The name Waterhouse has been synonymous with Australian horseracing since 1898 when a 21-year-old named Charles Waterhouse started his bookmaking career and began a bookmaking dynasty which continued when his son Bill Waterhouse first fielded on Epsom Handicap day, 1954.

In 1973, Bill’s son Robbie followed the family tradition and fielded his first day at Newcastle. Amazingly, Robbie’s son Tom has also continued an extraordinary family journey by taking to the bookmaker’s stand for the first time in September, 2003, also at Newcastle, some 30 years after HIS dad.

Now there’s a bit of history BUT, as the television advertisement used to espouse, “Wait, there’s more”. . . Robbie Waterhouse married Gabriel (Gai) Marie Smith, daughter of legendary horse trainer Tommy Smith, and another chapter was added to what surely is Australia’s most famous racing family.

Without doubt, the most famous member of this extraordinary family is Bill Waterhouse. In the book, The Gambling Man written by Kevin Perkins, his amazing career as Australia’s biggest and most fearless bookmaker, who took on all of Australia’s biggest betting punters and beat them, is detailed to the ninth degree.

Any punter who wants to learn about the word “courage” and the ability to function under constant high stress pressure in the world’s toughest business (and it is a business), must read this book. At various times in our own punting we have all experienced the stressful moments when the gods are seemingly against us and as the songline almost goes, “disappointment became our closest friend”.

In moments of punting despair we should look no further than the inspiration the Waterhouse story offers: it shows that with courage and conviction success is not out of reach. It must be stated that Bill Waterhouse did not write the book, but the opinions offered by the author clearly indicate respect of the highest order. His research into the failures of punters that Bill took on, offers horseracing folklore’s most fascinating read.

One of the most absorbing chapters in the book is the one in which the raw emotions of the two gambling types, the punter and the bookmaker, are literally sliced open for public viewing. Seldom has the fascinating world of the racetrack been better portrayed. For novices to the punt it must be mind boggling to read and comprehend just exactly how the racetrack and its identities interact in what on face value, just seems a series of horse races.

According to the author, “The racetrack is unlike any other place on the earth in that it has a different set of values to the normal everyday world. Here reality rules supreme and the whole exercise in racecourse gambling is to be firmly in touch with reality”.

He adds, “It’s a mingling of faceless people where the only common denominator is money” and “all those opposing human forces play against one another trying to impose their wills on the outcome of a race”.

Amongst this throng of identities are the thousands of punters who “earn their living from racing” which includes “the small professional punters who continually win in every city . . . they have contacts, they watch the moves, it’s their livelihood and they do nothing except study racing full time. Waterhouse had hundreds of clients for whom a losing day was an exception . . . some of these punters were prodigious in their work. Successful punters were seen as people able to read available information: a matter of ability”.

When you think about it, that last observation about the “ability to read information”, sums up an important part of the punt. All punters have almost the same amount of form information available to them in these days of continual replays and form dissection by a myriad of experts via several media outlets. Nearly all pertinent form factors are there out in the open and what we really do not know is the fitness levels of some horses, especially those first-up, second-up or jumping distance towards more suitable dstances.

So, what stops the punter from winning regularly? The main reason, initially, can only be the inability to read the form properly. Naturally, other areas are significant as well. The ability to appreciate value, how to structure bet sizes and perhaps the most important reason – the psychological balance of the punter during winning and losing runs. There have been many punters who have been successful selectors but have not been able to transfer that ability to the actual betting side of the punting equation.

In all the articles I have written for PPM since 1998 I have endeavoured to provide help, for want of a better word, for the keen newbie punter; that is, the person who is new to the racetrack and seriously wants to improve their punting, by detailing my own punting foibles, my areas of expertise and the expertise of recognised professionals.
Earlier this year I had the great honour of meeting Bill Waterhouse in my capacity as a PPM contributor and interviewed him, with his daughter Louise present, in his Sydney office.

I have also had the pleasure of being able to “interview” Robbie Waterhouse, albeit via email, thus affording me the opportunity to pass onto PPM readers the thoughts of two racing minds whose total bookmaking/punting knowledge is extraordinary. In this series of articles I will be detailing and discussing the answers to the questions I set them.

The bookmaking odyssey of Bill Waterhouse actually started in 1938 at the age of 16, when he began clerking for his father; however, family pressure saw him study Arts and Law at Sydney University. Throughout his university days Bill worked at the races and he told me an interesting story about how, as I saw it, he began his bookmaking style. 

Apparently, in those days the weights for the following Saturday were available as early as Monday and young Bill prepared an all-in betting market for his University punting friends, and others, I suspect, as well.

