If you’ve ever taken a high school level econ class, one of the first concepts you learn is that there is no such thing as a free lunch — meaning, it is impossible to get something for nothing. There’s always some kind of cost or risk. Graduate high school, take a few finance classes in college, and you’ll learn about efficient market hypothesis — an assertion that all information is priced into the asset. This has been debated ad-nauseam but most people, even successful traders, can agree that the market is fairly efficient and it at least takes work to make money. You can’t just pick it up off the ground. And I mostly agree… EXCEPT… there are some rare opportunities… and nobody ever really talks about them. I’d like share some of my “free money” experiences. None of them were ever scalable enough for me to get rich but they all taught me something.
So what is “free money”?
My loose definition is basically that it’s an opportunity to make money that shouldn’t exist. It can be arbitrage, or some kind of structural glitch or anomaly to be exploited, or perhaps it’s money being given away by another party for reasons unknown (or maybe they don’t even know they’re giving it away).
How does one find “free money”?
You can’t google search it or find it in any book or manual. It’s part luck and part observation. You just need to pay attention. Question everything. Have a nose for the unusual and try to understand why it exists. It helps to already have a systematic understanding of whatever you are engaged in, whether it be gambling, trading, real estate, business, retail arbitrage, whatever it is.
Is there risk to “free money”?
The real risk is being a sucker — thinking it’s a free money opportunity but not reading between the lines. If you are a more skeptical mind, like myself, you may have an initial reaction of excitement to opportunity, only to later question why it exists and what makes you so special to be able to take it. Luckily I have no stories of thinking something was free money and getting totally screwed. Do your research. See all the angles. Run it by someone wiser than you. For anyone who follows bitcoin, there was a reason why Mt. Gox traded at fractions of the price of all the other exchanges. That’s an obvious situation where you should be able to smell a fish rather than think “omg free money”.
It helps to have a mindset of not wanting to lose money rather than trying to make money. In my experience, the scam stories always start with a victim who could only see the dollar signs and thus failed to ask the critical questions.
Y’all probably thought this post would be about trading, right? Nah, it’s about gambling on a football game.
Part I: Monday Night Freeroll
Sometimes the Gods just want to smile upon you with great fortune — free money in plain sight! There is no lesson here about keen observation or seeing all the angles. I guess the only lesson here is sometimes ‘too good to be true’ is actually true (just make sure you can verify that). This is my little coming-of-age action junkie story.
It was September 2006. I just started my senior year in high school. I’ve been playing poker for about a year and a half at this point. I had money in Pokerstars and Party Poker, while using Neteller as a money merchant to transfer funds. By perusing the Sports Betting forum at TwoPlusTwo, I learned about a betting promotion from Mansion sports book. It seemed too good to be true.
First Monday Night game of the year: Steelers -4.5 vs. the Dolphins. The defending champions against a newly-minted Dolphins team led by hot shot college coach Nick Saban and former Vikings Pro-Bowl QB Daunte Culpepper
You had to bet $1100 to win $1000.
Yes, you could only take the Steelers side of the bet (maybe the promotion was to hedge some whale who bet a boatload on the Phins, who knows?).
The promotion? If the Steelers failed to cover… you didn’t lose! Mansion would refund losses within 1-3 days. You would either have $2100 in your account or $1100. It was a true freeroll!
You were not allowed to hedge by placing a bet on the Dolphins. Some bettors with multiple sports betting accounts did hedge to lock-in a profit. Not that I’d ever do that, as hedging is -EV.
This had to be a scam, right? Isn’t there something in the fine print I was overlooking? A catch? Nope. The veteran sports betting junkies on the forum said this was totally legit. I didn’t have much to go on other than faith in 2+2, which was the smartest gambling community online by far. It was also a community that reported scammers, welchers, and other bad business practice — I know, big surprise, could you imagine that the gambling world would be so seedy? These were guys who were too careful to be scammed. Mansion wasn’t some fly-by-night operation incorporated on some tiny island, they were a reputable book that did serious volume so even $5.5 million (the point at which they capped the promo) was a drop in the bucket for them. So why the hell not? It was a no-brainer. I opened an account and made a deposit.
Mansion required a photo ID of someone older than 18 at the time so the account couldn’t be under my name. So, naturally, I snagged my dad’s driver’s license and entered his information to get the account approved. (If you’re reading this dad, I’m sorry, but it was free money and you would have said no to anything involving gambling.)
