After taking interest in them, he began riding them competitively at age 15.
He then became a professional jockey.
In 2011, a blackjack player made $20 million over 4 months,
and ended up bringing some of the topmost casinos to their knees.
Here's the crazy story of how he pulled it off.
🧵
After taking interest in them, he began riding them competitively at age 15.
He then became a professional jockey.
Eventually he couldn't keep up the routine.
So, he quit the job, and went to Philadelphia to manage racetracks.
That race track evolved into the Parx Casino, in Bensalem.
Johnson was in charge of day-to-day operations, including the betting operation.
That's where he started learning about gambling.
Around 2000, he started a business that does computer-assisted wagering on horses.
The software also defined risk to a degree that was impossible at that time.
1/ You play against the house.
2/ Two cards are placed face up before the player,
and two more cards, one down, one up, before the dealer.
A card’s suit (heart, spade, diamond, club) doesn’t matter.
Only its numerical value matters.
Each face card is worth 10.
An ace can be either a one or an 11.
The player has to scan the cards on the table before him.
Then, he can either stand or keep taking cards in an effort to approach 21.
The player can't know exactly what the hand is.
That's exactly what makes this a game.
Card counters keep a mental tally of every card dealt.
Then they adjust the bet according to the value of the cards that remain in the deck.
In most states (but not New Jersey), known practitioners are banned.
Usually, card counters and the way they bet have a specific pattern.
The casinos monitor for such pattern to show up and flag/ban such players.
Casinos are usually after the high rollers who are also known to be average or outright bad players.
These are guys who wager tens or hundreds of thousands per hand.
Casinos distract them with such cheaper perks so that they don't realise they are losing more than these free perks cost.
When someone makes all the right moves, it brings down the house advantage.
With such players, the house might win 2-3 hands every 100 hands.
These players don't use the perfect strategy, and play randomly.
With these players, there's a big house advantage.
It is these kind of "whales" who all casinos compete to bring in to play.
Then they have to discourage the skilled and seduce the unskilled.
Once a player earns a reputation for winning, the casinos stop seducing them.
The last thing a skilled player wants is a big reputation.
Some whales even wear disguises when they play.
Many casinos sell laminated charts in their guest shops that reveal the optimal strategy for any situation the game presents.
But these odds are calculated by simulating millions of hands.
A normal player never sees million hands.
Running a smaller number of hands and paying attention to variation.
The way averages work, the larger the sample, the narrower the range of variation.
A session of 600 hands will display wider swings.
It will have steeper winning and losing streaks, than the standard casino charts.
This insight is important when the betting terms and special ground rules for the game are set.
He gained experience regulating the industry.
He also diligently studied the casinos, their house edge, and their games, for years.
He was waiting for the right opportunity.
He does not just walk into a casino and start playing, which is what roughly 99 percent of customers do.
He considers that as “blindly throwing away money.”
People do win occasionally.
But the vast majority lose.
The more they play, the more they lose.
It's all in the law of large numbers.
They negotiate.
The casino values high rollers more than the average customer.
So, casinos will usually be willing to lessen their edge for them.
Their primary method of doing this is through loss rebate discounts.
For example,
Discount offered -> 10%
Player loses -> $100,000
Player pays -> $90,000.
There was a catch:
If the discount offered is for a lifetime & for loss upto $500k, you pay 10% lesser only once you have lost whatever you made previously.
you'll have to lose $4.5 million in order for the 10% discount to kick in.
This requirement brings a theoretical edge to the casino, which can compensate the cost of the rebates/discounts.
But, despite all this, the player usually still loses, and casino ends with slightly less of the player's money.
But, once recession set in after 2008, their revenues began to slide.
In the Atlantic City, the 11 casinos together made $5.2 billion in 2006, but only $3.3 billion in 2011.
Their table revenues were going down.
The number of high-rollers willing to spend on games also started going down in number.
The casinos had to do something.
Part of such competition meant giving deals to high-rollers (the ones that casinos want to seduce) that were unheard of.
By late 2010, the discounts started edging higher and were around 20% at one point.
It also meant that if the casinos were right, they stood to make more return out of that risk.
Don Johnson who was constantly keeping in touch with the casinos, started noticing this desperation.
So, casinos started inviting him with deals that were unheard of in the New Jersey gambling circle until then.
He mentioned that he doesn't want a lifetime discount and that it is skewed against him.
As part of the deal, the casino offered him a trip-to-trip discount.
If you made $4m in the previous 4 trips, you don't have to lose that first before losing more and activating the discount.
These deals effectively brought down the house advantage.
They use such models to come up with deal terms for high rollers, without giving up the house advantage.
This is highly dependent on the player's skill level.
But the casinos relaxed these to an extent it ended up causing damage.
Some of the terms included:
- Playing with a hand shuffled six deck shoe
- the right to split and double down on upto 4 hands at once
If the cards you have total 6 plus an "ace" card, the ace can either be a 11 or 1 depending on the card that you draw.
This is to prevent the player from going bust by going above 21 in the total of the cards in his hand.
With the 20% discount he was offered, he was only risking 80 cents with every dollar he staked.
He brought the $1 million with the rationale that he'd never lose the entire $1 million.
He figured if he lost $500k, he'd kick in the discount of $100k, and pay them only $400k and leave.
That's what happened.
And, from his first hand, he started winning.
