Classic ringer's game: they underestimated his ability, including the meta-ability to calculate odds and stay unemotional. Most players, even high rollers, get into the game and start to make hunch bets as play goes on. He was disciplined enough to trust the math and not waver his strategy.
The Man Who Broke Atlantic City
81–90 of 93 posts
Re: The Man Who Broke Atlantic City
#82Earlier quoted context omitted.
No, that still doesn't make sense. The loss discount was on a per-trip basis, not per hand, so basically if at the end of the week you were down $100k, you only owed $80k. The rules were generous but NOT totally even. The house still had around 0.25%, which is low, but not unheard of. Even on the Vegas strip you can find Blackjack games open to the general public under 0.50% house edge. Of course, that's with optimum…
I agree, but it appears that while he doesn't "count", He plays a more general "averages" game. Per the article: "More useful, for his purposes, is running a smaller number of hands and paying attention to variation. The way averages work, the larger the sample, the narrower the range of variation. " Edit: I would guess he's developed some algorithm for keeping track of swings and general variation, so he plays not h…
This is correct. If the variation is high enough, the per-trip discount starts to approach the value of a per-hand discount, which of course is tremendously favorable. If he's a real whiz with the numbers, he could even have altered his play to slightly less absolute advantage but greater variation, and therefore greater advantage in the model given per-trip discount vs probable # of hands played per trip.
Re: The Man Who Broke Atlantic City
#83Earlier quoted context omitted.
Probably the best evidence for your argument is the fact that he apparently negotiated a hand-shuffled shoe. I'm amazed anyone would agree to it, since it's pretty much a giant warning sign that the guy is planning to exploit poor shuffles.
The shuffles needn't be poor. The existence of the hand-shuffled shoe just means he has the opportunity to count or shuffle track. The former is impossible if they use a continuous shuffle machine and I imagine the latter is either impossible or too difficult to use effectively. I agree it makes no sense for the casino to agree to that if that's outside their normal rules. I guess they want high rollers to think they…
another factor: as an inside guy, he probably knew their precise algorithm for catching counters. I suspect he does count, but knows exactly how to vary his play to keep just south of the model targeting him as a counter.
Re: The Man Who Broke Atlantic City
#84Just goes to show that the world is still human in some regards, and communication and negotiation skills are still king (pun def. intended.)
Re: The Man Who Broke Atlantic City
#85The short version: Because of the recession casinos are desperate for high-rollers. To lure them in they offer perks. Some of those perks include slight modifications to the rules and a "loss discount" -- for example: losing $500k only costs you $400k. This guy negotiated rules that changed his odds to 50/50. Then he negotiated an 80% loss discount, which meant for each $1 of upside, his downside was $0.80. So to pul…
No, that still doesn't make sense. The loss discount was on a per-trip basis, not per hand, so basically if at the end of the week you were down $100k, you only owed $80k. The rules were generous but NOT totally even. The house still had around 0.25%, which is low, but not unheard of. Even on the Vegas strip you can find Blackjack games open to the general public under 0.50% house edge. Of course, that's with optimum…
The odds of beating 3 separate casinos, over a reasonable number of hands, even against a very low house edge, are quite small.
No one is writing stories about the millions of other high rollers who lost. It's entirely possible his outcome was driven entirely by chance alone. No card counting, no special expertise other than knowing the odds of the game. Just sheer luck. Unfortunately, that doesn't make for a very interesting read.
Re: The Man Who Broke Atlantic City
#86The description of his odds system did not make a lot of sense to me; especially in light of the statement that he does not count cards. Can anyone elaborate? "Many casinos sell laminated charts in their guest shops that reveal the optimal strategy for any situation the game presents. But these odds are calculated by simulating millions of hands, and as Johnson says, “I will never see 400 million hands.” More useful,…
The charts are maximizing EV without taking into account the discount he negotiated. With the loss discount, it becomes more profitable to increase short term variance beyond what the chart strategies would lead to.
I'm sorry but your answer neglects the second paragraph that I quoted. That seems sort of important...
Re: The Man Who Broke Atlantic City
#87Earlier quoted context omitted.
No, that still doesn't make sense. The loss discount was on a per-trip basis, not per hand, so basically if at the end of the week you were down $100k, you only owed $80k. The rules were generous but NOT totally even. The house still had around 0.25%, which is low, but not unheard of. Even on the Vegas strip you can find Blackjack games open to the general public under 0.50% house edge. Of course, that's with optimum…
I agree, but it appears that while he doesn't "count", He plays a more general "averages" game. Per the article: "More useful, for his purposes, is running a smaller number of hands and paying attention to variation. The way averages work, the larger the sample, the narrower the range of variation. " Edit: I would guess he's developed some algorithm for keeping track of swings and general variation, so he plays not h…
What struck me as very odd was the description of the 800k play: He had two tens and two elevens, and decided to stand. That makes no sense to me, as he would have lost nothing by getting four more cards.
Also, the article made some reference to variation, without explaining the edge. I'm guessing there was a real point lost there.
Re: The Man Who Broke Atlantic City
#88Earlier quoted context omitted.
"... The odds of beating 3 separate casinos, over a reasonable number of hands, even against a very low house edge, are quite small. ..." what about the MIT Blackjack team? (I assume you're refering to Blackjack) ~ https://www.youtube.com/watch?v=gXR5sKR3f-E&feature=rela...
They were counters. I meant the odds of beating 3 casinos without counting, which is that the article was claiming.
"... They were counters. I meant the odds of beating 3 casinos without counting ..."
from the article it looks like pre-counting (odds) using software isn't factored or detected.
Re: The Man Who Broke Atlantic City
#89I thought casinos were mostly fronts for money laundering, but since this has a story to it, there is credibility that a growth industry like gambling has real credibility in the startup scene. Therefore, there should be more gaming startups in YCombinator.
Re: The Man Who Broke Atlantic City
#90Earlier quoted context omitted.
It depends on how he expects to be taxed. If this is his only session during the year, he actually wins 60-70% of the money vs losing 80%. So he needs to either be way ahead or way behind from other gambling activity for this to work out the way you described (assuming he's a US citizen).
that's interesting, but i'm not sure i follow or agree - i can't put numbers on it, but intuitively his variance feels a bit like, but less than, poker's variance. Poker graphs look like a sawtooth of small losses and big wins. This means he would have to get spectacularly unlucky to be down after 50 sessions, given his positive pre-tax expectation[1]. so it depends how he structures his taxes. if he can get his taxe…
His rebate is cumulative with the casino according to the article, except that they allowed him to reset it when he started this streak. He effectively only has one session per casino for rebate purposes.
Taxes are always computed on net winnings annually. Filing as a pro can affect the rate and allow deductions for expenses, but even amateurs can deduct losing sessions against winners if they have documentation.