I ended up down an unusual rabbit hole the other day – electronic betting systems at the Hong Kong Jockey Club. So here goes a quick look at their pioneering efforts to make it easy for punters to pout their money on Hong Kong horse races from the convenience of their own home.
I started learnt about their electronic betting systems in this 2018 article from Bloomberg about a professional gambler who used a statistical model to bet on Hong Kong horse races.
The Gambler Who Cracked the Horse-Racing Code
Bill Benter did the impossible: He wrote an algorithm that couldn’t lose at the track. Close to a billion dollars later, he tells his story for the first time.
By Kit Chellel
May 03, 2018
Benter taught himself advanced statistics and learned to write software on an early PC with a green-and-black screen. Meanwhile, in the fall of 1984, Woods flew to Hong Kong and sent back a stack of yearbooks containing the results of thousands of races. Benter hired two women to key the results into a database by hand so he could spend more time studying regressions and developing code. It took nine months. In September 1985 he flew to Hong Kong with three bulky IBM computers in his checked luggage.
Twice a week, on race days, Benter would sit at the computer and Woods would study the racing form. Early on, the betting program Benter had written spat out bizarre predictions, and Woods, with his yearlong head start studying the Hong Kong tracks, would correct them. They used a telephone account at the Jockey Club to call in their bets and watched the races on TV. By the end of Benter’s first season in Hong Kong, in the summer of 1986, he and Woods had lost $120,000 of their $150,000 stake. Benter flew back to Vegas to beg for investment, unsuccessfully, and Woods went to South Korea to gamble.
In September 1988, having amassed a few hundred thousand dollars, Benter returned to Hong Kong. In his first year after returning to Hong Kong, Benter won (as he recalls) $600,000. The next racing season, ending in the summer of 1990, he lost a little but was still up overall. When the volume of bets rose, he recruited English-speaking Filipinos from the ranks of the city’s housekeepers to relay his bets to the Jockey Club’s Telebet phone lines, reading wagers at the rate of eight a minute.
A breakthrough came when Benter hit on the idea of incorporating a data set hiding in plain sight: the Jockey Club’s publicly available betting odds. Building his own set of odds from scratch had been profitable, but he found that using the public odds as a starting point and refining them with his proprietary algorithm was dramatically more profitable. He considered the move his single most important innovation, and in the 1990-91 season, he said, he won about $3 million.
The following year the Hong Kong Jockey Club phoned Benter at an office he’d established in Happy Valley. He winced, remembering the meaty hand of the Las Vegas pit boss on his shoulder. But instead of threatening him, a Jockey Club salesperson said, “You are one of our best customers. What can we do to help you?” The club wasn’t a casino trying to root out gamblers who regularly beat the house; its incentive was to maximize betting activity so more revenue was available for Hong Kong charities and the government. Benter asked if it was possible to place his bets electronically instead of over the phone. The Jockey Club agreed to install what he called the “Big CIT”—a customer input terminal. He ran a cable from his computers directly into the machine and increased his betting.
So what were the customer input terminals?
The story starts in 1977, when the Hong Kong Jockey Club contracted Automated Systems (H.K.) Limited to deliver a computerised betting system.
Telephone Betting System for the Royal Hong Kong Jockey Club
In 1977, Automated Systems Holdings Limited became the primary contractor for the Royal Hong Kong Jockey Club’s telephone betting system, a trial against an IBM-developed solution. The system was implemented on 30 VAX supermini and minicomputers. The processors were linked with an eventual 1,000 terminals located in 120 off-course betting centres throughout the territory. To maintain a high level of service, the club had specified a fail-safe system design which incorporated recovery facilities to allow dynamic isolation of failed components or computer systems on-line with full data integrity.
Which was expanded in 1989 to allow punters to use special devices to place bets directly into the telephone betting system.
Off-course Betting System for the Royal Hong Kong Jockey Club
In early 1989, ASL serviced the Royal Hong Kong Jockey Club again after the telephone betting system by supplying over HK$1 million worth of EASYway networking equipment and ABLE Computer to the Club for its Off-course Betting System. The inputting device was called Customer Input Terminal (CIT). The system provided great convenience to off-course punters who could just plug CIT into any telephone socket to place their bets, without the need to talk to a telephone operator. This reduced the operator’s involvement and call connecting time. EASYway also possessed the advantage of being flexible and expandable in incorporating with future standards.
The early Customer Input Terminals look clunky by today’s standards, with just five lines of text and a handful of buttons.
Hong Kong Jockey Club
But the design of the devices evolved over the years.
Hong Kong Jockey Club
But given Hong Kong’s love of gambling, the devices were still popular – Customer Input Terminals were the source of 17% betting turnover by 1997, with over 90,000 users by 2001.
However this made the uptime of the system mission critical for the Jockey Club.
Jockey Club technicians race against clock to eradicate CIT bugs
Robin Parke
3 November 1997
Hong Kong Jockey Club technicians were working round the clock yesterday to iron out a communications fault that played havoc with the popular Customer Input Terminal (CIT) system on Saturday.
Frustrated punters were forced into long delays before being able to place bets on the nine-event Happy Valley programme – or missed out completely. At one stage there was a complete break in the system for four minutes.
From shortly after the final event at the city track until last night, technicians were still working to find the gremlins and ensure that the CIT network would be up and running efficiently before tomorrow’s massive 10-event card.
