind of turns me loose and lets me go. There's certain areas of our life where she has very strong opinions and those are thankfully areas where I have no opinion. Give you an example of the arbitrage opportunity there where Sierra really cares about something and you're like, great because I don't give a shit. When we moved in, I don't think I've ever bought a piece of furniture that didn't come from IKEA. was sleeping on a mattress on the floor. So she wanted to take full control. I said, go for it. I have no input, no opinions. And the result is pretty good. Yeah, over here, I'm going to be on my laptop,

one of the two objects that I own in this apartment. Betting on at times the WNBA. Oh, yeah, I love betting on the WNBA. I used to do a lot of sports betting. Then it basically became impossible. I mean, I've been banned from every sports book. My wife has been banned from every sports book. Most of my close friends have been banned from all the sports books. are very important for those only listening to this podcast. It's just, first of all, it's disgusting to me that this is how we let these sites, you know, advertise to people and sell this image of becoming a big winner. I think it's terrible for people, but I can sort of get my head around the, you know,

don't be in any state capitalism. Okay, fine, sure. But then if you're going to live in that world, the fact that you instantly cut anybody who has any chance of winning is pretty low down and dirty, I think. But that's something that Bob Bulgaris, Hara, Bob Bulgarian, who was arguably by acclamation, the greatest NBA better of the modern era in the pre-legalized period. And yeah, he's eternally frustrated by how the house will just cut you off if you pose anything resembling the beginning of a threat. And so how did you accommodate the fact that

you, too, like Bob Vulgaris, were getting blacklisted from all these places? I just stopped doing sports betting for a long time because I wasn't interested in spending all of my time trying to find beards. I had a day job that's going pretty well. And so that's why I'm mostly attracted to peer-to-peer betting. So things like poker, where you can win as much as you want. The casino doesn't care. The circus survivor, you're competing against other players. The house actually doesn't even take a cut.

Kudos to them. You know, March Madness, contests and things like that where you're competing against other players. And then, you know, now with prediction markets, which are also peer-to-peer, sports betting is becoming more appealing, again, in the short term. But the idea of your edge being fundamentally, And this is something that I didn't really appreciate until I spent time talking to my friends who became, like, hedge fund managers. The edge tends to be information.

Most of the people making money have an edge in one of two ways, or they sort of fall into one of two groups. The first group is you just try and build a model that describes how the world works. So if you're building a basketball model, you start with, you know, compensated points per possession, and then you adjust for the quality of your opponents, and then you discount games against that are bullies. and then you build a player model so you can model injuries and, you know, a luck model so you can model opponent's free throws and so on and so forth. And you just try to make your model as accurate as possible. And then the differences between the world and what your model says, you think that there's some alpha there. There's some edge. And then you bet on those. But the downside

is unless you are incorporating things in your model that the market or Vegas is not accounting for, you have no edge. And then the other way to get an edge is, is you sort of assume that the markets or Vegas is, by and large, pricing in most of the available information in a pretty good way. And the price, whatever it is, is fair. And you focus your time on trying to find things that you think are unlikely to be reflected in the price. You want to bet college football totals, and you just want to become an expert on the weather, predicting the weather. Snow will affect games in a different way, depending on if they run or a lot. You know, wind is actually pretty important and which way is the wind blowing and then you can bet halftime total.

So you become like the expert on knowing something that you think everybody else doesn't know and you just assume everything else is fairly priced. You could post up at the campus bar and see whether the players are drinking the night before the game. And regardless of what the spread is, you have no idea, but you're like, if everybody's in here drinking, I bet it's probably good to bet against them. And if they're not, I'll bet on them. And so these are kind of the two classic ways to generate edge in these kind of competitive environments. The parts that I enjoy the most comes from kind of a very narrow third path, which is, I think people are making some sort of fundamental conceptual mistake. I think they are not thinking about something in the right way.

Their whole framework is wrong. Or they're making what I would call like a logical error. Which is not a thing that many people say with confidence, because part of the whole premise, by the way. The conventional wisdom around like, hey, be wary about sports betting is the house always wins is an aphorism and also generally speaking statistically accurate. Right. Again, in general. And so what you're saying is that even among those who are sophisticated and who are truly incentivized to have the most precision when it comes to their modeling, there are these gaps.

