Billy Baxter: Career Gambler

“It’s a hard way to make an easy living” is a maxim that resonates with poker players and gamblers around the world.

It surely does with Billy Baxter, who has been gambling for a living since he was 14 years old; for more than 50 years, he has earned his living as a gambler. Whether it was shooting pool in his younger days, playing poker, or betting sports, he has supported his wife and three children by using his wit and skill to win millions of dollars.

His gambling resume runs the gamut. He has won seven World Series of Poker gold bracelets (five of them coming in no-limit deuce-to-seven lowball), has managed boxers, and is a well-respected sports bettor. In 1986, he stood up to the U.S. government and won a landmark court case that protects the winnings of poker players as earned income. And in 2006, he was inducted into the Poker Hall of Fame.

Baxter will be the first to tell you in his reserved Southern drawl that to win consistently, you have to be talented and know what you’re doing. You also have to know what pitfalls to avoid. He has watched many young gamblers fall victim to their vices, including his friend Stu Ungar, whom Baxter staked in the 1997 WSOP main event. Ungar won his third and final world championship that year.

Baxter has seen it all during five decades of gambling, and his experiences thread a path through the modern history of poker in the United States. In between hands of a $100 ante, $200-$400 blinds no-limit deuce-to-seven lowball game at Commerce Casino, Baxter spoke about what it takes to win over the long haul.

His life story holds a number of lessons and a wealth of advice for gamblers both young and old.

Success Comes Early
By the time he was 14 years old, Baxter had discovered that he could make more money hustling pool than he could working. “I can honestly say that from the very beginning, my goal in gambling was to make money,” he said. His parents tried to stop him at first, but young Billy was hooked.

“You couldn’t hang around my house and not work; you had to be doing something,” said Baxter. “I got a work ethic from my parents, and even today, at 69 years old, I’m still an early riser at 6:30 in the morning.” His actions support this statement, as he was wide awake for breakfast and scouting out the poker room before his first cup of coffee.

He kept winning at pool until he was 18 years old, and then found a bar that hosted a poker game for local businessmen. “I have to admit that for a bunch of businessmen, they were all very good players. I got into the game and they busted me, so I had to go back to pool and make some more money, and then I came back and they busted me again,” Baxter recalled. These lessons improved his poker game, and he began to win consistently, eventually moving to higher stakes at underground casinos, where he won so much money from the owner of Augusta’s Paisley Club that he was offered half of the casino to settle a gambling debt of $40,000. “We had a small casino and also had betting on ballgames; then, I got into trouble with that, so I decided that I should move to Vegas, where it was legal,” he said.

The “trouble” led Baxter to shut down the Paisley Club. He continued booking sports action, and he also ran a small casino operation during the Masters golf tournament until a police raid shut that down and he was sent to jail. “I did a year for that one,” he laughed. “I never felt bad about that. I didn’t want to go, but I always gambled only with rich people, those who had a lot more money than me. I had no moral conscience that I was doing something wrong.” After his release, he decided that it was time to head to Vegas.

Gambling Life in Vegas
Baxter and his wife, Julie, checked into the Dunes Hotel and Casino in 1975 after their honeymoon in Hawaii. They didn’t check out until nine months later, after buying a home in Vegas.

The Dunes was the center of the poker world in those days, and a lot of that had to do with the casino’s president, Major Riddle, and the chief operating officer, Sid Wyman. “They loved to play poker, and because they owned a casino, they fancied themselves to be gamblers. Trust me when I tell you they played OK, but not very well,” said Baxter of the two Vegas legends.

Baxter mixed it up with all of the tough players — including Doyle Brunson, Fred “Sarge” Ferris, Chip Reese, and Bobby Baldwin — and the fish of the time. Besides Riddle and Wyman, drug dealer Jimmy Chagra was another big fish who kept the game running. “That was probably the greatest time there ever was in the history of poker, because the money was so big,” Baxter recalled. “We were playing $500 ante, $1,000-$2,000 blinds no-limit deuce-to-seven lowball in the ’70s. When you factor in inflation, that is much bigger than the $4,000-$8,000 game that runs today.”

Baxter quickly realized that he could make the most money playing deuce-to-seven, and he began to play it almost exclusively. He never let an opportunity pass him by, playing for days straight when the games were good. He stayed awake by wrapping a cold towel around his neck. He also attempted to boycott no-limit hold’em, the other game that was popular with the high rollers. “That’s one reason I boycotted hold’em for years at the World Series; I wouldn’t play because I didn’t want to encourage anybody to play no-limit hold’em. Doyle always wanted to hustle hold’em, so I was trying to keep the game deuce-to-seven,” he said.

