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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.'"
Not a game - or entertainment or luck. Just calculation of reall odds and risk.
There are 3 such games: Craps, Blackjack and Baccarat. Poker is promoted so heavily, because it makes the Casinos so much lucre.
"Flyin' in just a sweet place,
Never been known to fail..."
The rebate did not factor in at all once he was ahead. The soft 17, playing perfect cards, and being allowed to vary his bets as he saw fit did it. Kid Dynamite covered this much better.
http://kiddynamitesworld.com/why-cant-journalists-who-write-articles-about-gambling-understand-math/
I worked as an intern for two summers at the Casino Dealers School in Atlantic City in the late 1980s. Roulette wasn't a legal game in the casinos there at the time, but he had a table in the back for kicks (nobody was trained on it). He said anyone who's dealt roulette for 10 years could make the ball land wherever he wants 8/10 times or more. He then showed me first-hand, telling me in advance the color and number on which the ball would land. 8/10 times.
from your link
"Johnson, 49, of Bensalem, Pa., is the chief executive officer of
Heritage Development LLC, a Wyoming-based company that uses
computer-assisted wagering programs for horseracing."
Google: "Don Johnson" heritage wyoming. Click on his LinkedIn link (a year ago about 15 down from the first). Read.
Sure enough, Don Johnson is "CEO of Heritage Development, LLC". Sure enough, Heritage Development is in the "Cheyenne, Wyoming Area". And what business is Heritage Development in? Programing? Software? Investment? Gaming? No, no, no & no. Rather...it's in "Public Relations and Communications".
Methinks the Johnson/casino story has a wee bit of the rotten egg stink about it.
I worked for a casino. I worked in IT, but the company trained all employees to root for the customer. Celebrate their winnings. The house isn't worried because they know they'll win in the long run.
http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
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.
Um.... The odds do change after a run in blackjack. You might want to research card counting as well as the Kelly coefficient. Unless they use continuous shuffle machines, the odds for the next hand change with each card dealt because you know the proportion of low to high cards that remain in the deck. When there are a lot of high cards left in the deck, that favors the player quite a bit.
The Kelly coefficient has to do with the amount of cash you need to have in order to have a 50% change of doubling your money before you half it based on a certain amount of cash that you place on each bet. It also has the property that it gives you a 10% chance of winning 10% more than your starting money before losing 10% etc. However, it seems unlikely that he had sufficient starting money to make use of this since he was betting like $100,000 per hand. On the other hand, in his games, he was able to negotiate it to where they only had a 0.25% advantage on each hand. But, they were giving him 10-20% of his losses back, which mitigated some of his risk. Plus, they said that he wasn't card counting, but they didn't mention whether or not he was shuffle tracking. Since they were hand shuffling the decks, I would assume that he was. If you can determine when a 10 will be dealt, you have an 80% advantage over the house on that hand.
I think the correct strategy, in his case, would have been to bet big at one casino and then if he won, go to a different casino that was also giving him the 10-20% loss discount. Because while the first casino wouldn't count his newfound winnings as part of the loss stuff, the new casino would. So, if he won $100,000 at casino 1, and he gambles that at casino 2, the most he could lose is $80-90,000 of it. His expected value if they gave him an 80,000 loss guarantee would be $9,550. That is per hand.