How a “professional sports gambler” is disrupting Jeopardy…

Current champ is smart and calculating. Is that cheating?
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Though I’m not particularly strong at trivia, I enjoy watching Jeopardy

In part as a daily test of whether I can hang in there with the contestants (Answer: not in most categories) … and, largely because – in my stint as a teacher – I became a student f how people think … how they store, combine, and retrieve information. Think: connect the dots.

The current Jeopardy champ — James Holzhauer– is a professional sports bettor … and, he’s  setting records.

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Holzhauer has won 22 straight games … that’s the 2nd most on the all-time list … the record is 74 by a “normal” guy named Ken Jennings … the average Jeopardy champ only wins 2 or 3 games..

Most impressive is that Holzhauer has already won over $1.6 million about 2/3s of the way towards Jenning’s haul of $2.5 million. Working the arithmetic, Holzhauer has been winning about $75,000 per day … which is more than double Jenning’s daily take.

How Holzhauer is doing it is raising eye-brows in the Jeopardy community. Part astonishment and part calls of “foul”.

So how exactly is Holzhauer doing it?

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First, let there be no doubt about it, Holzhauer is one smart dude.

He has bandwidth (broad range of knowledge), depth (the trivia) … has lightning fast retrieval of most answers … and an uncanny ability to milk the clues (spot the “tells” that trigger answers stored in long-term memory).

He also has the fast reflexes and precision timing that’s needed to “buzz in” at exactly the right time … when the buzz-in period starts, but before the other players chime in. That skill kinda reminds me of flash traders who exploit nanosecond opportunity windows.

OK, those are the basics … skills that all Jeopardy champs have more or less.

What makes Holzhauer successful (and controversial) is his game strategy … which reflects his mindset as a professional sports gambler.

Reduced to its essence, here’s what Holzhauer does…

He first attacks the high value clues. These are the hardest questions … which most players – individually and as a group – usually save for last.

Why does he do it?

He’s confident and road-tested. He answers more than 95% of the questions correctly, so odds are in his favor) … and, as a pro gambler, he’s used to placing big bets.

His opponents, though, usually start the game with some nerves and anxiety … they’d prefer a couple of batting practice fast balls down the middle before hard sliders on the black edges of the plate.

More important, his strategy is to accumulate as much money as he can … as quickly as he can.

Part of that is certainly to discourage his opponents whose frustration becomes visible quickly… and who sometimes seem to throw in the towel early.

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Another part is pure game strategy.

Many players try to skip around the board trying to find the coveted daily doubles … squares that allow them to bet all or part of the money that they’ve accumulated up to that point.

But, the problem for most players is that they haven’t accumulated much money before they land on the daily double … and, they cognitively under-estimate their chances of answering the question correctly, and are hesitant to bet much of their accumulated winnings. In psyche-tech-speak, that’s called “aversion to losses”.

Not so with Holzhauer.

Scoring the high value clues first builds his war chest of money … and he usually goes “all in” on his early round daily doubles, knowing that the odds are in his favor since his batting average is over 95%

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In the Double Jeopardy round, Holzhauer’s betting strategy changes when he lands on a daily double.

By then, he has accumulated a pretty big lead, so he does a lightning fast calculation of how much he can lose and still keep his opponents far at bay.

When the Double Jeopardy round ends, the game is usually a runaway … meaning that Holzhauer’s opponents can’t catch him unless he makes a dumb bet … and, that just doesn’t happen.

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His Final Jeopardy bet is usually big … pretty much what he can lose and still win assuming that his closest opponent goes all in and answers correctly.

So, there’s a “multiplier effect”Holzhauer’s early game winnings allow him to maximize the benefit of the daily doubles that he scores … which builds his war chest … which allows an over-sized bet in Final Jeopardy.

Put it all together, and you win 22 straight games … and average about $75,000 in winnings each day.

It’s that simple.

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P.S. Holzhauer doesn’t play again until Jeopardy is done with a 2 week long teacher’s tournament.

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