Little is known of the original blackjack counting systems. In Beat the Dealer, Ed Thorp discusses a number of the first systems developers who had colorful names like "Greasy John" and "Stem Smitty." They had privately worked out crude but effective blackjack strategies that they used to win their livelihoods from the Las Vegas blackjack tables.
Until the early sixties and the publication of Dr. Thorp's book, most casinos felt that blackjack systems were like all other gambling systems, a lot of bunk. Prior to Thorp, the only "card counting" system that was recognized by the casinos as valid was "casing the aces," in which a player would markedly increase his bet (say from $5 to $500) in the second half of the deck if no aces had been dealt in the first half. Crude as this counting technique was, it was effective and the casinos knew it. Unfortunately, it was extremely easy for the casinos to detect. Because it was such a weak method, and because the players who used it rarely followed anything resembling proven basic strategy, a huge betting spread was necessary for the system to gain an advantage over the house.
Then, in 1956, a group of mathematicians led by Roger Baldwin tediously applied the methods of statistical analysis to the game of blackjack and developed a basic strategy which they published in a technical journal for mathematicians. This strategy, if followed rigorously, would narrow the house edge, making blackjack close to a break-even proposition for the player over the long run. Though a colloquial version of this paper was later published in book form, few gamblers took notice. Gamblers wanted winning systems, not "break even" systems.
One person who took particular note of this technical paper was Dr. Edward O. Thorp, a mathematician. He saw that Baldwin's strategy had been devised on old-fashioned mechanical adding machines, but he had access to what, in the early sixties, was a sophisticated computer. He wrote a more precise program than had been used by the Baldwin group, and subsequently developed a more accurate strategy.
Blackjack is a difficult game to analyze mathematically because the depletion of the deck constantly alters the makeup of the remaining cards, constantly altering the probabilities of winning or losing. It occurred to Dr. Thorp that using a computer he could analyze just how the makeup of the deck affected the possible outcomes of the various hands. His method was unique. He wrote a program to analyze the best strategy and what a player can expect in the long run, assuming various cards had been removed from the deck. He noted that the player's chance of winning was dramatically increased when fives left the deck. In fact, to remove any of the "low" cards—2, 3,4, 5, 6, or 7—worked in the player's favor in varying degrees. On the other hand, if tens or aces were removed, the player's chances were badly hurt.
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