Hamann had taken up spread betting as a distraction from problems in his personal life, but suffered the massive loss on a cricket match between Australia and South Africa.
Writing in his autobiography 'The Didi Man', which is being serialised in the Daily Mirror, Hamann said: "I was spread betting because it requires more thought, and the more my brain was engaged the less I thought about the devastation I was feeling inside.
"That night I bought Australia for £2,800 at 340 runs. That meant for every run over 340 you win £2,800, but for every run under you lose the same amount.
"Australia collapsed for 237. It is a score I remember well. It cost me £288,400.
"Every wicket felt like a stab in the heart. By the end of the night I felt like I'd been scalped.
"The next day, when I looked at the mess that was me in the mirror, I said 'Didi, things have got to change."'