He bet $100,000.
He was dealt two eights.
If a player is dealt two eights, he can choose to play each card as a separate hand.
In effect, this doubled his bet.
Lucky he was, the next two cards were eights too, and he chose to split again.
He was now playing 4 hands, each with 8, and $400,000 at stake.
Johnson had the option to double down his bets.
He doubled down on all 4 hands.
Now his risk was $800k.
The card the dealer drew was a 10.
There was a face down card.
If that card was 7 or higher, the dealer's hand would go over 21, and the dealer would lose.
Johnson's bet was that the dealer's face down card would be 7 or more.
If the dealer got a 6 or less, Johnson would lose $800k.
The dealer opened the face down card.
It was a 10.
In a sequence of 3 hands thereafter, he made $1.2 million.
Johnson kept going.
The pit bosses noticed.
He went on a roll, and won $5.8 million that night.
He repeated the same feat in Borgata (got cut off after $5 million) and the Caesars (cut off after $4 million).
Johnson denied, and went back to his hotel suite with his winnings.
The Tropicana casino eventually fired the CEO after the incident, as he was the one who'd granted the deal terms to Johnson.
https://t.co/qsK08bzYln
In 2011, a blackjack player made $20 million over 4 months,
— Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0 (@theBuoyantMan) August 12, 2022
and ended up bringing some of the topmost casinos to their knees.
Here's the crazy story of how he pulled it off.
\U0001f9f5
Follow me @thebuoyantman for getting notified whenever I post such stories.
More from Shravan Venkataraman 🔥🚀💰
In today's round up, I have some amazing threads, resources, and plenty of solid advice for business, finance, career from twitter.
Here's the roundup of 17 of the best and the most useful threads, tweets, and resources I found last week. 🧵
1/ How to find spreadsheets on any topic in the
2/ A thread by @wes_kao on making your customers hungry and excited to buy from
3/ Life brings you a lot of afflictions. But if you look around, there's a lot of beauty around you. Most often, drowning in the afflictions, we can't recognise or appreciate the beauty.
@wdmorrisjr wrote a damn good thread on finding beauty around us.
4/ This one is for all the job goers and job seekers.
@SahilBloom who recently hit 500k followers and has several accomplishments to his belt (career wise) wrote this thread on standing out in a hiring
Here's the roundup of 17 of the best and the most useful threads, tweets, and resources I found last week. 🧵
1/ How to find spreadsheets on any topic in the
How to find spreadsheets on any topic in the world:
— Blake Emal (@heyblake) February 13, 2022
1. Go to Google
2. Search site:docs(dot)Google(dot)com/spreadsheets \u201cYOUR TOPIC\u201d
3. Search, scroll, succeed pic.twitter.com/VJsYQKyi0J
2/ A thread by @wes_kao on making your customers hungry and excited to buy from
How to get customers excited, hungry to buy, and ready to say yes:
— Wes Kao \U0001f3db (@wes_kao) February 13, 2022
3/ Life brings you a lot of afflictions. But if you look around, there's a lot of beauty around you. Most often, drowning in the afflictions, we can't recognise or appreciate the beauty.
@wdmorrisjr wrote a damn good thread on finding beauty around us.
You\u2019re not looking for more success, stuff, or sex.
— David Morris (@wdmorrisjr) February 13, 2022
You\u2019re searching for beauty.
Here\u2019s how to find it: \U0001f9f5
4/ This one is for all the job goers and job seekers.
@SahilBloom who recently hit 500k followers and has several accomplishments to his belt (career wise) wrote this thread on standing out in a hiring
10 ways to stand out in a hiring process (that don\u2019t involve your resume):
— Sahil Bloom (@SahilBloom) February 13, 2022
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What is the difference between “alias” and “pseudonym?”
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MDZS is laden with buddhist references. As a South Asian person, and history buff, it is so interesting to see how Buddhism, which originated from India, migrated, flourished & changed in the context of China. Here's some research (🙏🏼 @starkjeon for CN insight + citations)
1. LWJ’s sword Bichen ‘is likely an abbreviation for the term 躲避红尘 (duǒ bì hóng chén), which can be translated as such: 躲避: shunning or hiding away from 红尘 (worldly affairs; which is a buddhist teaching.) (https://t.co/zF65W3roJe) (abbrev. TWX)
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Interesting that MXTX used this name for one of the characters who suffers, arguably, the worst of these three emotions.
3. The Qian kun purse “乾坤袋 (qián kūn dài) – can be called “Heaven and Earth” Pouch. In Buddhism, Maitreya (मैत्रेय) owns this to store items. It was believed that there was a mythical space inside the bag that could absorb the world.” (TWX)
1. LWJ’s sword Bichen ‘is likely an abbreviation for the term 躲避红尘 (duǒ bì hóng chén), which can be translated as such: 躲避: shunning or hiding away from 红尘 (worldly affairs; which is a buddhist teaching.) (https://t.co/zF65W3roJe) (abbrev. TWX)
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Interesting that MXTX used this name for one of the characters who suffers, arguably, the worst of these three emotions.
3. The Qian kun purse “乾坤袋 (qián kūn dài) – can be called “Heaven and Earth” Pouch. In Buddhism, Maitreya (मैत्रेय) owns this to store items. It was believed that there was a mythical space inside the bag that could absorb the world.” (TWX)