A bit of a Christmas mystery

What looks strange about £21.5m?

In an era where it’s becoming easier than ever to generate code and deploy autonomous tasks with AI, I thought I’d share this brief Christmas story about a runaway wager from my first book:

BY THE TIME THE 2011 Christmas Hurdle at Dublin’s Leopardstown Racecourse reached the halfway mark, the race was as good as won. It was just after two o’clock, and the horse named Voler La Vedette was already leading by a good distance. As the hooves pounded the ground on that cold December afternoon, nobody with any sense would have bet against that horse.

Yet somebody did. Even as Voler La Vedette approached the line, the Betfair online market was displaying extremely favorable odds for the horse that was almost certain to win. It appeared that someone was happy to accept bets at odds of 28: for every £1 bet, the bettor was offering to pay £28 if the horse won. Very happy, in fact. This remarkably pessimistic gambler was offering to accept £21 million worth of bets. If Voler La Vedette came first, the gambler would be on the hook for almost £600 million.

Soon after the race finished, one Betfair user posted a message on a website forum. Having witnessed the whole bizarre situation, the user joked that someone must have been giving bettors a Christmas bonus. Others chipped in with potential explanations for the mishap. Maybe a gambler had suffered an attack of “fat fingers” and hit the wrong number on the keyboard?

It didn’t take long for another user to suggest what might really have been going on. The person had noticed something odd about that offer to match £21 million of bets. To be precise, the number displayed on the exchange was just under £21.5 million. The user pointed out that computer programs often store binary data in units that contain thirty-two values, known as “bits.” So, if the rogue gambler had designed a 32-bit program to bet automatically, the largest positive number the bot would be able to input on the exchange would be 2,147,483,648 pence. Which meant that if the bot had been doubling up its bets—just as misguided Parisian gamblers used to do while betting on roulette in the eighteenth century—£21.5 million is the highest it would have been able to go.

It turned out to be a superb piece of detective work. Two days later Betfair admitted that the error had indeed been caused by a faulty bot. “Due to a technical glitch within the core exchange database,” they said, “one of the bets evaded the prevention system and was shown on the site.” Apparently, the bot’s owner had less than £1,000 in an account at the time, so as well as fixing the glitch, Betfair voided the bets that had been made.

As several Betfair users had already pointed out, such ridiculous odds should never have been available. The two hundred or so gamblers who had bet on the race would therefore have struggled to persuade a lawyer to take their case. “You cannot win—or lose—what is not there in the first place,” Greg Wood, the Guardian’s racing correspondent, wrote at the time, “and even the most opportunistic ambulance-chaser is likely to take one look at this fact and point to the door.”

Unfortunately, the damage created by bots isn’t always so limited. Computer trading software is also becoming popular in finance, where the stakes can be much higher. Six months after the Voler La Vedette bot got its odds wrong, one financial company was to discover just how expensive a troublesome program could be…