I have two distinct lives. One in the trenches of low-budget film and television, the other in professional gambling. Because of the feast-or-famine nature of show business I need a reliable income... gambling. So here you will read about both worlds. Enjoy!

Wednesday, August 31, 2011

My interview with John & Laurie C. - MIT Blackjack team

This interview was conducted in 2002

The history of blackjack has many roots at MIT.   Ed Thorp, author of Beat the Dealer, did his original computer analysis at MIT on their computer.  When Resorts International opened in 1978 a group of MIT students combined forces to attack the casino, and the “MIT Team” was born.  Though there were players from other schools, who refer to it as the “Boston Team,” the casinos labeled it the MIT team, and the name stuck.   Alumni from the team have gone on to great things.  Joel Friedman was the pioneer of risk-averse betting strategies, which he wrote about in his landmark 1980 paper. He also published in the Gambling Conference papers, on Kelly Criterion and optimal simultaneous wagers.  Other players went on to create Windows 3, and Windows NT.  Players have come and gone, the team has morphed and split into factions, but for over twenty years there has been a constant. His name is Johnny C.  I sat down with John and his wife Laurie, who is another member of the team.

RWM: How did the MIT team start?

JC: Resorts International opened in Atlantic City in 1978.  Some of the students at MIT formed a team to go play.  As those players developed more experience, they joined up with others.  There were players from other schools like NYU, Princeton, and Harvard.  The turning point, which made the team something to be reckoned with, was when a Harvard Business School graduate was co-running the team.  He instituted checkouts and made people use the hi-lo.  Before that people used all kinds of complicated systems.  I hate to think how many errors they made.  I joined a couple years into it. 

RWM: How did you get involved?

JC: I went to an IAP class.  These were classes that people taught between semesters.  I learned about counting, but realized that you needed money to make money.  I didn’t have any money so I dismissed it.  Then a couple years later a friend of mine saw a sign that said, “Make $300 over spring break.”  One of the major factors in my going into blackjack was that I had difficulty at MIT.  The math department was really bad for undergraduates, so I had drifted into electrical engineering. Not because I had a passion for it, but because it was the best department.  Anyway, I went to this meeting at the student center.  I realized it was about blackjack, and I thought, “Oh yeah, this stuff again.”  Still, I thought $300 was okay, and it sounded kind of cool.  I practiced and got a little better.  A lot of people had expressed interest, but when spring break rolled around there were only five of us left.  As a result, I was able to squeeze into the car and I got to go to Atlantic City.

RWM: What year was this?

JC: 1981.  The first casino I went in was the Claridge, and it was overwhelming.  I saw people betting $5 and I thought that was a lot of money to be betting.  That would pay for a meal.   Then I was told to go to The Park Place, and back count.  I was given two hundred dollars and told to sit down when the true count got to +1, and bet $5.  I could bet $10 at a true +2, but that was it because my skills were marginal.  I didn’t trust myself.  I was still making basic strategy errors, and I would make counting mistakes.  I probably played 20 hours.  I got a lot better and had a lot of fun.   I checked out in the classroom shortly after that.  Then they would watch you in the casino.  You had to check out at nickels, then quarters, then blacks, and ultimately full stakes.  While I was checking out at blacks I got my first comp.   Wow, that was cool.  I didn’t have to check out at full stakes.  After that I was supporting the team, getting everybody free rooms and stuff. 
            It seems that people who end up doing the best had the least responsibility in the beginning.  Three out of four of our million dollar winners were just gorilla BPs.  In the beginning I was a playing BP, but then I made some basic strategy mistakes so they removed that responsibility from me.  I just had to follow the signals.  I would count but I would have this safety net.  By removing the burden from people at the beginning they could learn without much stress. 

RWM: Do you remember your first big score?

JC: I remember my first big hand.  I bet $1600 at the Desert Inn and split tens against a six.  At the DI you could split as many times as you wanted.  I had five hands.  After I split three or four times the casino manager came to watch.  He was laughing his ass off because this idiot Chinese kid was splitting tens.  The dealer busted so I won $8,000 on the hand.  After the shoe the casino manager came over and gave me his card.

RWM: What about your first big payday?

