Card Counting: Behind the Blackjack Tables
Introduction to Card Counting and Its Portrayal
The episode opens with a vivid portrayal of card counting, reminiscent of the 2008 film 21. Host Zachary Crockett sets the stage by describing a scene where an MIT student employs a card counting system to gain an edge in blackjack, amassing substantial winnings until the casino retaliates violently. This dramatization underscores the mythos surrounding card counters in popular culture.
Zachary Crockett [00:11]: "He uses this system to rack up hundreds of thousands of dollars in winnings until the casino notices his hot streak."
Crockett clarifies that while movies like 21 exaggerate the prowess of card counters, the reality is far more nuanced. The MIT blackjack team, on which the movie is loosely based, indeed harnessed card counting techniques to achieve success, but the actual process and outcomes differ significantly from their cinematic depiction.
House Edge and Casino Economics
Bill Zender, a consultant who aids casinos in maximizing profits, explains the fundamental concept of the house edge—the statistical advantage casinos hold over players.
Bill Zender [02:06]: "You're not going to put a game on the floor and let people come in and beat you. I mean, that's stupid."
Zender elaborates on varying house edges across different games, highlighting that while games like roulette and slot machines have higher house edges (ranging from 5% to 40%), blackjack offers a more favorable environment for players who employ strategic thinking. The slim house edge in blackjack—approximately 2%—creates opportunities for players to tilt the scales slightly in their favor through card counting.
Strategies: Basic Strategy vs. Card Counting
Crockett differentiates between basic strategy and card counting. Basic strategy involves following a set of predefined moves based on the player's and dealer's cards, reducing the house edge to about 0.5%. Casinos support this by providing strategy charts, ensuring that even with perfect play, the house maintains its advantage.
Ben [05:46]: "I'd say if you're playing perfect basic strategy, you can play at a 0.5% disadvantage. That's probably one of the lowest house edges there is, and that's probably why people like it."
To surpass the basic strategy, players like Ben adopt card counting—a method that tracks the ratio of high to low cards remaining in the deck to adjust betting strategies dynamically. This technique can provide a marginal edge of around 1%, turning blackjack into a volume game where slight advantages accumulate over thousands of hands.
Life of a Professional Card Counter: Ben’s Story
Ben, a pseudonym for a former professional card counter, shares his journey from novice gambler to adept card counter. Initially inexperienced, Ben struggled with basic games like craps and early blackjack attempts, which prompted him to delve deeper into the mathematics and strategies of the game.
Ben [04:08]: "You can actually learn how to play the game in a way where you take an edge over the house legally."
Through extensive study and practice, Ben mastered card counting, enabling him to maintain a consistent, albeit modest, income from blackjack. His commitment spanned 15 years, during which he never earned more than $100,000 annually from card counting alone.
Ben [09:19]: "I would say the best card counters in the world make maybe low six figures, but the majority of card counters make way less than that."
Despite the potential, Ben highlights the scalability issues and the constant threat of being identified and barred from casinos, which ultimately led him to abandon professional card counting in favor of a career in finance.
Casino Countermeasures and Their Effectiveness
Casinos employ various strategies to thwart card counters, ranging from surveillance and player profiling to altering game conditions. Zender notes that while casinos invest significantly in preventing card counting, the actual financial threat posed by counters is minimal compared to overall revenues.
Bill Zender [10:00]: "The threat of card counting is completely overblown by casino people. Everybody thinks there's a card counter lurking around the corner, and it's not like that at all."
Common countermeasures include restricting players from joining games mid-deck to prevent back-counting, increasing the number of decks used, and implementing continuous or frequent shuffling. These tactics, while somewhat effective in deterring counters, also inadvertently slow down game play, reducing the table turnover rate and overall profitability.
Bill Zender [15:06]: "The more decks you have, the less opportunities a card counter has to have a profitable situation."
Legal Implications and Casino Liabilities
While card counting is legal, casinos reserve the right to refuse service to anyone. However, aggressive tactics to remove suspected card counters—such as physical intimidation, false imprisonment, and refusal to cash out winnings—have led to significant legal repercussions for casinos. Ben recounts instances where casinos employed forceful eviction practices, resulting in lawsuits and substantial financial settlements.
Ben [14:11]: "And the settlement was $200,000 more than Ben or his friend had ever made from playing blackjack."
Such actions not only tarnish the casinos' reputations but also impose hefty costs, overshadowing the minimal financial threat posed by genuine card counters.
The Economic Trade-Off for Casinos
Consultant Bill Zender argues that the resources casinos allocate to combat card counting are disproportionate to the actual losses incurred. He contends that the money spent on deterring card counters—amounting to millions annually—is better invested in enhancing overall casino operations to attract and retain regular patrons.
Bill Zender [16:58]: "Casino people, they're very reluctant to change because sometimes if they make a change, it could backfire in the short term."
Despite these arguments, casinos remain steadfast in their countermeasures, prioritizing the prevention of card counting over optimizing game flow and player experience.
Conclusion: Is Card Counting Worth It?
Ultimately, the episode paints card counting as a challenging and often unrewarding endeavor. The marginal financial gains are outweighed by the constant vigilance required to avoid detection and the potential legal ramifications of aggressive casino countermeasures. Most card counters, like Ben, find the pursuit unsustainable and transition to alternative careers, recognizing that the economic benefits do not justify the risks and efforts involved.
Ben [17:35]: "It's just really not that scalable. And that's why I stopped. Once you get, like, known and you start getting thrown out and put in databases, like, pretty much the game's up."
Crockett concludes by emphasizing the broader economic context, where the negligible impact of card counters on the $60 billion U.S. casino industry renders the fear of card counting largely exaggerated.
Zachary Crockett [10:00]: "In the US casinos are a $60 billion a year business. When you think about the context, the financial threat from a couple hundred card counters is almost laughably small."
Notable Quotes
- Zachary Crockett [00:11]: "He uses this system to rack up hundreds of thousands of dollars in winnings until the casino notices his hot streak."
- Bill Zender [02:06]: "You're not going to put a game on the floor and let people come in and beat you. I mean, that's stupid."
- Ben [05:46]: "I'd say if you're playing perfect basic strategy, you can play at a 0.5% disadvantage. That's probably one of the lowest house edges there is, and that's probably why people like it."
- Ben [09:19]: "I would say the best card counters in the world make maybe low six figures, but the majority of card counters make way less than that."
- Bill Zender [10:00]: "The threat of card counting is completely overblown by casino people. Everybody thinks there's a card counter lurking around the corner, and it's not like that at all."
- Ben [14:11]: "And the settlement was $200,000 more than Ben or his friend had ever made from playing blackjack."
- Ben [17:35]: "It's just really not that scalable. And that's why I stopped. Once you get, like, known and you start getting thrown out and put in databases, like, pretty much the game's up."
Final Thoughts
"The Economics of Everyday Things" episode on card counting provides a comprehensive exploration of the practice's intricacies, the economic dynamics between players and casinos, and the real-life implications beyond Hollywood fantasies. Through engaging narratives and expert insights, listeners gain a nuanced understanding of why card counting, despite its allure, remains a challenging and often unprofitable pursuit in the high-stakes world of casinos.