Dana Parham is a whale. He likes to bet big. Really big. But unlike most pop culture references to Las Vegas high-rollers, his game of choice – and chance – is horse racing.
By Perry Lefko
He owns a globally successful aquarium business, plans to open a string of pet stores, is a partner in a record company that touts a famous band from the 1970s on its label, is a housing developer, and breeds and races standardbreds. Not all of these businesses have been profitable. Some of them, in fact, are inherently destined to lose money. But Dana Parham is undeterred. He is a renaissance man with a plan and diverse enough interests to satisfy his creative spirit.
Most notably, though, this self-made multi-millionaire has bankrolled these businesses with a betting company that wagers some $300 million (US) a year on horse racing – both standardbred and thoroughbred; the company accounts for more than 20 employees, and has annual expenses totaling $10 million.
The 60-year-old native of Columbus, Ohio, likes to find value in wagering, but admits he doesn’t mind betting on risky businesses. His life isn’t defined by making huge financial scores. “Most people go into business and they make money and lose it gambling. I’m the opposite,” he laughs. “I make money gambling then I lose it [on business]!”
Parham recounts his earliest gambling as taking place in the first grade, playing marbles against the sixth-graders and losing more often than he won. His grandmother, who supplied him with the tools of the trade, had to constantly procure him a new bag of those glassy balls. “Ever since I remember, before even going to school, it was always about games and competing,” he says. “I think my parents probably just shook their heads.”
He began going to the races with his friends at Scioto Downs and Beulah Park and immediately loved the game, making his first bets at just 17, despite the state’s 21-year-old age minimum. “They had a $50 window, and I guess they figured I must be old enough to be there if I was at the $50 window,” grins Parham.
In 1969, he graduated from high school and embarked in pursuit of his passion... to become a full-time gambler, specifically betting on horse racing. In 1970 he got married, but the relationship ended eight years and two children later.
Parham moved to Florida to escape the weather of the more northern states, and for a time relocated to the bright lights of Las Vegas, where he gambled on poker, blackjack, and sports. He estimates that from 1978 through 1996, he had just one losing season, though he never made more than $120,000 in a single year.
“Was I doing quite well in terms of money? Not even close,” he admits. “But there were far less responsibilities then and a more relaxed lifestyle. I never want to go backward in my life, but looking back, it was not the worst of times.”
In 1995, he returned to betting on horses, and a year later he ventured into computer-automated wagering, allowing him to make multiple bets at once on simulcast races throughout North America. He created International Software Services, using a system developed by some associates he met betting overseas. The system was designed to take advantage of value odds as opposed to straight wins. It was a mere two years before the business became profitable, and at its height, the company was wagering north of $400 million (US) a year. Today, it has levelled out at roughly $300 million annually, though it has fallen below that mark a few times recently due to the overall decline in race wagering. The business has a full-time office staff, which includes a manager and supervisors for various shifts, and 15 people who make the actual bets.
“There are many handicappers out there that can out-handicap the system. What the computer does is get the right amount of bets. It measures your edge and then bets accordingly. What gamblers or punters or people that bet horse racing tend to do is bet with more emotion or what’s in their pocket. They don’t necessarily measure edge. A $50 bettor is a $50 bettor, whether it’s Tuesday or Saturday night. Yet Saturday nights the pools might support him to bet $250. Are his prices any different? No. He’s a $50 bettor. That’s what his mentality is.
“Bettors are people who make quick decisions, like ‘the inside posts are doing exceptionally well tonight, let me give that extra credence.’ The computer formulas don’t vary with emotion from race to race. That’s the good part of computer racing. The computer isn’t all that smart and it doesn’t get that off course, either. The formulas come from real data and from the emphasis we put on the data. It’s like how a human looks at data and puts emphasis on that data. The difference is that for the human, it’s all about drivers or jockeys one day, and the next day it’s all about post-positions or trainers, and the next day it’s about time trials or qualifying, and he jumps from flower to flower. It’s kind of like how people chase a stock market. They’re chasing yesterday’s high flyer.
“We know what a trainer is worth or what a post position is worth, and it takes many, many races to change that. If a driver goes zero for ten one night, we don’t think he’s through quite yet. We will still take the same data on him tomorrow as we did the day before, whereas the bettor may go ‘oh, he’s in a slump’ or ‘he can’t drive’ or ‘look how bad he is.’ That’s where I think the average gambler gets in trouble. Everything is kind of the same except bettors overemphasize good results because we have short-term memories. The computer doesn’t.”
Despite the clear advantages, Parham admits that while he never expected the company would grow so impressively, he’s comfortable with its success.