And those gaps in that third way you describe, that's where you find an edge, which is to say, you're in every part of the rabbit hole you can find. And so, look, I'm not here to say in literal terms that you are doing quantitative Oceans 11. Although I kind of enjoy thinking about it that way. Because Vegas, I mean, Circa, they've set up this giant contest, which I've read about in the past. I've seen lots people talk about it.

It's legendary in its scale and never more so than when more than 18,700 people. enter, which is a record. It sets a record every year. Every year, right, right. Every week you pick a team. If the team you picked loses, you're out of the pool.

It can only choose a team once. Right. The rules of this game, the security system that has been set up around the Circa that you are trying to figure out and suss out the vulnerabilities in, give us just the layout of what the rules are.

And Circa, because it's so large, has an additional wrinkle, which ends up being very important, which is that Thanksgiving and Christmas are treated as extra weeks. Which blew my mind. Instead of ending after 18 weeks, it essentially ends after 20 weeks

because you've got two bonus weeks in the middle. And the weeks are quite important because on Christmas there's only six teams playing. And so your options at that point are very limited because you're deep into the season. You've used up a lot of teams. And so people often get forced into picking certain teams.

And you can see that coming well in advance. So oftentimes the pigs get very crowded. There's a big chance to eliminate a lot of opponents all at once. Right. So that happens Thanksgiving and Christmas. Right. And so basically the herd is culled in massive quantities at those two points. But again, it's $1,000 a piece.

You're apparently able to submit many entries. And other than that, though, it's familiar. It's a straight-ahead survivor pool. That's how this works. I think it's actually quite a beautiful design. concept, the rules are so simple. You can explain it so quickly. A person can pick it up and start playing with very little friction, but the amount of depth and thought and complexity that you're able to generate from this small set of rules is quite incredible. Poker is like this. You know,

you can explain poker to somebody pretty quickly, and then you can spend 10,000 hours before you've even scratched some of the most interesting parts of poker. And Survivor is just pretty similar. On its surface, it seems so simple. It's just, okay, just pick a team every week, survive. Yeah, find the weakest team that week. Yeah, yeah, you know, like find a good value where sort of mediocre team is a seven-point favorite because they're playing the Jets. And, you know, this is a good spot to use them and save the better teams for later and then just kind of keep doing this and maybe even have some approximate map of who you're going to pick when throughout the rest of the season and, like, how hard could it be? Right. The answer is it can get really, really

complex. And this is also a good example of what I was talking about about the third path where just conceptually, I think most of the people playing Survivor don't even know what game they're playing. They think they're playing a game. They're like, oh, it's a football game. It's a game about picking football teams and knowing football. And that's just not what it is at all. The three most important skills are modeling the behavior of your opponents and understanding how many people are going to pick which team when and how that might change depending on who wins and loses. Being able to project the uncertainty of win probabilities of teams far into the future, where the difference between sort of the average and the distribution can be quite important. And then third, negotiating. The game has

an unbelievable game theoretic negotiation element, particularly really deep in the contest where a very small number of people remain. And it's just incredibly, incredibly important because you can generate so much value by entering with deals or buying pieces of other people's entries or collaborating with other players, you can just generate a tremendous amount of value this way. And it is explicitly legal. It's totally fine, according to the rules. And it's a big component of the game. And so, you know, if you're getting into the game thinking that it's about football,

it's just that's about the eighth on the list of things that are important here. Uncertainty modeling plus game. theory negotiation game is actually what you've entered into without knowing it. Which is a comfort zone for the dude who is specifically now, our listeners will understand, you. Yeah, me, yes. I should be clear, you've won this contest before. I won in 2019 what was at the time the largest survivor contest, which had about a thousand

people and it was only $300 per entry. It wasn't sponsored by Circa, so it was just the largest one available at the time. Now I've been thinking about some of the things for a few years, and there are a couple little different twists and wrinkles. And the Thanksgiving Christmas, those inflection points, I am going to assume now that that is less glaringly vital to many of your competitors as it is to you. Or is that obviously what the game is?

I'm not sure coming into this year how aware people were, but one mistake people make is they are really, really, really averse to picking an underdog. It's called Survivor. Their goal is to survive. They want to survive for as long as possible. It's the wrong goal. The goal is to win.

And so in order to win, you need other people to lose. And so sometimes it's right to play an underdog. And so Thanksgiving is such a case where Baltimore and Philadelphia were both about two to one favorites. I think 50 to 55% of people picked the Eagles and 30 to 35% of people picked Baltimore.