Senior Jockey Club betting official Darryll Plowright said yesterday: ‘The information technology people are hard at it and we are confident that it will be fixed in good time for Tuesday’s meeting.
‘It is a fault in the communications system but I cannot be any more specific than that. They have been working since 6 pm on Saturday night and I have had reports since then.
Beside the involvement of local company Automated Systems (H.K.) Limited to develop the backend system, the Customer Input Terminal were also developed in Hong Kong by a company called Varitronix.
A September 1998 report by the Hong Kong Commission on Innovation and Technology cited Varitronix as a local success story.
Varitronix Ltd. was established in 1978 by a group of academics from Hong Kong’s universities with an initial investment of $1.5 million. It has since grown to be one of the world’s leading manufacturers of liquid crystal display (LCD), with a strong capability in custom design and manufacture of LCD-related products. Varitronix was publicly listed in 1991 and currently has a total market capitalisation of over $4 billion.
From the outset, Varitronix has adopted an R&D-driven strategy, focusing on custom design instead of competing on price with large foreign manufacturers of standard LCD units. To add value to products and drive further growth of the company, Varitronix has diversified into designing and making end products that incorporate its own LCDs. A notable example is the Customer Input Terminal for off-course betting that Varitronix makes for the Hong Kong Jockey Club.
Varitronix’s competitive strength mainly lies in its technological capability as well as ability to leverage on the synergy between Hong Kong and the Mainland – technology-intensive product development and front-end production in Hong Kong; and labour-intensive back-end production in the Mainland.
Information Display journal in 1999 describing the current generation of devices as:
This wireless version of Varitronix’s Telebet customer-input terminal is used by the Hong Kong Jockey Club. Over 80,000 of the older, wired terminals are currently in use. Both versions use a Varitronix touchsensitive overlay on a Varitronix-made display.
A clunky Motorola radio bolted onto the top of the fifth generation Customer Input Terminal replacing the need to plug into a telephone line.
Hong Kong Jockey Club
But by 1999 the sixth generation device of looked much the same as any of the personal digital assistants (PDAs) available at the time.
Hong Kong Jockey Club
But a few years later, having to carry a dedicated device just to place bets was seen as old hat, so the Jockey Club developed an add-on for the Handspring Visor PDA – but didn’t expect it to become popular.
Hong Kong Jockey Club meets the growing demand for hand-held betting service
SCMP Reporter
9 October 2001
Local punters can now make bets on horse races and buy Mark Six lottery tickets over their personal digital assistants (PDAs), but hand-held devices will never compete with mobile betting, according to the Hong Kong Jockey Club.
In response to the growing number of people using PDAs in Hong Kong, the Jockey Club launched its PDA expansion module last week.
The Customer Input Terminal (CIT – PDA) connects with the expansion slot on a Handspring Visor and any standard phone line.
‘We found it exciting to have over 360 people subscribe to rent PDAs with our expansion modules within six working days,’ said Jockey Club spokeswoman Lillian Chau.
Both the Visor PDAs and the expansion module are available for rent at the club. Annual fees are HK$500, with a deposit of HK$1,000 for a Visor Solo model and HK$500 for the module.
However, the Jockey Club does not anticipate PDA betting to become a major trend. Instead, it released the new product just to ‘provide some channels [for betting] for specific users’.
And the development of the Customer Input Terminal continued with an eighth generation device launched in 2004, which required a 63 page manual to describe all of the available features.
Hong Kong Jockey Club
But with the Jockey Club launching an iPhone betting app in July 2011, followed by an Android app in December 2011, now it was the smartphone age – and the end of the Customer Input Terminal service came in 2016.
Customer Input Terminal service to terminate from 1 August
21/07/2016
The Club will cease its Customer Input Terminal (CIT) service from 1 August this year. The device, which was first introduced in 1988, can no longer be supported due to software constraints, while some hardware components are no longer available.
CIT customers were informed of the Club’s decision to terminate the service three years ago, during which time the Club provided assistance to switch to other betting channels. Other channels available include the Mobile Betting App*, Online Betting Service (eWin), Telebet and 1886 Automated Betting Services.
Launched some 28 years ago, the CIT was one of the Club’s most pioneering products, and in its original form allowed customers to bet via fixed phone lines. Wireless versions followed, culminating in the present eighth generation CIT. With the Internet and mobile phones providing customers with greater, multi-function, convenience, it is finally time to retire the CIT.
The Club will keep on developing innovative and interactive services, aiming at bringing customers an ever higher quality of betting entertainment experience.
Ending an era of highly specialised mobile devices.
Footnote: another Hong Kong online betting system
Mango was a network launched in 2002 by Telecom Digital Holdings Ltd using the Ericsson developed Mobitex packet switched data technology, accessed by their MangoCombo devices.
But they could do more than just place bets with the Jockey Club.
– get continuously updated information and odds on horse racing and football matches
– enable subscribers to place bets on horse racing and football matches, buy Mark-Six, and trade Hong Kong listed shares
– enable subscribers to transfer funds between their designated account and betting account
– provide updated market price on Hong Kong listed stocks and indices and enable subscribers to conduct securities trading via TD Securities
– enable users to check cash and securities balances on stock accounts and status of transaction orders
– provide access to e-mail, SMS and with diary function
The MangoCombo user manual including the full list of features.
Further reading
