Denied!

Recently, the NPR show Planet Money had an episode about Edward Thorp, the man who invented blackjack card counting. Thorp is a mathematician, and he saw blackjack as an interesting problem to analyze as opposed to a way to get rich quick. At the time he discovered card counting, the established idea was that there could not possibly be a “system” that would beat blackjack. The odds are what they are, the payouts are what they are, and the casino has a baked-in winning edge of about 1/2%, meaning they take fifty cents out of every hundred dollars wagered, no matter what.

Blackjack is an easy game. You and the dealer get two cards. You see the dealer’s top card, but not the “hole,” or face-down, card. Cards are valued as their numeric value; face cards count as ten; and an Ace can either be one or eleven, your choice. A Queen and a Nine are nineteen, a Three and a Four are seven, an Ace and a Six can either be seven or seventeen. An Ace and a Ten or face card is special: It’s a blackjack, and it pays you 1 1/2 times your wager.

Your job is to take your cards and get as close as you dare to 21, without going over (called breaking or busting). The way you do that is to ask for cards from the dealer when it’s your turn (called hitting), as many as you want, until you feel satisfied with your hand, or until you break by going over 21. So, if you are dealt a six and a four, making ten, you want to hit to get get closer to 21. If you hit and are dealt an eight, say, you have eighteen, and the odds are at this point that you will break if you hit again, so you elect to stay or stand. All players are playing against the dealer, not each other, and when all the players have played their hands, the dealer plays his. Dealers have no choice in what they do. Different casinos have slightly different rules, but the dealer always follows whatever the rules are. In most casinos, dealers must play until they get to 17 or better, or bust.  If the dealer busts, every player who didn’t bust wins. If the dealer gets between seventeen and twenty-one, each player who has a higher value than the dealer wins. If there is a tie, (called a push) it’s a tie and you keep your bet.

The casino edge varies based on their rules, but it is usually around 1/2%. Edward Thorp realized that this winning percentage was based on discrete hands, considered only as a single hand dealt from a full deck. What really happens is that in real life, the odds of who wins the hand depend on which cards have already been played from the deck. In other words, how a hand plays out is not the same hand to hand, but changes as the dealer plays multiple hands from the same shuffled deck.

For example, if you are playing blackjack with three players and a dealer in a single-deck game, you may have three or four hands between shuffles. When you play the first hand, all the cards played are now out of the deck. Therefore, these cards are no longer available for the remaining hands, changing the absolute odds of the game. If in the first hand lots of “tens” (10, J, Q, and K) and aces are played, these cards are no longer available for the subsequent hands. This lowers the odds for the player, and increases them for the dealer, because the dealer does better if there are more low cards and less aces available to make blackjack for a player. Card counting is the art of tracking which cards have been dealt, thus telling you what cards are left. By doing that, you can recognize the times when the remaining cards are in your favor, and therefore are more likely to win. To take advantage of this, you place a higher bet: two, three, even ten times more than your base wager. Therefore, when you win, you win more. Casinos quickly realized that they were wrong, that card counting was real, and got to the point where they were banning card counters and mixing up the rules to make card counting virtually ineffective.

My father was a mathematician working in the aerospace industry back when Thorp made these discoveries. Back in the ’60s, the only computers available were in huge companies and the US government. There were no personal computers back then. But, he was working in a lab where he had access to a huge mainframe computer, and so he developed a program that calculated the actual odds of blackjack in different betting scenarios and use cases, and he ran the program during “slack” time on his company’s computer. Overall, he simulated over one billion hands. Using the result he was able to validate Thorp and come up with a “basic game” of blackjack: when to hit, when to stay, etc., and the data was used as a basis of his first blackjack card counting system.

Because, yes, my father was Jerry L. Patterson, notorious in the blackjack community back in the day. I introduced him here last month. He wrote a book called “Blackjack: A Winner’s Handbook” in 1979, soon after casino gambling became legal in New Jersey. He started giving blackjack seminars and started to develop and market other systems for blackjack and other casino games. He did well over the years. Some of his systems seemed to teeter on the mystical, upsetting the pure math blackjack crowd. He was even called the “Witchdoctor of Blackjack” by one prominent hard-core card counting guru. My father is in his eighties now, and retired from the gaming business.

I take after dad in a number of ways, one of which is that I have a good feel for numbers. When I was younger, I decided to try out card counting and some of the other techniques. I quickly found out that it would be difficult to make a serious living as a pro blackjack player, and even if I could, it is a lot of work to get really good at the techniques and stay on top of the casino counter-measures to these techniques. I also know the odds well enough to know that if you screw up even a little, you will lose fast. Casinos only seem friendly; their real job is to suck you dry if they can, and they are good at it.

I visited dad a while back and thought it might be a fun thing for him to review his books and training materials and come up with a retrospective of his best systems in a new book – but alas, the copyrights belong to the publishers. But recently I thought, well maybe I could do it, be a sort of “Patterson plays Patterson” and take two or three of his best systems, learn them, and then see how they do now, now that casino gambling has spread far and wide across this land. He has systems for blackjack, craps, and roulette, and really, the games haven’t changed that much, so theoretically, the techniques should still have value with maybe a few tweaks. It also gives me an excuse to go to Reno and Vegas – with the bonus of being able to write off the trips as research. Then, I could put together a book about the experience. Win or lose, there’s a story here.

Well, I decided to run this idea by dad. “No way!” he cried. “That’s a terrible idea! There’s no way you can make money at it, and the casinos are wise to it now, and anyway it’s hard to learn it, and there are much better things to do with your time!”

I must admit, I was taken aback. He was adamant about it! I reminded him that casinos are not that savvy – remember Phil Ivey cleaning the clock of the Borgata. Remember that there are many more casinos everywhere, with varying levels of maturity. And, I told him, it would be fun!

“No way!”

We discussed this for a full forty-five minutes. He never wavered. I told him “but dad! You already gave me the first chapter! ‘The Book They Didn’t Want Written!  Patterson denies his own son!” It was all falling on deaf ears.

I tried to peel off which were his favorite systems. His legacy is his craps system, but he said “no, they’ll toss you out! They know about it now!” I told him, well, if they toss me out, at least I can’t lose any money.

Oh well, I tried. But, you know, I’m going to do this over the next few months. It is just too juicy not to. I don’t really have to ask him, because, you know… I have his books.

I’ll keep you posted.