And that's too much. And in particular, if you just look at the, you know, the odds of winning a two-game parlay, you're about one and three in each one. So you've got about a 9, 10% chance of both of those teams losing, and 90% of the field gets eliminated if that happens. Then if combined with the other two games, which some people picked, but not that many.

You can, if all four of the underdogs win, you get 95, 96% of the field is gone. And the price you're getting paid to bet on that very unlikely scenario is just not, it's too, it's too cheap. So picking the underdogs on Thanksgiving, is a very positive wager just because of the number of people

on the other side of the game. And the fake glove got a man wide open his craft who's going to walk in for the touchdown. Prescott looking around in trouble. He flips it to Williams for the touchdown at the last moment. And so this year, sort of the dream scenario happened, which is all four underdogs, one on Thanksgiving.

Pressure comes, picked up for Yosevaj. Touchdown! It hit the unlikely four-game parlay, and the field got cut from 1,000 remaining to 50 in one day. Williams rolling, throwing open, making the grab, touchdown. Cold come out into the end zone. So anyway, the long answer to your question is if it wasn't obvious before this year, the events of this year, I think will make it very obvious going forward. You know, sort of people can't really imagine something happens until it happens, even though you can just look at the odds and know there's an n% chance, but it doesn't become real until they've seen it, I think. So something that you're doing this entire time, which are just like table stakes basic approaches to how you compete in these games is you have your own model. And you're obviously going to see the schedule through that.

But then you have the strategic question of how do you reverse engineer? Every week, you sort of model the entire remainder of the season, and you're not only modeling all of the different likelihoods of teams winning games, but also, you know, depending on who wins or loses this week, the value of future picks also changes a lot. So like in the example, let's say you pick Cincinnati and Cincinnati wins in Philadelphia wins. So you've eliminated like 35%, but there's still hundreds of people left. An underrated bonus of that is that of the remaining people, almost all, all of them have now used Philadelphia. And you are one of the only people in the contest who still has Philadelphia left. So you get to use Philadelphia in Week 16, and nobody else does. And so you get a tremendous edge then, too. And so being able to project forward, like, okay, well, under these scenarios, you know, Philadelphia is really valuable.

And that is tremendously complicated and tremendously important. And then another thing that's interesting is people are often looking at the sort of average value of a team in the future. but you actually don't care about the average. You care about the distribution of possible values. So explain for those who are not fluent in any way in math, what that means. So let me give you two examples. If you're in week three or four,

and you're trying to project the value of Cincinnati in week 14, you have some estimate of the average strength of Cincinnati in that week. But if you look at the distribution, it's not some normal distribution. It's sort of there's two scenarios. Either Joe Burrow is playing or he's not, right? And if he's not playing, they're not good. And if he is playing, they're pretty good. So instead of thinking, oh, on average, they're a, you know, six out of ten.

You're like, well, actually, there's some chance they're an eight, and there's some chance there's a four out of ten. Either they're going to be a really good pick or really bad pick. And you often want to save those kinds of teams because even if the average is not good, if you end up in the world where they're a bad pick, you just don't play them. You play somebody else. And if you end up with the world where they're a good pick, then you've got a great pick. So you've already sort of assessed, here are the,

the most bipolar NFL franchise. Right. And then in some circumstances, that's exactly what you're looking for. So, for example, there was an interesting debate about the value of having Philadelphia as a possible pick in the final week where, you know, it was pricing something like a 70% chance that they rested their starters and they were not a big favorite and you wouldn't use them, but a 30% chance that they had to play their starters, in which case they'd be a big favorite over Washington, in which case they're tremendously valuable. Right. I just want to spell this part.

out because in the NFL season, of course, which is totally unconcerned with what Survivor Pool players are doing. Yes. They are looking to the actual real life postseason and resting players, which could be a real wrench in the model of somebody who is trying to make sure, oh, wait, I'm getting the real Philadelphia Eagles when I need them to be the full-strength Philadelphia Eagles. Yeah. And when the contest is down to a small number of people and all of the tens of millions of dollars are on the line and there's one or two weeks left, the entire game is about figuring out who's going to rest their people or not. So being able to see that coming and being able to really have a good model for what happens

in week 17 and 18 is another really important aspect. Right. So you had 50 entries at the start. And then Thanksgiving comes around and so much 95% or so of the field is wiped out. And into Christmas. And then out of Christmas, how many entries do you have left? So coming to Thanksgiving, there were 1,000 left and I had 7. I put five of them on Chicago and Cincinnati. After Thanksgiving, I owned five out of the 50. A couple got whittled away here.