JC: That wasn’t until years later.  I first played on a bank where we won a bunch, but then lost most of it back.  My return was about $2,000.  It was somewhat disappointing but I had a great time.   My first big win was on a mini bank.  We made a trip to Atlantic City and I made $12,000.  But I only had $5,000 to my name so that was huge.  I got to buy the calculator I wanted. 

RWM: What was the biggest win for someone on the team?

JC: I think it was $250,000.  One of our players had established himself as a big player at Caesars.  That weekend he brought his family to Vegas.  We allow players occasionally to do that.  We don’t like it because there are so many risks of being thrown out and players feel pressure to avoid that, so they may not play their optimal game.   He gets to his room and it was some tiny room way in the back and he felt very insulted.  I was talking to him on the phone and he said, “These guys are going to pay.”  Okay, big words.  Then he calls me up and says, “Well, I made them pay.”  He won over $120,000 in one shoe and I guess $250,000 for the weekend.

RWM: What unit size did you play?

JC: We would bet two hands of $2,000 for each half- percent advantage. 

RWM: What was your maximum?

JC:  Well, the limit was $10,000. 

RWM: You’d bet two hands of $10,000?

JC: Or three.  One of our players bet up to six hands of $10,000.  Players on Tommy’s team complained to me about how blatant and excessive that was.

RWM: I’m surprised the biggest session was only $250,000 if you were betting that much.

JC: He didn’t last long.  But he won something like $400,000 in about 3 months of play before he quit playing due to intense heat.

RWM: What was S.I.?

JC: Strategic Investments, or S.I., was a partnership we formed when Foxwoods opened. 

RWM: How big was the bank?

JC: One million. We recruited about 40 people, and we won pretty well at the beginning.   We won $700,000 and then lost back almost all of it. 

LC: We were on the west coast, and we were just counting and winning.  The guys on the east coast were playing all these high e.v. and high c.e. games.  We didn’t even know what c.e. was.  We just cared about winning.  We kept hearing from the east coast guys, “We lost $100,000 but we had tremendous c.e.”  We didn’t want to hear from the east coast.  We called them the “least coast.” 

RWM: This is like the Rap Wars.  You’re the Suge Knight of the blackjack world.  Let’s talk about c.e.  What exactly is certainty equivalent?

JC: You can find this on the Internet, but essentially it is a variance-adjusted expectation.  Say you had a choice of fifty cents or a coin flip for a dollar.  Which would you take? The expectation is the same, but a rational person would take the sure money. Let’s make the numbers more meaningful.  Would you take a half million sure thing versus a million on the flip of a coin?  You get nothing if you lose the coin flip.  As the numbers get bigger you become more risk averse.  If I gave you $480,000 would you take it?

RWM: I’d take the 480.

JC: Would you take $400,000?  At some point you’re going to be indifferent.  The certainty equivalent for that situation is that number where you become indifferent.  Even though the expectation of one is greater, you have to subtract off something for the variance.

RWM: So the players pay was based on that certainty equivalent?

JC: Yes.  There are four parameters associated with the c.e.  One is your risk tolerance.  We preset that for the team, and people can invest more or less based on how risk averse they are.  We would pick .3 or .4 Kelly.  The other factors are bank size, expectation, and variance.  

RWM: These seem like tremendously important issues for teams.  How do you pay people equitably?  What is fair for everyone, and is enough to keep them playing when the bank is stuck and it looks like they won’t make any money for a long time?

JC: The way we changed over the years has reflected those concerns.  Initially we set a time target of say, six months, and paid people only if we won.  We found that if we were unlucky at the beginning we would only have a few die-hards left playing.  Typically those diehards were people with big investments, so they were playing to protect their investment.  Then we thought we could solve that if everyone was equally invested.  In reality you can’t do that.  We tried the socialist approach, and tried to get people to commit to trips at the beginning of the bank.  People would still drag their feet, so we had higher shares of win if you committed to more.  But a higher share of nothing is still nothing.  We tried a system based on getting your maximum bet out.  It is important to encourage people to put the money out.  But some people are just afraid.

RWM: Have you finally found something that works?

