Blackjack Player Breaks the Bank At Atlantic City

Hugh Pickens writes with a link to Atlantic writer Mark Bowden's account of how one gambler has cleaned up against casinos: "[B]lackjack player Don Johnson won nearly $6 million playing blackjack in one night, single-handedly decimating the monthly revenue of Atlantic City's Tropicana casino after previously taking the Borgata for $5 million and Caesars for $4 million. How did Johnson do it? For one thing, Johnson is an extraordinarily skilled blackjack player. 'He plays perfect cards,' says Tony Rodio. But that's not enough to beat the house edge. As good as Johnson is at playing cards, his advantage is that he's even better at playing the casinos. When revenues slump as they have for the last five years at Atlantic City, casinos must rely more heavily on their most prized customers, the high rollers who wager huge amounts and are willing to lessen its edge for them primarily by offering discounts, or 'loss rebates.' When a casino offers a discount of, say, 10 percent, that means if the player loses $100,000 at the blackjack table, he has to pay only $90,000." Pickens continues: "Two years ago the casinos started getting desperate and offered Johnson a 20 per cent discount. They also offered playing with a hand-shuffled six-deck shoe; the right to split and double down on up to four hands at once; and a 'soft 17,' whittling the house edge down to one-fourth of 1 percent. In effect, Johnson was playing a 50-50 game against the house, and with the discount, he was risking only 80 cents of every dollar he played. Johnson had to pony up $1 million of his own money to start, but, as he would say later: 'You'd never lose the million. If you got to [$500,000 in losses], you would stop and take your 20 percent discount. You'd owe them only $400,000.'"

Comments

Re:I Can't Help But Feel

[Anonymous Coward]

I can't help but feel like this article is just designed to put the idea into millions of readers' heads that you can go into a casino with a strategy or method or system and take home millions at the blackjack table.

It might help if you read the article, then you'd lose that feeling. It made it abundantly clear that he made deals that reduced his losses and gave him better odds. The word "discount" must be in the story a hundred times. Just skim the article and you'll see your feeling is dead wrong.

Anyway, I've known a number of "strategy" morons and there's nothing you can do to convince them that luck doesn't exist and that odds don't change after a run.

Can't bust the bank in OZ

[OzPeter]

For some Blackjack games, Crown casino has gotten the gambling regulators to allow the dealer to go bust, but not pay out to the players: Crown can bust and still not lose

Re:I Can't Help But Feel

[Kelbear]

Well to put this in perspective, while Tropicana AC's (a.k.a "East") Net revenues was $279m, their operating income was only $2.3m after operating expenses are deducted.

So no, Tropicana AC's management definitely does feel a $6m hit. It's not a lot of money compared to consolidated net revenues of $623m. However, on a consolidated level, Tropicana entertainment had a net loss of $2.8m.

Bear in mind that Tropicana AC had also gone through a bankruptcy reorganization in March 2010.

A $6m hit still stings them considerably when margins run tight. Atlantic City in general has not been doing well over the past few years due to the recession. While house odds are in their favor, they're not wildly in their favor, so to make money they need lots of people playing a lot of lot of rounds. When attendance drops, their operating costs can't be cut as quickly, they do have unionized employees.

All of this information can be found on their latest 10-K: http://sec.gov/Archives/edgar/data/1476246/000144530512000602/a20111231-10k.htm#s18F7C3BC4B5443E4BDFBC1717B852C6C

Re:That's how it's done...

[Enderandrew]

I worked for Harrahs. We had poker at both Council Bluffs properties. Certainly it makes less money directly than other table games, and less money than slots. But Harrahs owning the World Series of Poker creates a lot of visibility for the company and gets people in the door.

Often men don't enjoy slots as much as women. For some, having poker allows a couple to come and have both partners play something they enjoy.

Slots will make more money in the same space, but I don't know that you're more profitable overall dropping poker in the long run.