To the uninitiated, all-in betting means if a horse does not start for whatever reason, you lose your money. Bill stated, “Due to the uncertainty and the number of nominations I sometimes had the favourite at 10/1, or in a big field at 20/1. That taught me a lot”. I bet it did!

In those days, Bill was not shy about having a bet on other games beside racing and in his first game of dominoes (yes, dominoes), he quickly lost a sizeable amount when playing for a penny a point. The word “desperado” comes to mind! I understood exactly where Bill was coming from, as it reminded me of my secondary school days when I played draughts at lunchtime for money. Is this how it all begins?

Eventually, Bill became a practicing barrister. He didn’t work on Mondays (settling day) and Wednesdays (raceday), but, as we all know, it was really racing blood he carried and when his brother Charlie died, suddenly, nature took over and a bookmaking career began such as the world had never seen.

To illustrate the magnitude of Bill Waterhouse’s bookmaking days, just remember that way back in 1968 he held the world’s biggest bet to lose $1 million dollars and the horse won. In 1968 1 litre of milk cost about $0.25 in Sydney, so in today’s money we are looking at a losing amount of over $5 million dollars. Which bookmaker would lay a bet that size these days?

The closest I can recall was when Bruce McHugh reputedly took on Kerry Packer over a number of races during one Easter weekend and won something like $8 million and promptly retired from bookmaking, thank you very much!

In The Gambling Man, Kevin Perkins describes gambling as “instant cash flow . . . it is more primeval in its viciousness than other forms of business” and with such viciousness “a winner must have an edge”.

He adds: “He (Bill Waterhouse) survived longer at the top because he possessed the best of the gambler’s legendary qualities – strength of character, keen intellect, balance, temperament and integrity . . . he took on everybody . . . he was unique and cannot be categorised . . . Waterhouse was betting the ring, taking the steel from not just one punter but up to 20 huge punters at the same time . . . he often deliberately bet a pro over the odds wanting his information”.

To fully understand Bill Waterhouse you have to realise that when he took on all-comers that some of the races he laid bets on were rigged, which he knew, yet he kept taking the bets. Why would a bookmaker do that? Why wouldn’t he just say no? Simply because he wanted to know their information, through their bets, and once he knew it he could adjust his markets accordingly and reduce the risk. Now that is what I call the art of bookmaking at its highest level. It must have taken some sort of courage and skill to think along those lines.

In order to win at the punt we must not only learn how to select winners but also, paradoxically, we must learn how to avoid losers. Most punters just look at the selection process; a bookmaker needs to look at the other side of the coin. What causes horses to lose because, simply, that is what bookmakers lay horses to do.

When I first set my questions for Bill Waterhouse I always had it in mind that I wanted to know what he knew about winning punters, as I am writing for a magazine that is specifically for the punter. I theorised that what he didn’t know about punters would be able to be written on the back of a postage stamp, with a large texta.

However, his answers to some questions took me aback for a moment or two and I had the sinking feeling I had set him questions that were not going to lead me anywhere.

Of course I was wrong because as we progressed I began to see his career in a different light. All his thinking was as a bookmaker and the punter was his challenge. I don’t need to know how a car operates under the bonnet as long as I can master its movement: he didn’t need to know how the punters operated but just be able to master their movements.    

Throughout The Gambling Man Kevin Perkins details the history of many famous punters. Bill Waterhouse took on such punters as Felipe Ysmael (The Babe), Frank Duval (The Hong Kong Tiger) and Peter Huxley: all men with seemingly unlimited betting money who are quite well known in Australian racing folklore.

According to Bill, “I beat them all, eventually”, and his betting duels with these legendary punters is clearly detailed across a number of chapters. However, buried in the book are potted histories and comments about several punters whose names I did not know . . . I can tell you I have read just about every Australian horseracing book written since 1968, and quite a few written prior to my interest in The Game, and although I had seen Michael Pitt in action, the other names were strangers to me.

I wondered what made these punters respected enough to gain a mention in a book detailing the exploits of a winning bookmaker in which you would expect punters to be more bashed than praised. Consequently, the first thing I did was compile a list of these people whose names included John “Dookum” Humphreys, Jimmy Jenkins, Les “Possum” Brougham, Barry Terry and Ray Hopkins and set questions expecting Bill to be able to tell me what their punting secrets and strategies were.

His answers to those initial questions were: “I never knew their strategies because they never told me”. When you think about it, and I didn’t when I set the questions, it makes sense. Why would they stroll up and pass on their secrets to the man they all fought to beat?

However, eventually the generic ability of these punters came through as other questions were answered. For instance, I asked: “Professional punters must have an edge to survive long term in the racing game. What are some of the edges, bar stable information, which successful professional punters possess?” To which Bill answered, “They must have the natural ability to be able to assess relevant form factors . . . Some punters formed partnerships and combined separate abilities in a team effort”.

