Billy Walters is one of the more colorful and controversial characters who’s inhabited the Vegas scene over the past several decades. Here’s a brief bio (for those who don’t live in the Bluegrass State).
Born in Munfordville, Kentucky (population 1,400 at the time), Billy’s father died when he was a baby and he was raised by his grandmother. On her way to work as a cleaning lady, she would drop him off at a pool room owned by his uncle. At age four, Billy began shooting pool. "More skullduggery goes on in a pool room than anywhere," he says. "It’s the greatest place in the world to learn what life is all about."
After a short stint as a bookmaker and an arrest in Kentucky in the early ’80s, Billy made the pilgrimage to Las Vegas in his mid-30s. Here, he was part of the Computer Group, the first gamblers to successfully use computers to analyze football. They bankrupted bookmakers from coast to coast and Walters, now known as "the most dangerous sports bettor in Nevada" by oddsmakers, claims he’s never had a losing year betting sports.
In his early days, Billy was a self-described degenerate gambler. Also, Walters and other Computer Group members were indicted for running what prosecutors called an illegal bookmaking operation, though all were acquitted in 1987. He was also indicted three times on money-laundering and conspiracy charges between 1986 and 1999, but all charges were dismissed and the $2.8 million confiscated from his safety-deposit box was returned.
Since 1988, Billy has spent most of his time developing and operating his company, the Walters Group. Today, he owns golf courses, auto dealerships, and commercial real estate; he trades stocks and continues to bet on sports.
The latest investigation -- the one you’re referring to that broke a couple weeks ago -- by the FBI, SEC, and Manhattan U.S Attorney’s office, revolves around possible insider trading in conjunction with billionaire, sports bettor, and Las Vegas investor Carl Icahn and pro golfer Phil Mickelson. Investigators, reportedly, are interested in large options trades made by Walters and Mickelson in advance of Icahn’s attempt to buy Clorox for $10.2 billion in 2011 (2012 trades in Dean Foods Co. are also, reportedly, under investigation).
Walters has confirmed that he knows both Icahn (whom he met when the latter owned the Stratosphere) and Mickelson (with whom he’s played golf), but he vociferously denies violating any trading laws. In fact, he hasn’t been charged with any crime; he told USA Today that he learned of the investigation when he read about it in the Wall Street Journal and that no one from law enforcement has contacted him before or since the story broke.
To answer your question, it’s difficult to determine "the Las Vegas view of the man." For example, no polls have been conducted or letters to the editor printed about him. On the other hand one could, if one were so inclined, read between the lines of a Las Vegas Review-Journal’s feature story on the investigation.
The article focuses on how tenuous the case against the three traders seems to be. In a nutshell, the government might have to prove that Icahn was an insider (in the failed Clorox takeover, he was always on the outside) and that any information he might have leaked breached a fiduciary or confidentiality duty.
Then, the case might hinge on to whom Icahn had a duty. Since Clorox rejected the hostile bid, unless he was muzzled by a non-disclosure agreement, Icahn would likely not be breaching a duty to Clorox shareholders. He might have had a duty to his own shareholders, but that would depend on the technical rules of his hedge fund.
Meanwhile, all the publicity of the case has already hindered the investigation’s ability to employ wiretaps and consensual recordings, as well as the cooperation of witnesses, crucial government tactics in insider-trading cases.
The article quoted Harvey Pitt, a former chairman of the Securities and Exchange Commission, as saying, "The publicity is going to make this a lot more difficult, if there ever was a case."
And that’s just Icahn, who’d be the tipster. There’s another set of rules, equally arcane, for the "tippees," in this case Mickelson and Walters.
At this point, of course, it’s all speculation since, so far, nothing has happened except a leak about an investigation into a few trades, governed by highly technical rules, that has dragged Icahn’s, Walters’, and Mickelson’s names through the mud.
This is speaking only for ourselves, since we can’t speak for anyone else. But we do like one statement that Walters made to the Review-Journal: "I have studied and invested in the stock market for many years and no one says anything when I lose money."
While notoriously guarded about his wagering activities, we’ve covered Billy Walters in various ways: a chapter on computerized sports betting in Ian Andersen’s Burning the Tables in Las Vegas (1999); another chapter called "The Line Mover" in Michael Konik’s Telling Lies and Getting Paid (2001); and an epic interview with him in Gambling Wizards (2002). All these, and more, are reprinted in our 103-page Walters Report (available as a pdf-download e-book, only, for $4.95).