You know, the field got whittled away. And then so going into Christmas, there were 10 entries left. I had two of them. And it was this incredibly interesting scenario where I kind of got screwed in that I was the only person who had Kansas City. I had been saving Kansas City for this spot. Because they're a favorite. Yeah, they're playing. Denver at home, they're going to be favored.

And then in one fell swoop. I'm not remembering what happened in that game. One of the most dynamic athletes in all of sports is injured on this fourth and one carry, and it was the right knee. Mahomes gets injured. They get eliminated from the playoffs. Then Minshu gets injured. That's right.

Serious it is. We don't know how long he's going to be out. He may go to the tunnel and come running back in. Who knows? And I say, okay, well, I've got Minnesota. You know, J.J. McCarthy gets injured. J.J. McCarthy has been ruled out for the second half for the Minnesota Vikings. The backup was already injured. And then Washington, Jaden Daniels and Mariana, are injured.

So the three teams I have... All the quarterbacks are getting fucked. All the starters are out and all the backups are out. Everybody has used Detroit. Everybody has used Denver. So you're in this situation where five of the people have Dallas, and they're going to play Dallas. Dallas is favored. They're going to play Dallas no matter what. So one of my brackets and three of the other people are basically forced into playing either Minnesota or Washington, both of whom are pretty substantial and similarly sized underdogs. Washington and Minnesota are basically equally likely to win.

But if you pick Washington and Washington wins, at least you know that guarantees I'm going to beat the five Dallas people. And you can do the math. This turns out to be tremendously powerful. How well do you know the other competitors at this point in the pool? Not at all. some podcasts, so I watch them on the podcast just to kind of get a feel for what they're thinking. There's a podcast that is released about the competition during the competition. And what information is gleaned from the podcast? You can kind of get a sense of how people are thinking about things,

what they're weighing. Sometimes they explicitly say, you know, what their strategy is. Welcome to Last Men's Standing, the Circus Survivor podcast. If you're new here, on this show, we talk all things Circus Survivor, the strategy, the dream. drama, the intrigue throughout the season. There's a lot of intrigue right now because there's 10 people left fighting for $18.72 million. Were you ever interviewed on the podcast? I went on the podcast for one specific reason.

An interesting game theoretic element that happens in survivors, when the field gets to very small, your expected value of making a certain pick is highly determined by how many other people are also making that pick. And when you're down to 10 people, even one other person on the same pick can dramatically alter the value. And can I just have you, explain expected value to a person who has no idea what that concept even is? Yeah, so expected value

is sort of this very common gambling term, which basically means, look, any given bet you may win or lose, but if you were given the opportunity to make this choice an infinite number of times, on average, would you expect to make money or lose money? And that that sort of amount of money that you expect to make or lose is what you would call your expected value. So in general, your goal is to always be trying to find and make positive expected value bet. And and then, you know, over the course of your life, you'll win a bunch, you'll lose a bunch. But on average, if you're constantly making positive expected value bets, you're going to end up a winner. And I would say that this is a really central concept when it comes to anybody who is, quote, unquote, quantitative in nature.

What is the probability derived, expected value of any given decision? Yeah, and I would say that people who do this for a living are not just thinking about gambling when they're doing this. This is how they live in their life. You know, should I buy or should I rent? should I live in this city or that city? Should I, you know, marry this person or should I keep keep dating? You know, these are all expected value questions. Maybe the thing you're optimizing for is your happiness or, you know, your longevity or something like that, but you have some distribution. And then there are other mathematical terms that, you know, describe other things

you would care about, too. It's just so funny to me because this is so obvious to everybody who is in your line of work and who does this professionally with any level of sophistication. And it's just not a way that people see the world in general, which is part of the advantage. Yeah. I remember when a bunch of my poker friends came to visit me at business school, and it was like, Phil was there. So you had... Helmuth. Yeah, Tall Pfeil Helmuth.

Vanessa Selps, you know, lesbian woman. Joe Chong was there, Asian guy. Liv was there, British woman. So you had this group of people that looked more dissimilar or been from more different places. And somebody said, oh, I was sort of surprised that your poker friends are so diverse. And I laugh. I was like, this is the most similar group of people that you're ever going to meet in your entire life. It's just the same brain in 10 different bodies.