I even got my cousin Arthur, who would share my Stars account to play sit’n’go tournaments, to open a second account at Mansion so we could double down. I told him to use his dad’s (my uncle’s) ID but he took his sweet time and by the time the account was approved, Mansion closed the window for promotion bets. More on this at the end.
Steelers starting quarterback Ben Roethlisberger, who had sustained injuries in an off-season motorcycle crash, is rushed to the hospital for an emergency appendectomy 4 days before kickoff and is listed as OUT. The line moves to a PICK-EM (a line of 0, meaning no favorite or underdog). Career journeyman Charlie “Chaz” Batch is named starter. The promotion window had closed and early bettors were locked in at the opening line of -4.5. Basically, we were all bagged with an extra 4.5 points from the “fair line”, which I’d estimate is a 35-42% chance to cover. Thankfully the handicappers had no idea just how washed up Daunte Culpepper really was…
It was a sloppy undisciplined game and I don’t remember much about it except the 4th quarter. It wasn’t looking great with the Dolphins leading 17-14 halfway into the 4th. I needed at least a Steelers touchdown and another score, and no more Dolphins scores, to cover with only half a quarter to go. The Steelers offense has looked like garbage all day.
6:11 to go and Steelers deep in their own territory.
Chaz Batch drops back to pass… HE THROWS A STRIKE TO HEALTH MILLER WHO ELUDES A TACKLER AND RUMBLES INTO THE ENDZONE FOR AN 87-YARD TOUCHDOWN!!! 21-17 STEELERS!
— Pittsburgh Steelers (@steelers) September 7, 2017
But I’m still short that tricky half point without a lot of time left. Too many scenarios where Dolphins answer and take up a lot of clock, or fail on a long possesion, leaving the Steelers to run out clock rather than increase their lead.
Next possession, Dolphins ball. CULPEPPER THROWS A PICK! Pitt quickly gets into FG range. Jeff Reed, all-time best kicker at the notoriously tough-for-kicker’s Heinz Field… from 44 yards… I’m chewing my nails… he’s got this, no sweat…
… and he MISSES the 44 yarder! 17-year old me is thinking “fuckfuckfuckfuck that was my cover goddamnit they blew it!”
Dolphins have the ball. I need some kind of miracle here because it’s either Dolphins touchdown or Steelers run clock out. Culpeppers drops back to pass… fires one downfield…
…and it’s PICKED OFF AGAIN BY JOEY PORTER!!! HE TAKES IT 42 YARDS INTO THE ENDZONE, 28-17 STEELERS!!!!
ahhhhhhhhh SHOW ME THE $$$$$$!!!! i love sports betting!!! what a rush!
Writing it out can’t even do this moment justice. I wish I could find video footage because I’d love to relive that all over again. $1000 was a lot of money to me when I was 17.
I was fist pumping and whisper-shouting the entire night. Not that it was unusual for me to show passion over a sports game, but a game where I didn’t care about either team? I just felt like I had to keep it under wraps. I doubt my family would’ve known the difference anyway. I did some late night grocery shopping at Albertsons that night and while all alone in the chips and soda aisle, I just spontaneously started jumping for joy, hop stepping all the way to frozen foods. I felt like the luckiest kid in the world!
The following morning, I walk into class and I just don’t give a shit about anything. Everyone else is talking about exams, girls, college applications, plans for the weekend, other silly high school stuff, and uh.. I just made a grand on a football game. I’m playing a different game than everyone else. It’s become part of my identity. Am I the smartest? Most athletic? Most popular or handsome? No to all of them, not even close. I am just the kid who makes the free money while nobody is looking.
And I still am. I know I will always make money, whether it’s through trading or just walking into it the most half-assed way imaginable.
Although I had withdrawn the winnings from my own account, I used Arthur’s account to make actual bets on games. Yeah, they got me hooked, I’ll admit. That was the point of the promo.
Fast forward one month later: UIGEA was signed into law and it became nearly impossible to move money to and from gambling/poker sites. Poof. Neteller was no longer a transfer option for U.S. customers and our funds under my uncle’s name was stuck in Mansion. So net of (lost) deposits, we actually didn’t make any money from the promotion at all.
To this day, our money is still on Mansion and I’ve always entertained getting it back if I decide to take a vacation to London — although I think my uncle might have to get the money since it’s under his name…