Between 1975 and 1987, he won five WSOP gold bracelets; four of them came in deuce-to-seven lowball events and one came in an ace-to-five draw event. He also was busy away from the poker table. He managed two world champion boxers, Roger Mayweather and Bruce Curry. His sports-betting success became well-known. He made waves when he won a six-figure sum for a wager on Miami (an 11.5-point underdog) against Nebraska in the 1983 Orange Bowl (Miami won 31-30). His exploits caught the attention of mainstream sportswriters, and Sports Illustrated featured Baxter’s winning ways in a 1984 story, “Look Up and He’s Got Your Money.”

William E. Baxter Jr. v. the United States of America
Las Vegas was the perfect setting for a gambler like Baxter, who was no longer pursued by law enforcement for plying his trade. In Vegas, he could do everything aboveboard, and he even declared his tournament-poker winnings on his tax returns. “One thing I chose to do early in life was pay taxes. That is one thing I would recommend to all gamblers,” Billy remarked. “Money doesn’t do you a whole lot of good sitting in a box. It’s nice to have, but in the end, you want to be able to buy a nice home, or invest in stocks. In this country, you’ve got to legitimize yourself.”

The court case of William E. Baxter Jr. v. the United States of America called into question the applicable tax rate on the $1.2 million in gambling winnings that Baxter claimed on his tax return as a professional gambler from 1978 to 1981. Baxter refused to pay the 70 percent tax rate that the government required, because it classified his winnings as unearned income. His defense team argued that because Baxter was engaged in a trade or business as a professional gambler, and his winnings were earned by the application of his knowledge and skill, he should pay the normal tax rate of 50 percent on his amount of earned income. In 1986, Baxter won the case in Nevada, and the government’s appeal was defeated in the 9th U.S. Circuit Court of Appeals. The IRS threatened to take the case to the Supreme Court, but Baxter and his lawyers thought it was a bluff to induce a settlement. Baxter called that bluff, and the IRS dropped the appeal. Baxter’s favorite part of the trial came when the judge ruled on the proceedings in Reno. “The judge told the lawyer who handled the case for the government, ‘I’ve heard your arguments and I’ve listened to them, and I have to tell you that I find your argument completely ludicrous. I just wish that you had some money so that you could sit down and play with Mr. Baxter to see just how long you would last, and then we’d see just how much luck there is involved in this.’”

With this court victory, Baxter protected his rights as a poker player. His legacy will live on through the current and future rights of all poker players to declare their profession as a legitimate one. The ruling has been cited numerous times as a rallying cry for opposition to UIGEA [Unlawful Internet Gambling Enforcement Act] legislation.

Moving Back to Georgia (Temporarily), Finding Poker Again, and Staking Stuey
After the trial, Baxter decided to move back home to Georgia. He believed that he had accomplished everything that he had set out to do in Las Vegas. He had grown tired of the smoking that soiled the cardrooms around town, and he wanted his children to get out of Vegas. He bought a house and relocated his family. He got bored, so he started betting sports. “I wound up getting caught right in the middle of another big FBI investigation,” he said. “They were after some local bookies back there, and I got indicted again. My wife said, ‘You know, it’s just not meant for us to live back here.’ So, we moved back to Vegas in 1990.”

When Baxter returned, he primarily bet sports for a number of years, and as cardrooms began banning smoking, he got back to poker. In 1993, he won a sixth WSOP gold bracelet (his fifth in deuce-to-seven), and a seventh bracelet, in razz, came in 2002.

He finally began to play no-limit hold’em, and he scored his first WSOP main-event cash in 1997. He was awarded $21,200 for his 22nd-place finish, and at the end of the event, he earned another $500,000 thanks to Stu Ungar. Baxter agreed to stake Ungar in the event after being approached by him several times; he had been reluctant to stake him due to past experience.

A few years earlier, Baxter had backed Ungar in the main event, and after building a huge chip lead on day 1, Ungar was not in his seat when day 2 began. Hotel security eventually found Ungar in his room at the Golden Nugget, and he was carried out on a stretcher and rushed to the hospital. Baxter said, “I asked Eric Drache if I could come down there and play his stack. He replied, ‘You know you can’t do that.’ So, I got in my car and drove to the hospital.
Stuey was so little that he was put in what looked like a bassinet. I walked up to the bassinet, and this guy in a white robe came up to me and asked who I was. I said, ‘Well, I’m a friend of his, and he is in a poker tournament, so he’s got to get out of here.’ He replied, ‘I’ve got bad news for you; we just gave him a shot, and he isn’t going to be up for a day or two.’”

