I've known about a dozen people over a decade who make a living gambling. Apparently it's not as hard as it sounds. Most people just don't try. It takes effort and discipline like anything else. And a healthy appetite for risk.
Surprisingly, most physicists I've talked to also seem to have a healthy appetite for risk. Maybe this is a generational thing. The current generation has one eye on wall st and the other on startups.
By my understanding, successful professional gamblers aren't actually gamblers, as they engineer the situation so the odds are in their favour and they are just printing money. Here is my understanding of how a professional “gambler” (arbitrageur?) in Australia made a fortune.
Take a powerball/lotto game, where balls are drawn and punters win a prizes from a fixed size pool. Say the long term rate of return is 90%. The arbitrageur starts placing large volumes of bets, so they make sizeable portion of the pool of bets (say 30%) and have a significant chance of winning the jackpot. They also negotiate a rebate (say 15%) with whoever runs the game, so their long term rate of return is now greater than 100%. The gaming company wins, as they are bringing in an additional 30% revenue each week from the arbitrageur and only paying out a 15% rebate, and the size of the prize pool is fixed. The arbitrageur wins, as their long term payout is more than 100% due to their rebate. The mug punter (without a rebate) loses, as they are winning a smaller portion of the prize pool due to payouts to the arbitrageur. Meanwhile the lottery company is sucking in more mugs by advertising how many jackpots are going off (winners can be anonymous in Australia). In summary, the arbitrageur's rebate is legally transferring money away from those without power (the mug punters) back to those with power (the company running the game and the arbitrageur). Lose-win-win respectively.
The Australian gambler you're thinking of is most likely David Walsh, who made many millions by deploying similar systems in horse races across South East Asia; he is also noted as a collector of eccentric art.
You go to the company that runs the lottery and ask "hi, if I buy 100k tickets, what sort of discount can I get?".
As long as there aren't laws that prevent selling tickets below the nominal price, it's no different than going to a company and asking for a discount when buying bulk quantity of their product.
A discount, in my mind isn’t quite the same as a rebate, even if the net result is the same.
A rebate usually requires the full retail price to be paid up front, with the cost savings deferred to a seperate transaction, often paid by the vendor, when there’s a retail supply chain intervening between purchaser and the supplier.
Sillysaurus is presently downvoted, so as someone who occasionally pays professional gamblers money:
Clearly it is the case that there are some sole proprietor firms which provide entertainment services. While this is generally not the world's most lucrative market, we have no reason to suspect that it is intrinsically a worse business than the least sustainable sustainable enterprise.
There exists a class of specialized entertainment service provider. They are called "professional poker players" and their job is to fill seats at a poker table so that recreational players like myself can get into a poker game [+]. They are compensated irregularly for providing this service; incompetent professionals are swiftly driven from the market. An incidental portion of their compensation comes directly from casinos; a majority of it comes from people like me.
[+] Unlike some forms of gambling in Las Vegas, poker games are not immediately expandable at all margins. A casino with one dealer and three players for a full-ring game is sad. A casino with one dealer and six players is less sad; the game starts and the casino starts making a (relatively nominal) amount of money.
(The economics of poker are not attractive to a casino by comparison to the other games in the casino; it is mostly treated as a loss-leader to bring people seeking entertainment into an environment designed to extract all money in their wallet and then some.)
Basically, 1) People who enjoy gambling only enjoy it when they're betting amounts of money that actually matter to them.
There are billionaires who love playing really high stakes poker against the best players in the world. Doesn't surprise me, I'd love to run a race against Usain Bolt even though I can guess the outcome.
My brother lives in Japan and had a friend in college who made a fulltime living playing Pachinko. He would analyze a machine for awhile, and then code see a pattern in how the balls fell. Some people can see things most people cannot, and they can take advantage of it.
My wife met such a pachinko professional. He worked three 12 hour shifts per week. He would not leave a marginally profitable machine during a shift. The light, smoke and noise were terrible for his health and his income was about normal for a salary man.
Surprisingly, most physicists I've talked to also seem to have a healthy appetite for risk. Maybe this is a generational thing. The current generation has one eye on wall st and the other on startups.