“I don’t think Bill Gates ever envisioned what Microsoft was going to be,” he points out. “Things just happened. You work hard, you have some good fortune. You catch things at the right time and voila. Things can be bigger than you ever imagined. It goes back to luck and good fortune; it’s a good part of what makes anything happen.”
In 2000, he ventured into owning standardbreds, in the hopes of giving something back to the sport that had been good to him as a bettor. Wanting someone on board who would work exclusively for him, he hired trainer Robin Schadt, a relatively unknown trainer based out of Illinois, and called his stable Odds On Racing.
Parham knew going in that his chances of financial success were slim, and true to his expectations, his ownership record has been less than an over the top success. With the horses racing under Schadt in Illinois (and with other trainers outside the state), Parham had his best year in 2005 when his horses banked more than $1.5 million (US). In both 2008 and 2009, Schadt admits, they brought in less than $350,000 (US) but in 2010, his fleet saw some resurgance when they bankrolled $893,660 (US). The businessman blames himself for the mediocre showing, claiming to have spent far too much money on young stock.
Of his future expectations for his stable of horses (some 50 in all, including breeding stock) and his training centre, Parham speaks like a humbled gambler. “My expectations have been beat up pretty bad,” he says honestly. “I don’t know that I have any expectations overall any more. It’s a heartbreaking business. So many times you think you have a good one and it doesn’t happen. I think whoever it is that is on top, they can be beat – and they are. Look who is on top one year, three years, five years, ten years... the names change. That doesn’t mean my name automatically gets to go to the top. Many of the people once on top in the harness racing game are no longer there. I don’t believe anybody on top in racing cannot be tackled. Some guy has a good horse – why don’t they have a good horse every year? It’s good fortune that they had the one they had and I’m not saying they didn’t do a good job. They certainly did, it just starts with good fortune… but do I wish up to now we could have had a couple horses do a little better than they did.”
Parham has also used his wagering profits to invest in other businesses, including one called Living Color, which is based in Fort Lauderdale and designs custom-made aquariums and cabinetry for individuals and companies. Some of these pieces are the kind you would see in homes, restaurants, and businesses; they often resemble art pieces with their themed corals, reefs, and lighting. In addition, he owns AllFish Emporium, the largest aquarium retail store in North America, and is working on plans for a new business called AllPets Emporium. He recently began building homes, the first one of which he completed this past January and is listed for $6.9 million (US).
A few years ago, Parham became a partner in a record company that he has called Odds On Recording. The label has three artists, including the Australian soft rock duo Air Supply that had a series of hits in the 1970s, most notably the track All Out Of Love. “I’ve had good fortune and so I’m able to make these decisions,” Parham says. “Look at some guy that makes $100,000 a year – he doesn’t get to do any of this. The aquarium business isn’t necessarily a good business, it’s a fun business.”
Gambling, no fun, you say? Apparently not as much as you might imagine.
“Most people, when they go to work, they get something outside of just the paycheque. The fireman gets to get the cat out of the tree or save a kid from a burning building. The school teacher gets to maybe a spark a mind that will go on to do something great. At the end of the day, you get to go home and feel good about what you do. The professional gambler, what does he get to feel good about? What big social thing did he solve today? All he did was figure out a way to extract money from someone else. At first it’s fun. Money won is twice as sweet as money earned, but not forever. At some point you’d like to have some kind of self worth other than ‘I have the ability to extract money from the next guy.’ You’re just taking money from somebody else. So you don’t have that good feeling that the nurse or the teacher or the doctor might have.
“Every single gambler I know that has had success has tried to move into other areas just to show they have some kind of worth on the planet.. The two saddest people in the world are the person that wishes for something and never gets it, and the person that wishes for something and does get it. Be careful what you wish for. I’m not beating the track. There’s some guy out there that was at the wrong end of the bet and his money got transferred over to me. After a number of years, you can’t just feel good about that. You need more. You need other gratification besides just money.
“Let’s say you mop floors for a living and you take pride in that you do a good job, so I offer you two jobs One pays $15 an hour, but we track up your floor all the time so it always looks like garbage. The other pays only $12 an hour, but nobody tracks up your floor and it gets to look nice all the time. I think a lot of us would take the lesser pay.
“Does that make sense? It’s not always about money. Be a drug dealer if money is the only thing that matters. There has to be more to it. You have to enjoy what you do and feel good about it.
“I feel good about the aquarium business. We give joy to the people. We build a beautiful product. There are a lot of crappy businesses out there. Look at mortgage businesses where they are sticking people with bad mortgages. I don’t know how these people sleep at night! I don’t have that problem with the aquarium business.
“I just enjoy watching things grow,” he adds. “I believe everybody needs to be and should be productive. Everything I get involved with is fun. I enjoy building more than just playing games.”
But he’ll readily admit... the ponies have been a good game to play.