Waterhouse had $50,000 on Sertorius at $101, which would produce a $5 million dividend if the Geelong-trained galloper somehow won the Melbourne Cup, but there was a method to the bet.
Waterhouse placed the wager to hedge against any advantage punters might enjoy, courtesy of William Hill's 'in-play' market, which allows punters to bet up to 90 seconds after the start of the event at pre-race fixed odds.
Punters will still be able to bet with William Hill until the field is approximately halfway down the back straight, giving them a chance to have a look at how their fancy is position and how well it has settled, which are crucial factors in a Melbourne Cup.
"We're the only bookmaker in Australia where punters can still back their horse at pre-race fixed odds as they go past the post on the first lap,” Waterhouse said.
"Sertorius will be right up there come the 90 second mark and In-Play for the whole race with Craig Newitt on board.
"William Hill expects unprecedented levels of In-Play bets during the race and strong support for the rank outsider. We think he's a strong chance.
"He starts from one of the most successful barriers in Cup history with a terrific overall record. It could very well be one of the most memorable Melbourne Cup results in recent history.”
Waterhouse backed Excess Knowledge, trained by his mother Gai, to win $200,000 at the Call of the Card while punters backed Fame Game from $5 into $4.80 with a string of four and five-figure bets.
Caulfield Cup runner-up Trip To Paris was backed to win $250,000 in a single wager as was the Lee and Anthony Freedman-trained Our Ivanhowe, who was third in the Caulfield Cup.