This gets us back, though, to how you are now trying to beat out other people who may at this point be thinking similarly. Yeah, so back to the survivor, like the one time I went on the podcast was to announce that I was going to pick a particular team. Because according to the math, once I announced that I'm taking a particular team and lock the pick in, there's one particular opponent who I was sort of speaking. to through the void, where given that I have picked this team, you should choose a different team. I haven't been able to contact JuicyK at all or get out. That's sort of the main reason I'm on the pod is to sort of make sure I'm sure they understand.

And I would be shocked if they played anything other than San Francisco, but they're the only one of us three with San Francisco. It would be just a spectacular blunder if they did anything other than San Francisco. So that's why I went on the podcast. Just to explain that, because basically what you're doing is, you're declaring a commitment that is now giving this target demographic of one person. One person. I went on a podcast to talk to one person because I couldn't get his phone number. And to basically say to him, whatever math you're doing, just know that I am verbally committing to this.

And you're basically hoping that tilts his analysis in a direction that you obviously prefer. It is mutually beneficial for both him and I, for him to select a different team. And the cool thing about the Circa is once you lock your pick in, you can't change it. So in addition to doing this, I posted a little video of the phone where it's like, look, the pick is actually locked in. I was going to say, was that a bluff? Was that real? No, it was real. It was real. You run a little bit of risk doing this because you lock in your pick on a Thursday. And then on Friday, you know, the quarterback gets into a car accident. I mean, you know, small but real risk you run in order to make this play. But you saw that the play given the first mover advantage there was going to be worth that.

Right. Coming into Christmas, first of all, there's this very interesting dynamic, which, you know, I think went unnoticed by a lot of people. But it's like, you know, you already knew weeks in advance that five of the people were going to be on Dallas and four of the people are going to be on Washington. And you knew that one of those two was going to get eliminated on that day. So in essence, I don't care about the Dallas guys. Either they're going to lose anyway, in which case I don't care,

or I'm going to lose, in which case I don't care. So you only care about competing against the other Washington people. But then once the fateful day arrives, now we're a couple days before Christmas. I take a look at the situation. I say, look, everybody has some expected value. You know, there's 10 left. On average, each entry is worth 1.8 million.

Some are worth more. Some are worth less, depending on which teams you have remaining. And I said, well, now it's time to do some game theory negotiation. And so I was like, look, if all of the Washington people, if I could just buy all of those entries and, own them all myself, then there's no need to play more than one Washington. Because if Washington wins, all the Dallas people are eliminated, and you could play the other three Washington's on Minnesota and give yourself a fighting chance. If Dallas wins, you now have some free equity,

which is, well, if Minnesota wins too, you're staying alive. And so it turns out the value of this is worth about a million dollars. And you model this out and you figure out that bad. Yeah, yeah. And it's explicitly legal. You can buy, you can trade, you can do whatever you want. Like how often you are reaffirming this is according to the rules. And I'll tell you why. The reason is because a lot of the people in the contest are poker players. And in poker, this is called collusion. It is explicitly illegal.

And so to a poker player, this feels very sort of verboten. It's like, well, you're not supposed to be doing that. It's like, well, not in poker. This is a different game with different rules. You know, some people were complaining about it. And I felt a bit like a bunch of soccer players had come and played rugby. And they were like, well, this guy is tackling me. And I talked to the ref and he said it's legal, so I guess it's okay.

It's like, no, dude, you're playing a different game. This game has different rules. It's not like the game that you know and love poker. It's a totally different game. And I imagine to the extent that you allow yourself to feel emotions during a very dispassionate analysis, there is that frustration that you just expressed, but also like the great,

you guys don't even want to try to do the thing that I'm trying to do. Yeah, I mean, and where it's really interesting is modeling, these opportunities out before they even arrive. I had actually sent messages to a couple of the players three weeks prior saying, hey, if we get to Christmas, here's what we should do. But again, negotiating in these contests is very hard. Where the people, when you reached out to them to formally negotiate, were they of your mentality? Yeah, so here's the thing that was great. Herolabas talked about interacting with Floyd Medeweather, which it just, that hit a quote. So Bob used Floyd famously and briefly as a beard, and Floyd found himself truly thinking almost diametrically opposite how Bob thought about anything.

