Blackjack beaters and the Massachusetts Institute of Technology (MIT) seem to go hand in hand, and Edward O. Thorp is another on our list of famous blackjack players who knows it well – he was one of the professors there.
He left in 1961, long before the famous MIT Blackjack team was born, but the connection is an interesting one nonetheless.
His story starts back in 1932 in Chicago, Illinois, way back when Al Capone was roaming the streets and most gambling was still illegal in America.
He studied mathematics, receiving a PHD in 1958 before becoming a mathematics professor at a number of different universities, but throughout his life he would also be an author, a hedge fund manager, and most importantly to us, a gambler.
Between 1961 and 1965, Thorp worked at the New Mexico State University, and it was during this time that he started paying attention to blackjack.
New Mexico was only a few states from Las Vegas, and after one or two visits to the city that never sleeps Thorp had quickly realised that the game of blackjack was open to exploitation if the right mathematical theory was applied.
He knew that the player’s chances of winning were directly affected by each card that was played, because that card was no longer in the deck. Therefore, if many high value cards (the most beneficial in blackjack) are dealt, then the chances of a low card being dealt next were greater.
He used computer simulations to try his theory, dubbed ‘the 10 count system’, and then wrote a paper on it for the American Mathematical Society conference. However, when the event came around his session was jam packed with people who were clearly not mathematicians. Their garish dress sense and liking for big jewellery gave them away as gamblers who had heard about his paper and wanted to find out more.
This would be the nucleus for his best-selling book, Beat the Dealer.
Releasing Beat the Dealer
In 1962, Thorp wrote a book that would quite literally change the game of blackjack forever, not to mention the security methods used in casinos.
His book, Beat the Dealer, blew the lid off the game of blackjack, explaining how keeping a running count of the cards and betting big when they were likely to be in the player’s favour could turn the tables on the casino and give the player the advantage.
It served as the inspiration for many of the other players on this list, who devised their own tactics after reading Thorp’s book and became legends of blackjack in their own right.
The book sold over 700,000 copies after its release, earning it a place on the New York Times Best Selling list which, for such a speciality book was astounding.
Even to this day it has never gone out of print, selling at least a few thousand copies annually. This is despite the fact that Thorp’s system is no longer viable, since the single deck games for which his system was created are either no longer or available or have changed so much that the player advantage has gone.
At the time though, the book did two things:
- Increased the number of card counting blackjack players by untold amounts
- Allowed the casinos to identify a weakness and how to fix it
It explained exactly how the system worked and how to implement it. This was obviously detrimental to the few card counters already out there doing it, but for Thorp it was an academic study rather than a way to get rich. It was the system itself that interested him more than the cash.
The result wasn’t as damaging as the casinos first thought, since most players weren’t as gifted as Thorp and couldn’t use the system properly, and for those that could new rules were introduced which took away their edge.
This was back in the days when organised crime was still heavily involved in the casino industry, so less dignified methods were also used such as intimidation and even drugging.
Leaving Blackjack Behind
When he had first used his system in a real casino along with another gambler known in his book as Mr. X; Thorp had won $11,000 in a weekend, but that paled in comparison to the money that millionaires were giving him to gamble with on their behalf.
To begin with it was easy enough, but as his fame grew it became more and more difficult for Thorp to get past security – he even wore disguises such as fake beards and wraparound sunglasses for a while.
Eventually though, with more and more people knowing who he was and with casinos changing the rules to eradicate his edge, Thorp’s blackjack days were over.
He wasn’t the first player to count cards, the Four Horsemen of Aberdeen claim that particular title, but he was the first to invent a system that gave the player the edge over the casino. Although his system is redundant these days, many others have been devised because of it.
He moved onto roulette for a short time, devising the first wearable computer that could calculate the area of the wheel the ball would land based on the speed of the wheel and the bouncing ball; but once that project was complete he lost interest.
The stock market was where he would make his real money. Edward Thorp developed an arbitrage system which he used to great success, going on to create what is though to be the first ever hedge fund in 1969. Not before he had told the world how his system works of course, which he did with the release of his book, Beat the System, two years earlier in 1967.
He even figured out what Bernie Madoff was up to 17 years before he was officially caught out! A friend asked Thorp to look through his investment portfolio, and Thorp noticed that the numbers didn’t make sense.
Thorp had used his smarts to beat blackjack, roulette, and the stock market, making him a millionaire and he unselfishly shared his secrets with anyone who wanted to read about them. He was one of the first seven people inducted into the blackjack hall of fame in 2002.