From a punting point of view this was interesting. It seemed some groups of punters must have realised taking on all facets of formwork was too much for one person and therefore areas of expertise, both pre-race and on course, were “shared” and an attack on the bookmakers was mounted as a team effort.

This supposition was verified when I asked, “What was their “modus operandi” to which Bill answered: “Some were experts with weights, some with track ability, others on distance ability and others were really good on wet tracks. Some were able to judge the horses in the mounting yard, others could judge track gallops quite well and how horses pulled up.”

The part about “how horses are pulled up”, reminded me of a PPM article (May, 2004) in which respected US horse watcher, Joe Takach, stated, “During those years (12) my staff documented every single premature pull-up (horses coming to a dead stop within 150m past the finish line). Each day in every non-maiden race we listed horses that were premature pull-ups in their last outings. An unbelievable 91 per cent failed to visit the winners’ circle in their very next outing”.

I can imagine that the punters Bill mentioned, who watched how horses pulled up, worked along similar lines to Joe Takach and factored their post-race observations into future pre-race assessments with quite some success. Pre-race observation is more likely to be studied these days and anyone seriously interested in this area need go no further than the brilliant book Watching Racehorses: A Guide To Betting On Behaviour, written by Geoffrey Hutson. The author has categorised thousands of pre-race observations into 60 variables covering 10,509 horses which clearly indicate there are some signs which demand you do NOT back a horse no matter what the form suggests, and areas where the signs are positive.

In these days where time management seems to be an art as we all struggle to fit what seems like 30 hours into a 24 hour day, the team approach makes sense.

In my punting on Perth I openly admit to not having enough time to study the form and race replays for all meetings at outer city tracks such as Pinjarra, Bunbury, Geraldton and others. This impacts on my selecting ability with Perth’s 1mw (One Metro Win) and Class 6 races to the point where I cannot seriously attempt to crack most quadrella and treble races or even simple win or place betting as I am “undermanned” in the formlines of the lower class horses.

Although I can live with this, a team approach might be able to overcome this problem as it might for you, if there is some area of the selection, punting or review process, that causes you a major worry. Those of you who read my recent articles on American punter, Andrew Beyer will remember he stated his success came about because he was able to isolate two or three factors of the hundreds at the track and become an expert in those areas. In other words, he specialised and this is the general premise put forward by Bill Waterhouse about the “members” involved in a team approach.

One of my questions asked the obvious: “If you were a professional punter, what class of races would you concentrate on and which would you avoid?” Bill answered, he would concentrate on 2yo races as “good two-year-olds are speedier than the others” and he would “avoid distance races because of the unknown issue of pace” in the race.

This seems like Bill is advocating that a punter is better off sticking to the sprints. When you see some of the early dawdling and what seems like just sprints home in the average distance races, his point is quite valid. Naturally, the distance Group races may be exceptions. Generally there is quite a bit of serious jostling early and pace is of a lesser issue, than races where the regular week in week out plodders are held together for their burst in the straight.

I then asked: “What is the most important of these two factors: form or value?” I was interested in Bill’s answer because there are some punters who will back all their selections regardless of the odds, simply because they selected them on form and that they will let the odds work themselves out in the long run.

When I asked Bill for his opinion on this age-old punting argument he answered quite swiftly with one word:  “value” (in fact, he mentioned the word “value” several times during the course of the interview), and added that “form was not the main thing”.

However, he qualified both statements by adding “value has to be married to form”. In assessing those answers I sense he meant that there was no point in getting value about a horse who is out of form. At the same time, there is no point in backing a horse in form if the value is not there, either. Alas, solving this conundrum is what keeps us punters on our toes!

Earlier I mentioned the names of a few punters I had never heard of who were highly respected for certain racetrack skills. Some, however, were skilled in the selection facet but not with betting expertise. I wondered about their weaknesses: it is all very well knowing someone’s skills but often we can learn from the other side of the coin as well.

Years ago, when I was a keen snooker and pub pool player (naturally, for money – well, it was actually pots of beer which is the same as money if you are not paying!), I used to watch the popular snooker program Pot Black.

All I learned from that show was that the players involved were extraordinarily brilliant at potting and placing the cue ball in required positions for their next shot.

That was, of course, a valuable insight but long term I learnt more from the poor shot selection and placement of the cue ball from the players I challenged personally. Their weakness, as I learned, was their inability to think past one shot which was often the long term edge I needed to win a respectable number of games.

Consequently, I wondered about the weaknesses of the respected punters mentioned in The Gambling Man. I read about an expert pricing man like Barry Terry whose prices were “that accurate it was almost like reading Sunday’s paper”, yet he could not win at the punt because “he didn’t have the balanced judgement to gamble successfully himself”.