Yeah, yeah. And there's one part of the story that I think amused you. Bob is using Floyd as a beard, and Bob says, okay, we want to bet on Denver. And Floyd says, no, I like San Antonio. And then Bob says, well, the play is Denver. So we're going to bet. And Floyd says, no, I like San Antonio. And then Bob says, okay, great. So why don't we just bet with each other, cut the house out of it? I'll take Denver. You take San Antonio. And Floyd says, no, no, I don't want to do that. You always win. Right, which is just such a funny, like, how does the world work versus how do, like, gamblers think about the world. These are psychology questions as opposed to math questions for so many of us. So negotiating and survivors often like that. You're trying to negotiate with people who are completely delusional.

They've used every good team, and, you know, they have nothing but hand grenades left. And then they say, oh, I want, you know, I think my bracket is worth a million. You're like, no, it's worth maybe 10% of that. But the thing that I did not fully appreciate until it happened was on Thanksgiving. It was mostly very sharp players, very smart players, who played the underdogs. And then the underdogs all won. So the average skill of the remaining competitors was quite high. So a bunch of weak players got cleaned out then.

So the players who were left in the contest at this point were very, very, very smart, very sharp, and thought about the game in basically the same way. And so I reached out to these guys and everybody was on the same page immediately. They were like, yep, this generates a ton of value. It would be silly not to do this. You didn't need to explain expected value to that. Didn't need to explain expected value. Didn't need to explain why this was generating a bunch of expected value.

We're sending computer programs and spreadsheets back and forth. It was just actually just a true pleasure to really work with these guys. We're almost romantic. Comparing models. Yeah, it was night before Christmas. I was on vacation in London. It's freezing cold outside. Everybody's working together to put this deal together.

You know, there's like a Jewish lawyer who doesn't celebrate Christmas. and he had COVID, so he's home alone. He wrote all the paperwork for us. You're getting contracts drawn up. Contracts drawn up. I mean, you know, there's seven figure. $19 million on the line, you know, it's important. Usually in these things, it's very hard to put a deal together,

and I think we must have spent 20 hours on the phone, like hashing out various details and the structure of how things work and, you know, exactly how much each person's get paid. But it was nice because I had sort of a natural lead to, sort of be like team captain because I had two of the five remaining picks. Right. And also because I was also not, one of them was going to be on Minnesota

and one of them was going to be on Washington, I was actually already sort of naturally diversified. I sort of had the leverage to really kind of put the deal together. So at this point, this is night before Christmas, there are how many entries? Ten total entries remaining. Five of them are going to play Dallas,

who is playing against Washington. Four, including one of mine, will be on Washington. And one will be on Minnesota, which is also mine. And then by structuring a deal, we moved three Minnesota's as a group. And if Washington wins, the whole thing's over. We scoop. If Dallas wins, we now have a shot to advance four picks and stay in the fight if Minnesota

can pull the upset. And that's actually what happened. Like Dallas won their game, actually closer than expected against Washington. Right. And then Minnesota won one of the most preposterous games I've ever seen against Detroit. Dude, it's so funny that that game. was the game in question. Because you can only use each team once.

You would never use a strong team when they're playing another strong team because you get a lot more value when they're playing somebody else. So almost always, you're picking some mediocre team playing the Jets or playing the Raiders. So the games that have the most impact

on the season are often the crappiest games. That Minnesota Detroit game was really quintessential survivor, I think. So this is the 23 to 10 Viking. win. Yeah, where... We both wind up 8 and 8. Yeah, the Vikings

were starting Max Brosmer, a third string quarterback, I think is a rookie from Minnesota. I think he finished with negative

three passing yards. It was really like the Olympics should put one regular guy out there just so you can see how good... He really seemed

like it was basically like a regular guy out there trying to play NFL quarterback. But when you as Galen are watching this game, what are you like?

Are you actually disciplined emotionally? Are you at peace with whatever is happening because you've done the math, and this is the right process, if not the preferred results. If I made the right decision, I never feel regret. But, you know, I like watching, I like watching the games. You know, it's exciting to have a sweat. Max Rosmer is the only

