It Happened in Vegas: How Billy Walters Saw a Hot Hand Go Cold

It Happened in Vegas: How Billy Walters Saw a Hot Hand Go Cold

Southeast of the Las Vegas Strip, on the deserted fairways of Stallion Mountain Golf Club, the signs were everywhere: Billy Walters was running out of luck.

For three decades Walters, often considered the most successful sports gambler in the country, had fed on the heady exuberance of Sin City. Nowhere else was the boom wilder, the consumption more conspicuous. By the early 2000s, he’d built a business empire with interests ranging from gambling to real estate, from golf courses to car dealerships.

It Happened in Vegas: How Billy Walters Saw a Hot Hand Go Cold

William Walters leaves the federal court house in Las Vegas, May 19.

Photographer: John Locher/AP Photos

Like Vegas itself, he was headed for a fall.

Today, with Walters at the center of an insider-trading saga involving the golf champion Phil Mickelson, the story of how those businesses came together -- and, at times, came apart -- sketch out a crucial back story: Walters, king of the high rollers, had seen his hot hand go cold.

Like many Nevadans, Walters was hit hard when the bottom fell out of Vegas in the mid-2000s. Documents filed in connection with several lawsuits over the past decade chronicle how the financial pressures were mounting at around the time he embarked on what authorities say was a scheme in which illegal stock tips helped him generate some $43 million in profits and avoided losses.

Mickelson was not accused of wrongdoing. Walters has categorically denied wrongdoing, except in a 1982 case in Kentucky in which he pleaded guilty to a bookmaking-related charge and paid a $2,000 fine.

“Mr. Walters and his counsel look forward to his day in court, where it will be shown that the prosecutors’ accusations are based on erroneous assumptions, speculative theories and false finger-pointing,” Walters’ attorney, Barry Berke, said in response to the insider trading charges.

The third figure in the case, Thomas Davis, the former chairman of Dean Foods, has agreed to plead guilty and cooperate in the case against Walters.

Wall Street has become captivated by the Walters case, with its mix of golf, gambling and suspicious stock trading. But at heart, the Walters story is a tale of Las Vegas, that sprung-from-the-desert metropolis of high hopes and broken dreams.

Walters first made his name and fortune by bringing a Wall Street-style approach to sports betting. But over the years, even as Walters assembled a business empire that stretched from Kentucky to California, he was laying big bets on Las Vegas real estate, court records show.

As golf’s popularity exploded in the 1990s, he also spent millions on courses like Stallion Mountain Golf Club. By the mid-2000s, commercial real estate, housing and golf looked like a trifecta of disaster in Las Vegas. At the low point, about 70 percent of Vegas homeowners were underwater on their mortgages.

Compounding Walters’ problems, his gambling margins were tightening as other gamblers adopted his computer-driven ways and reduced his advantage, said David Malinsky, who worked for Walters off and on for two decades.

Courses for Sale

As the troubles on Wall Street began to spread, Walters circled his wagons. He sold Stallion Mountain, one of his four Vegas golf courses. To help the deal go through, Walters personally guaranteed the loan for the buyer. When the buyer defaulted and the bank that issued the loan went under, the Federal Deposit Insurance Corporation pursued Walters to repay $15.25 million, court filings show. 

The course ended up closing for three years. That was in 2008, the year authorities say the insider trading began. By mid-2014, Walters would also sell Desert Pines Golf Club, whose greens are fashioned after Augusta National.

In a 2012 court appearance over Stallion Mountain, Dennis Kennedy, a lawyer for Walters, laid out the situation. “In 2006, and this is no secret to anybody, the economy starts to weaken, the boom is done and things are starting to go downhill,” Kennedy said. “The good times are starting to come to an end.”

Although Walters’ wealth has been estimated in the hundreds of millions of dollars, in the midst of the financial crisis he testified that he couldn’t put a figure on his net worth because a “substantial portion” was in real estate.

“I’m not trying to be coy here, but I don’t know if anybody can do that today who owns real estate,” he testified in October 2009. “If you own some, you’ve got to be able to sell it.”