Despite that experience, Baxter decided to back Ungar in 1997, and it proved to be the correct decision. “He actually told me, when it got down to 20 players, ‘This tournament is over, buddy; I will win it going away.’ Sure enough, he went on and won it,” said Baxter. A year later, Baxter agreed to back Ungar again, but “The Kid” said that he was too tired to play. “That’s when I knew that something bad was going to happen to him; when a guy can’t come down to play a stake, something is really wrong.” Three months later, Ungar was dead.

Gambling With the Seasons
Baxter’s pursuit of money these days changes with the seasons. The morning breakfast he’s having at Commerce Casino in late August comes before one of the last poker sessions he will play for a while. “I have another week until football starts, and then poker won’t see me for about six months,” he stated.

He is very successful in betting individual sports — including golf, tennis, and boxing. “I attribute that to my recognition of talent. It’s just something that comes naturally. In poker, you’ve got to take in all of the information, as well. I think a lot of that is gut feeling, and that comes with experience,” said Baxter.

He applies these same principles to betting on team sports, especially in the context of halftime wagers. He reads the body language of players on the field to set his own lines for the second half, and then bets accordingly. “There were no halftime lines when I came to Las Vegas; I kind of got that started. I found it fascinating that you could watch half of the game and then make your bet. The casino doesn’t have that long to prepare; they have to make their line on the spot. So, the player has a really good chance to win if he has a good opinion. I think that is where the skill comes in,” he said.

So, now that Baxter has won enough to support his family for the rest of his life, what drives him to keep playing? As always, he has the answer: “I enjoy playing, and it keeps me young. I have seen in my lifetime that once people start retiring, the next thing you know, they’re getting the box ready for them. I’m convinced that staying active and keeping your mind working and competing may be the best thing in the world for keeping a guy going when he’s older. It keeps the juices running, so to speak.”

The work ethic he learned during his youth is still with him today. It will serve him well during the football season, the next time he’s seated at a poker table, and whenever he’s involved in just about anything else.

Advice From a Career Gambler
It is no easy task to win money over the long course of a career as a poker player and gambler. Here are the lessons that Billy Baxter has learned along the way, in his own words:

On avoiding pitfalls: One thing I believe you need to do in order to be a successful gambler is not to have any leaks. A lot of people make money, but they have leaks. They are young and like to party, and get into drugs, or whatever their chosen vice may be.

On money management: You have to use proper money management. One thing I’ve seen people do in gambling is eat like a bird and s—- like an elephant. When they win, they win a little bit and then quit and run. When they finally have their losing session, they can’t play long enough, and they shoot off everything. Cards are like anything else; you can’t play by the day, you have to play by the lifetime. You have to play as long as the game is good. I never played based on whether I was winning or losing. You’re never going to be very successful doing that, in my opinion, and I see people doing it all the time. They play when they’re losing and quit when they’re winning; that’s a recipe for going broke.

On the poker boom: I guess the biggest change is the fact that TV got interested. Poker used to be thought of as a sleazy sort of game that was played in the back rooms. It had a bad reputation because it was against the law. But now, there are people who have been very successful in other businesses and have made a lot of money. They become bored with their lives, so they get into poker. There are very high-quality people coming into poker, and it has really changed things. Poker is on the upswing, and it’s only going to get bigger. Anytime you have people with money and they like to do something, it gives it more credibility.

On deuce-to-seven lowball: It’s the purest form of poker there is. Most people talk about bluffing in no-limit hold’em, and they do some of it, but in no game is there bluffing to the extent that there is in deuce-to-seven. Every hand you play, there is an ante and blinds, and you have to raise to start the pot; you can’t limp in. If one person is pat and you’ve got a 10, and another person draws a card, there are two options: bet or give up. If somebody bets you and you’ve got a 10, he either has you beat or is bluffing, and you have to make that decision in each and every hand. If somebody bets you and you throw your hand away every time, he’s obviously going to keep betting. It’s a game in which you’re required to make calls with weaker hands, because if you don’t, you can’t survive.

On sports betting: I was never a one-game bettor. I was a plodder, so to speak; that was what my success was built around, in addition to the fact that I managed my money. Depending on how you’re doing, you bet in the range of $70,000-$80,000 a game, or if you’re doing badly, you go down to $50,000 or $30,000. You manage things. It’s a long race, because there are so many games. If you find one game that you’re really confident about, you bet a little extra, but it’s just another ballgame. It’s not like, “This is it, this can’t lose.” I have never felt like you couldn’t lose. I have seen too many locks go into the s—-house.