Blackjack Player Breaks the Bank At Atlantic City 294
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.'"
That's how it's done... (Score:5, Interesting)
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.
Rebate didn't matter (Score:5, Interesting)
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/ [kiddynamitesworld.com]
Roulette (Score:5, Interesting)
Desperate Odds (Score:4, Interesting)
Of course the story is that there are too many casino chasing too few players, and given the online competition, the time of the casino may be over.
The casino's will be just fine (Score:5, Interesting)
The casino's will still come out ahead though in the end. This guy will inspire a thousand some imitators and those imitators will repay the casino in spades. They lose money on one guy just to make it up by the throng inspired from the first. It's the same reason casino's put a big winners in their advertisements and a jackpot has lots of flashing lights and noise. /Credit to the guy for doing this without cheating, not an easy thing to do.
indeed - Rebate didn't matter (Score:5, Interesting)
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.
Re:The question is will he live to collect it (Score:5, Interesting)
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.
Re:That's how it's done... (Score:5, Interesting)
I have figures from about a year ago showing a promo year over year. The poker tables were full the first year, gone the second year. Sure, there were some men who were displeased. But, response on the promotion went up (as a result of the men having something to do other than head directly to their table until their wives were broke), and profit on the night is up significantly. It could be a shift in play, but analysis says otherwise - the tables never went back in.
Re:Decimate (Score:4, Interesting)
I understand the origin and the historical meaning. But I dispute your assertion that it is 'obvious'. Why couldn't it refer to reducing something to one-tenth, rather than by one-tenth? Decimate a meter, end up with a decimeter. Sounds perfectly reasonable to me.
50% expected return still not enough to "live on" (Score:5, Interesting)
you have to play roughly 100,000 hands of blackjack to
establish a reasonable bell curve. You need about a 60%
expected return (and there do exist such methods using
teams and card counting)
Eventually, a losing streak will break your bank.
Las Vegas wins because it is able to play 100,000 hands of blackjack
in a relatively short amount of time while risking only a fraction of their bankroll.
Re:I Can't Help But Feel (Score:5, Interesting)
I want to contradict you, but after reading the entire article, there's no claim that he had actually proved a way to beat the house, even with his custom rule changes.
The article seems to indicate that he always like gambling (ie. playing even when you can lose), but only increased his rate of gambling once he started getting these special custom deals. Since he hadn't played big before, he wasn't known at the time, and that gave him the opportunity to get in and out fast. The evidence that he took enough from 3 chains to be banned is anecdotal evidence only.
I saw a 60-minutes special on a sports gambler who hired 4-5 people to do full-time research for him. He turned it into a sustainable business, and kept extremely close records of every wager placed. I don't see any evidence that Don Johnson has done the same thing. He could have won big a few places and been thrown out, and lost just as much at other casinos, and the article would still have been written.
Re:That's how it's done... (Score:5, Interesting)
I go to AC with my roommate maybe 3-4 times a year, along with 1-2 vegas trips. We can easily take in +1000 a weekend playing poker. We then turn around and burn 800 or so playing everything else and having a big meal. Leaving up 200 is usually depends on how reckless we are on the craps table.
"Hollywood accounting", Vegas style. (Score:4, Interesting)
I guarantee you whatever "loss" is on paper, is exactly that, only on paper. I worked in the backroom, everyone in there is either ex-IRS, or current IRS who happen to be on the payroll.
Re:Not much skill (Score:5, Interesting)
Actually the real news wasn't mentioned in this awful slashdot summary. The discount didn't help him win - it would only have reduced his losses if he lost.
The real reason he was able to win, was because the casinos were willing to drastically negotiate the rules of the game (in addition to the discount) to the point where the house had only the tiniest advantage.
The guy was of course under heavy scrutity at the casinos (gambling $100K per hand), and they didn't detect him card counting, but I suspect he probably was counting but only acted occasionally when the payoff was huge (such as the single hand where he split twice and won $800K, mentioned in the article).
One of the many rule changes he negotiated was a small hand shuffled shoe, so he may well have been tracking cards through the shuffle too, as the top players are able to, thereby giving him a further edge beyond that nominally calculatable per the agreed rules.
Re:I Can't Help But Feel (Score:5, Interesting)
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.
Yeah, I was going to say (Score:5, Interesting)
As a poker player from before the poker boom, I can assure you the house doesn't make a ton of money on it. That's why poker rooms were disappearing all up and down the strip before the boom. Caesar's Palace had even closed the poker room on their main floor about 18 months before the poker boom started (with Chris Moneymaker's win).
Poker was seen by most casinos as only being there to bring in players who wouldn't otherwise come in. So it was located next to the sportsbook if it was there at all. Only Wynn's properties (The Mirage and later Bellagio) were trying to use poker with the casual (as opposed to townie) crowd.
I was sure glad to see that change, but I don't kid myself that it could easily swing back. Because the house loves high take games, and poker isn't one of them. They also like things that are cheap to run (automated systems like slots) and poker isn't one of those either.