The implication was clear: With prices still falling, and with the foreclosure crisis sweeping Las Vegas, few people were willing to gamble on real estate. Golf had become a loser, too. In the post-Lehman years, hundreds of courses closed nationwide.

In a separate lawsuit, in 2010, Walters stated in a complaint that another of his courses, Bali Hai Golf Club, had fallen short of expectations because of the economic troubles. The club was left with $49 million in “un-recouped costs,” he said.

‘Mythical Figure’

Walters has a long history of beating the odds. By now the outlines of his early life are well known: Born in Kentucky, the son of a professional gambler and a teenage mother, Walters began shooting nine-ball pool at age 4 and, by age 10, had progressed to gambling.

After being arrested for illegal sports gambling in his 20s, he struck out for Vegas -- “someplace where it [gambling] was legal and I could be a respected member of the community,” he told the author Richard Munchkin in “Gambling Wizards: Conversations With the World’s Greatest Gamblers.” “That place was Las Vegas; Las Vegas is the Wall Street of gambling.”

Munchkin says now: “Walters is the only person I know who started out a degenerate gambler and became a successful one. He’s a mythical figure in Las Vegas.”

By his own admission, as he told Munchkin, Walters’ early forays into high-stakes gambling mostly enriched the casinos, partly because he drank heavily. His big break came at the Computer Group, founded around 1980 by a young Westinghouse computer scientist named Michael Kent. Kent had developed a program to calculate his weekend softball team’s odds of winning and later applied it to handicapping college sports.

Gamblers Inc.

Kent teamed up with Ivan Mindlin, a local doctor with a gambling habit, and brought in Walters to lay bets. In a 2015 interview, Mindlin said that the operation brought in “hundreds of millions of dollars.” It also attracted federal wire taps and police raids in 1985.

“After five years of creaming the casinos, we had our doors busted down by the FBI,” Mindlin said in the 2015 interview. He did not respond to a call last week seeking comment.

The episode led to indictments against Walters, his wife and 17 others for conspiracy and interstate gambling-related offenses. They went to trial and were acquitted. Billy Walters was later indicted by Nevada officials three times for the same offenses, which included money laundering. Those charges were ultimately dismissed.

Attempts to reach Susan Walters weren’t successful. Messages left at a company she founded with her husband and with Richard Wright, a Las Vegas lawyer who represented the couple after they were charged, weren’t returned.

Over the years, Billy Walters became a gambling legend by employing a network of handicappers and analysts whom he took pains to keep anonymous -- including from one another -- so that he alone could call the shots, he told “60 Minutes” in a 2011 profile of him. He was everywhere and nowhere.

“This was Henry Ford with his manufacturing line,” Malinsky says. “Your job is to install the spark plugs, install them as well as you can. You get paid very well, and that’s pretty much that.”

New Charges

Beating the house is one thing. Beating federal authorities is another. In an era when insider trading has become notoriously difficult to prosecute, the latest charges against Walters are relatively simple.

According to authorities, for six years beginning in 2008, he traded giant blocks of the same company, Dean Foods. On some days, Davis’s buying and selling accounted for as much as 37 percent of the stock’s trading volume. Big, lucrative trades occurred right around the time that high-profile deals were shining a spotlight on the shares.

Walters allegedly received his tips directly from Dean Foods insider Davis, whom the government says received substantial financial benefits in return.

The timing of the trades was a red flag to the Financial Industry Regulatory Authority, according to a person familiar with the matter. Finra alerted prosecutors and the Securities and Exchange Commission, the person said, both of which filed charges against Walters and Davis, the Dean Foods chairman.

“Las Vegas betting is a very different game from playing the stock market,” said Brad Simon, a former federal prosecutor in private practice. He added: “Career insider traders traditionally know better than to make these kinds of purchases.”

To contact the reporters on this story: Neil Weinberg in New York at, Patricia Hurtado in Federal Court in Manhattan at, Eben Novy-Williams in New York at To contact the editors responsible for this story: Jeffrey D Grocott at, David Gillen, David S. Joachim