When it comes to how casinos look at their customers, there’s one fact that we’ve always found pretty darn amusing. A guy can walk into a casino with ten grand and lose every bit of it in thirty minutes because he makes a series of sucker bets that give the house odds ranging from 30-55%. This guy is a true VIP, a great customer, and someone that they are happy to see back ant anytime. If a professional blackjack team enters the casino and uses intelligent betting systems to gain a 1-3% advantage over the casino, however, they are considered scandalous criminals that end up being banned for life.
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This was the story for the MIT and Caltech blackjack teams; before the end of their triumphant run they were more famous to casino security than Madonna, Miley Cyrus, and Johnny Depp combined. When these players entered a gaming establishment on almost any continent, security forces scrambled throughout the casino like their main vault was being compromised or the building was on fire. These card counting scandals caused so much havoc in places like Vegas and Atlantic City that the entire MIT student body ended up being banned from entering at one point….all because a couple of students and a crafty professor figured out how to gain a 1% advantage during very short spans of time.
How much money did the MIT and Caltech blackjack card counting teams end up winning? Well, that’s pretty hard to say since it was a seriously elaborate scandal. Regardless of their actual talent when it comes to card counting and betting strategies, the one thing that both of these groups desperately needed was investors to fund their operation. That meant they were taking in hundreds of thousands of dollars from outside sources and paying as much as a 250% return on investment over the course of the year, so money was going out as quickly as it was coming in. Although it is obvious that these teams took in millions of dollars from casinos all over the world, it is difficult to say how many tens of millions when all was said and done.
In case you are not familiar with how the MIT blackjack scandal worked, here’s a quick rundown of the facts. The team would walk into a casino and place at least one player at every high stakes blackjack table in the house. This first round of participants only bet the table minimum and never varied their bet regardless of how strong or weak the deck became. Their job was solely to count cards using a +/- system and to alert other members of the team when the deck became extremely lucrative. At that point they would signal the one of the team’s high rollers, and once he joined the table he would be the maximum until the deck commanded otherwise.
So what went wrong with the MIT/Caltech blackjack scandal? Well, it’s pretty much the same thing that goes wrong with every successful business partnership; each person wanted more money. It is important to remember that the players were not risking their own money, so instead of receiving a large portion of their winnings these college students were paid hourly instead. Now, it was definitely good money compared to working at McDonalds (they averaged $80/hr plus bonuses), but when one of them raked in $60,000 in one night and walked away with $800 for his troubles…it’s not very hard to imagine how that would seem unfair.
Of course, the true scandal behind these blackjack teams really came from within as players left to start their own ventures with private funding. Some of them worked out very well and others were a disaster, but we bet if you look hard enough on your next trip to Vegas that you might be able to spot a third or fourth generation blackjack team that descended straight from the MIT and Caltech partnerships. Even though these guys and gals have become excellent at deception and blending in with other players, we can almost guarantee that they’re still out there and raking in huge money.