## How to win at blackjack

Over the course of a few months last year, blackjack player Don Johnson took three Atlantic City casinos for \$15 million. And he didn’t do it by counting cards…he used the same techniques one might use when buying a used car.

Johnson is very good at gambling, mainly because he’s less willing to gamble than most. He does not just walk into a casino and start playing, which is what roughly 99 percent of customers do. This is, in his words, tantamount to “blindly throwing away money.” The rules of the game are set to give the house a significant advantage. That doesn’t mean you can’t win playing by the standard house rules; people do win on occasion. But the vast majority of players lose, and the longer they play, the more they lose.

Allan Benton said it and so did Robb Stark to Jamie Lanister (and I’m totally paraphrasing here): If I do it your way, you’re going to win. We’re not going to do it your way. (via daring fireball)

Update: Kid Dynamite asserts that the article got it wrong about the math involved.

No. That’s not right at all. You’re failing to use their discount against them: you’re getting no value from it if you keep playing when you’re “far enough ahead” !!! Let me put it this way: pretend you’re up a million, and you’re betting \$ 50k a hand. let’s just pretend that each hand is 50/50 win/lose (it’s not, but indulge me for simplicity’s sake). So each additional hand has no positive expected value for you (nor any negative expected value).

However, if you pick up your million dollar win, walk across the street to the other casino who will give you a 20% rebate on your losses for the session, and start to lose - say you lose \$ 1MM now - you’re MUCH better off. You only have to pay \$ 800k to the new casino (they rebate 20% of the million dollar loss), but you won a million at the first casino - you’re still up two hundred grand. On the other hand, if you stayed at the first casino and proceeded to lose back your million in winnings, you’re now flat - because it’s all the same session so you don’t get the benefit of the loss rebate. Capiche?

And so the question still remains: how did Johnson do it? (thx, @harryh)

## Gambling strategy

Let’s say, for example, you want to bet on one of the highlights of the British sporting calendar, the annual university boat race between old rivals Oxford and Cambridge. One bookie is offering 3 to 1 on Cambridge to win and 1 to 4 on Oxford. But a second bookie disagrees and has Cambridge evens (1 to 1) and Oxford at 1 to 2.

Each bookie has looked after his own back, ensuring that it is impossible for you to bet on both Oxford and Cambridge with him and make a profit regardless of the result. However, if you spread your bets between the two bookies, it is possible to guarantee success (see diagram, for details). Having done the calculations, you place £37.50 on Cambridge with bookie 1 and £100 on Oxford with bookie 2. Whatever the result you make a profit of £12.50.

I say relatively because there are literally millions of pages on the web just about blackjack statistics. For instance, it’s easy to see how you’ll lose money playing blackjack in the long run — card counting aside — by looking at this house edge calculator. The only real advantage to the player occurs with a one-deck shoe and a bunch of other pro-player rules, which I imagine are difficult to find at the casinos. (via big contrarian)

## Jeff Ma, who was a key member

Jeff Ma, who was a key member of the infamous MIT blackjack team, notes the turn around of the Oakland A’s and the reversal of criticism directed toward GM Billy Beane. Even Steven Levitt, who thinks not too highly of Moneyball, has conceded that maybe Beane and the A’s are onto something.

## Life lessons from blackjack

Life lessons from blackjack. You gotta know when to hold ‘em, know when to fold ‘em…