When I asked Bill about the brilliant form assessors like Barry Terry and what caused their punting demise he said, “They lost because they still backed every one of their selections even if they were under their own odds assessment. They lost sense of value”.

This goes back to Bill’s answer to an earlier question where he said the punt is primarily about value. Bill believed he beat all the punters who tackled him because eventually they took “unders too often” and (my paraphrasing) the percentages between number of winners versus the percentage price of the winner did not equate to value in the long run.

Over the years, there have been many articles in the pages of PPM detailing the percentages and methodology of backing several runners in a race. I asked a number of questions based around this idea: “Did the best punters back several horses per race? Is it a good idea to do this or is it really just another form of betting odds on as when the percentages are totalled this seems the case”, and “If you were a professional punter would you bet:
a)    to win $X on each of several selections; or
b)    bet flat stake on all runners; or
c)    back one and save on the others?”

Bill replied: “It is a good idea as a punter to back more than one horse per race depending on the odds available. Each punter had different methods with multiple bets per race but if I were to bet I would make a book against the bookmaker ranging between 80-90 per cent. If the punters prices are good enough he will win with this method.”

Making a book against the bookmaker means formulating a set of prices where the percentages of the prices add up to a set percentage figure such as 80 per cent. For instance, in a three horse field you might price Horse A at 7/4 (36 per cent), Horse B at 5/2 (28 per cent) and Horse C at 5/1 (16 per cent) which totals 80 per cent.

If the bookmaker has Horse A at 6/4, Horse B at 3/1 and Horse C at 6/1 you would back Horses B and C only because their prices are equal to, or better than the prices you set on their chances. If, in the long term, your book (percentages) are more accurate than the bookmaker’s book, you will win.

I asked the old perennial: “What main piece of advice would you give a punter relevant to his monetary betting”. As mentioned earlier the word “value” was again reiterated as was the “making a book against the bookmaker” tenet and the unforgivable “do not chase losses”; however, one part of his reply staggered me a fraction as it seemed out of left field for a man so disciplined. Bill said: “Play up your winnings”.

In other words, when the winners flow increase your bet size! Now that IS different, especially coming from a bookmaker.

In 1978, the start of a punting revolution enveloped the Australian horseracing world when legendary punter Don Scott published the first of his trilogy of punting books called Winning. This relatively thin volume opened up to the world the winning habits of a punter whose methodology was the same as mentioned by Bill Waterhouse; that is, he would make a book against the bookmakers.

For the first time the Australian punter was privy to a set of rating figures for the various classes in Australia and the method of calculating post-race ratings where a single figure represented the performance of all horses in a race. It was compelling reading and I vividly remember receiving my copy from Mittys Of Melbourne one Wednesday, prior to hopping onto the train bound for the races at Werribee. I read the whole book twice: on the way to the races, at the track seated in the grandstand (I must have looked a forlorn figure sitting alone reading a book when a race meeting was on but the actual racing was running a bad second that day), and on the way home. The book was a revelation and I could not put it down.

In 1982 , Don published an infinitely more comprehensive edition, called The Winning Way, which spawned a multitude of punters across the country who suddenly appeared at the racetrack with “their” ratings for the day. The punt was on for young and old and several racetrack cronies I met at the races in those days all seemed to come up with the same top two or three selections with just the order changed.

Those punters who were computer savvy wrote programs and adjusted the various factors they considered important into kilogram figures and with a flick of the wrist, seemingly, could adjust their figures. There must have been thousands and thousands all doing their version of the Don Scott approach.

It has been claimed that “publicity is the kiss of death for a gambler”, and I assume this meant that once the winning gambler publishes his tips or is publicly identified, the public moves in and kills the vital edge needed for success.

In the 1940s a US punter, Robert Saunders Dowst, published a set of figures which seemingly made it easy to win on the punt based, broadly, on the win strike rate as well as the place strike rate of horses aged between 3yo and 5yo. Within two years too many punters had joined the push on those horses and the system lost consistently until the name Dowst virtually disappeared from US racing discussions.

I asked Bill, “Was this the case for Don Scott? Why did he lose?” The reply was simply that “the value went“ on the horses he rated because of the copycat punters, I mentioned earlier, who also came up with many of the same horses as Don selected.

Like many “experts” he eventually succumbed to accepting undervalued prices and the plain fact is that you must beat the racetrack percentages otherwise you will lose. This happened to Don Scott and if it can happen to a man with his ability, it can happen to all punters.

Next month: We continue the Bill Waterhouse interview. Click here to read Part 2.

By Roman Kozlovski