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Thorp's first winning strategy was based on counting fives. He recommended betting heavily when they were depleted, and also playing a slightly different strategy when no fives were in the deck. His next innovation—upon which most winning card counting systems in use today are based—was called the "ten-count." In this system, tens and non-tens were counted separately. Larger bets were placed as the proportion of tens to non-tens in the deck became larger.
The ten-count system, as Thorp created it, was not easy to learn or apply in a casino. It required keeping two separate "backward" counts, and computing the ratio of tens to non-tens prior to betting and strategy decisions. Thorp played his system with what today would be considered a wild betting spread, sometimes jumping from a table-minimum bet of a dollar to a table-maximum of $500. Casinos were unaware of the power of Thorp's system, especially when they saw some of the "unusual" plays he made—like splitting 8s vs. dealer up-cards of tens and aces—and many continued dealing their single-deck, hand-held games to him down to the last card. Players able to use Thorp's system had an enormous advantage over the house, and players capable of following even a crude approximation of the strategy could win big if they used even a moderate betting spread in the deeply dealt single-deck games that predominated.
Once the Vegas casinos realized a legitimate winning system was being employed at their blackjack tables, they took drastic action, changing the rules of the game. This was in 1964, eight years after the first publication of the relatively accurate basic strategy, and two years after the advent of Thorp's Beat The Dealer.
The rule changes did not last long because, to the casinos' dismay, players stayed away from the tables rather than play against the new rules.
Casinos began losing a lot of money. So, bracing themselves for the worst, they changed back to the original rules.
The worst never came; in fact, the opposite occurred—blackjack became the most popular table game in U.S. casinos. Everyone, it seemed, believed they could beat the game, but few put in the time and effort to learn a legitimate system. Many blackjack systems were sold that were not mathematically valid, and players who did have valid systems often had no understanding of normal fluctuation. They overbet their limited bankrolls and tapped out before they ever had a chance to see the long run profits. Most importantly, casinos learned to recognize card counters by their playing styles.
Card counters jumped their bets suddenly, they paid inordinate attention to everybody's cards, they were quiet, they concentrated, and they didn't drink or socialize. They were often young collegiate types who didn't fit in with the normal run of tourists and vacationing businessmen.
Once spotted, a suspected card counter would be silently observed by the pit boss or "eye in the sky." If suspicions were confirmed, the dealer would be signaled to "shuffle-up" on the counter. If the suspect changed tables, the "heat" would follow him. If he did not leave the casino, he would be asked to leave the blackjack tables, and ultimately ordered to leave the casino. Thus, the casinos weeded out the few competent players and let hoards of fools who thought they could beat the tables with sloppy play and invalid systems play to their hearts' content.
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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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