NFL quarterback in the Super Bowl era to play the entire game and finish with under 70 passing yards and seven plus sacks, and yet still win. Detroit had, I think, six turnovers. Let's see what golf and company can do here, not much. Yeah, a disgusting football game. football game. It was true Christmas miracle from my perspective. Yeah, four fumbles lost, two interceptions by Detroit. It's just such a classic thing. Like, don't celebrate before you cross the finish line. And sometimes in gambling, people really complain and despair before the game's over. And it's like, we lost two starting quarterbacks for Kansas City, then two starting

quarterbacks for Washington, and two starting quarterbacks for Minnesota. And then's like, guess what? You got a miracle anyway. So sometimes things can work out, even when it looks pretty grim. So coming out of that game, then, give us the state of the union. Now we were down to nine players. Of those, two of them were mine, but now really it's a syndicate, a group of us who are sharing the equity of four. So we own four out of the nine. And then, you know, we played those as a group optimally over the final two weeks. So we own four out of nine, finished with two out of six. And then, you know, the great irony is the two out of six that finished were both of the ones that I had started with. You know, so the outside

World, it was like, oh my God, Gailen wins, you know. That's Phil Helmings. Well, that's Phil Helmings. Saying, oh, he's won two out of six. It's like, well, you know. 7.48 million dollars. Yeah, it's, you know, Galen and Friends. How embarrassing to only have won. What did you actually win then? What did you take home? I won in the seven figures. So I was quite happy with the take. And also, emotionally, importantly, nobody won more than me in our group. So, you know, I had the biggest chunk by far. A group project where someone took the initiative.

Yes, yes, yeah. And now we get to this part in the afterglow of your circus sports, Survivor Pool, win to the tune of seven figures. We get to March Madness. Yeah. And look, I assume, I can only assume that you're a March Madness vet. March Madness is my favorite thing in the world. I've only ever had really one real job. But when I started that real job on the first day, I said, where do I take time off? I will not be here on the first two days of March Madness. It's like a religious holiday for me.

That Thursday, Friday. Yeah, I will work on Christmas. I will work on Hanukkah. Like, I don't care. I don't care what is happening. I will not be here those two days. And March Madness has a lot of the same things where similar to Circa, it's like a lot of the people

who participate, and again, I don't want to like denigrate people. Like, they're doing it for fun. They're trying to have a good time. Let me denigrate. As a citizen of the country you were about to denigrate, it's well established now. that people who know less seem to do often better than people who know something.

Two points to address that. Are you familiar with like a Bayes theory? I would love for you to explain Bayesian. So let's just go with an example. Suppose there's a disease and you're a doctor and you go into a town and you have a test that is 90% accurate. So it'll give you the right answer 90% of the time.

Actually, let's make it more like a... Let's say 5% of the disease and your test is 90% accurate. I'm glad we're sticking with disease. though, as the matter of front. Yeah. And so you give somebody the test, and the test comes up positive, what are the chances that that person actually has the disease? So most people say, oh, 90% chance.

Like you tested them, the test is 90% accurate. So there's 90% chance they have the disease. Bayes says, well, you have to actually understand the background distribution. The background distribution is, you know, the disease is quite rare. Only 5% of people have it. So let's look at the group of positive tests. In a group of 1,000 people, there are 50 people. there are 50 people who have the disease

and you will test them and 45 of them will come up positive and there are 950 people who do not have the disease and 95 will come up positive so if you look at the group of positives you'll see that roughly two-thirds of them, you know, 95

out of 140, you'll see most of the positives are actually people who do not have the disease. Thinking about the distribution and then reasoning backwards towards the outcomes than understanding the likelihood. The reason I explained that is, you know, we were saying,

it often seems that people who have no clue what they're doing do better in March Madness. And then the answer is like, no, the clueless people do worse. But there's just so many of them, if 95% of the people are just kind of closing their eyes and filling out their bracket based on, you know, whose mascot they like more, those people might be half as likely or a third is likely

or a tenth as likely to win as somebody who really knows what they're doing. But there's so many of them, that at the end, the odds that you end up with one of those people winning is actually quite high. But it doesn't mean the group of them were doing something sensible. It just means like, you know. It just feels that way. Just feels that way. But this is, I think, a crucial, again, we keep on coming back,

lapsing back into this bifurcation of, like, people who feel and people who are actually calculating. Yeah. Although I will say the second point is specifically with March Madness, one of the, quote, quote, mistakes that people make is, they're often trying to get as many picks right as possible or try and fill out the most accurate bracket instead of trying to win the contest. So they overpick the favorite to win the title.

And so it's like, you know, somebody will be a 20% favorite and 45% of the people will pick them. And it's like, congratulations, you pick the most likely team. Now you have to beat 45% of the field who also picked them. Right. The best case scenario is a lot worse than they realize. Right. And so like, you know, oftentimes some of the people just randomly filling out a bracket, are kind of accidentally making quite good brackets. Turns out

an optimal type of bracket is like picking a number three seed and all chalk. And then, you know, that three seed has a three percent chance of winning. And if you're in like a hundred percent pool, you now have a three percent chance of winning your 100 percent pool because you're the only person who pick them. Brackets like that often are overrepresented among the random filler outers. How many brackets are you entering? I usually am good for about 100. I've been, Somehow, despite being this deepened to the conversation with you, I had the under. I mean, the true answer is as many as I can get my hands on. And again, it's probably not economically the best use of my time, but I just love it so much.

But any pool I can get into, I'm going there. And then I just building a portfolio of, you know, 100 different brackets that's, you know, nicely balanced and, you know, generating maximum value at every possible node. And then, you know, I sort of end up with a couple, you know, usually I'm, you know, usually I'm short, the most likely team is overrepresented, so I don't pick them. Right. So I end up with some liabilities on like, well, if the best team wins, then none of my hundred are going to win.

And then you can just go on, you know, prediction market calcium calci or something like that and just bet on that team to win at 10 to 1 or 5 to 1 or whatever. And then now you're covered for that. I was going to say, so you're actually, somehow, you are finding a way to fulfill the promise of the prediction market. By, yeah, hedging. Part of the pitch of prediction markets is actually they can be useful for hedging in certain circumstances. Oh, I was talking to a former employee of the CFTC, and this person was telling me, like, look, the most sort of like real world case of using an event contract to protect against downside risk is like, let's say you're a sports

bar in New England. And there is the eventuality, the possibility, the possible. The podcast. that the Patriots are not going to make a run to the Super Bowl. So let me buy event contracts such that I can protect my business, which is going to boom based on the Patriot's success. Let me protect myself in the case that they don't. Yeah, for sure. Totally reasonable. But I just say this to all to point out that, like, most people aren't sports bar owners.

Yeah, right, right, right, right. And there are people who are gambling. And in this case, I think you are, once again, sussing out, what are the available opportunities here, what are the rules available to me, and how can I combine this into a diversified portfolio that protects me in ways that other people have not even in the main begun to contemplate? An overarching principle on all these is you've got to make sure you're asking yourself the right question. You've got to make sure you are playing the right game, right?

Like March Madness is not about basketball. It's how many people are going to pick which team. That's the right game. That's the question. If you're going to build a model, that's the model you should be building. Not like, is UNLV going to beat Duke? If you're building a model, what does the distribution of future probabilities look like? What does the number of people picking each team look like? What are the negotiation options?

That's where your time is. You just got to make sure you're playing the right game. If you're trying to make money, which not everybody is. I think this is a crucial thing I have found out today as I just try to simplify what is complicated as much as I can so I can understand it and my audience can. Is that whether or not we realize it, we are not behaving in the main

as if we want to win money. Yeah, which, like... Which is a real advantage of the people who are. Yeah, which is fine. Like, not everything. It's great for you. Right. Like, I mean, in the World Series of Poker Main Event, right?

Somebody's been saving up. They've been wanting to play this their whole life. Maybe 10 friends got together, put in $1,000, and the winner goes to the main. And so they get there, and it's like, you know, they're trying to play well, they're trying to win money, but they also have non-economic incentives,

which totally make sense. Like, humans are not robots, right? The person doesn't want to bust on hand one, right? Like, if you gave them a pretty attractive opportunity on hand one, but there's a 30% chance they're going to go broke, they might not take it because they're like,

look, this is a once in a lifetime opportunity. I don't want to bust on hand one. That would really, like, make me extremely sad, you know. Economists would call it utility. Like, I would experience a lot of disutility if that happened. That's totally reasonable. And so the question that I enter the studio with, of like, so who's winning these things?

I realized, I find out, of course, it's Galen, Galens. And the question that you have to ask yourself, if you are somebody who wants to plausibly compete with Galens, is, are you even aware what Galens are doing? Yeah. Pablo Torre finds out is produced by, by Walter Avaroma, Maxwell Carney, Ryan Cortez, Juan Galindo, Patrick Kim, Neely Loman, Rob McRae, Matt Sullivan, Claire Taylor, and Chris Tuminello. Our studio engineering is by RG Systems.

Our sound design by Andrew Bursick and NGW Post, Digital Strategy by Bailey Carlin and Andrew Northern, and our theme song, as always, by John Bravo. We'll talk to you next time.