JC: No.  The bottom line is, if you aren’t making much money it’s hard to get people to play.  What we do now is pay people a salary per trip based on what we think their play is worth.  Then we pay them a share of the win when we break the bank.  It works most of the time but if you get in a situation where you’re down, the players are looking at just a salary, and that may not be enough.  It certainly isn’t enough to get them excited.

LC: The other problem is – the cool part is gone.  When we first started this was the coolest thing I ever heard of.  Even if I didn’t get paid at all I would still do it.  I would never have been able to afford what they were giving us in comps and it was like a double life.  For older people who have families, they think it’s just not worth it.   For the existing players you have to make it worth their while.

JC: One thing I think about a lot is how to structure teams, or organizations in general, so the motivations are right.  That is a really hard problem.  How do you handle R&D?  Scouting?  Training?  I like to have a philosophy to rely upon, a way of handling things so they handle themselves.  When you have a large team you have interpersonal conflicts all the time.  I want to remove that as much as possible.  I don’t want to be mediating for people who don’t like each other.  One problem you run into is spotters who will hide way in the back where the BP can’t see them. 

LC: We have players who will never call the BP in even if the count goes up.  They’re afraid of the heat.  What’s the point?

RWM: Don’t you just get rid of those players? 

JC: You can’t just fire people.  A disgruntled player can wreak havoc with you.  It’s not like a regular business where you can tell him to pack up his stuff and go home.  Disgruntled players have caused us big problems in the past.  Someone sold a list of our team members to Griffin.  Our business does not work with people who are not happy.   If you treat your employees like they are working at McDonalds you are never going to make money.  Most blackjack players are scrupulously honest and standup people.  But some people who disagree with you, and feel mistreated, are going to make you pay.  They may just quit playing or they may steal from you.  I want to avoid that as much as possible.  To the extent that I can I try to make things up front and fair. 
            I realized that I wasn’t wise to a lot of political considerations.  I think the Greeks are very good at this.  They all have worked in the real world, in law firms.  They’re the picture of political consideration.  They praise the players, and tell them how valuable and appreciated they are.  I didn’t consider that important, and it hurt me a lot.  The breakup of our group was largely because of my insensitivity to those concerns.  And it is a large part of why the MIT players are now working for the Greeks.  

RWM: How did S.I. end?

JC: S.I. ended because the guy managing it put an end to it.  He worked very hard for a year and really didn’t make much money.  It just wasn’t worth it to him to continue.

LC: After S.I. John was very disillusioned.  He wanted to start a new bank but he said everyone had to be retested, and everyone had to put some investment in the bank.

RWM: That’s better for you though.

JC: Yes, but they didn’t believe it.  I had to drag them kicking and screaming into investing.  I wanted them to feel some responsibility for their results.  One of the players sent out an email saying the main objective of the bank was to have fun.  I objected very strongly.  No man can have two masters.  If the objectives are to have fun and make money there is going to be a conflict sooner or later.  This is a business.  If we are going to do it, we are doing it to make money.  Of course I want you to have fun, but if it comes down to it I’d rather make money.

LC: I only had $2,000 to my name but I invested it.

RWM: How big was the bank.

JC: $400,000.

RWM: So you had half of one percent of the bank.

LC: Yes, but it was a lot to me.  That was all I had in my savings.  I was a poor kid just out of school.   So the new rules were, everyone had to put money in the bank, everyone had to be checked out again, and no more shuffle tracking, ace sequencing, or anything other than straight counting.

JC: I saw too much of people fooling themselves about those games.  I looked at our results on those games and found them to be near zero.

LC: We started doing just big player call-in.

RWM: What happened?

LC: We started winning like pigs.

RWM: What happened to your $2,000 investment?

LC: The first bank I made $25,000.   I don’t know how much was for playing and how much was investing.

JC: I think the MIT group was a victim of its own success.  When people weren’t making money you had to stick together.  As soon as people were making a boatload of money the attitude became, “I know how to do this.  What do we need that investor for?  I’ll just go play with my own money."  When people look at their own investment and realize that other people’s investment is hindering them, they object.  You’ll get this effect in anything you do.  When you’re playing single or double deck with a $10,000 bankroll you might double it in a few weeks.  When you try to scale it up by 10 times it doesn’t work that way anymore.  Your rate of growth is much less.  People start counting and say, “I don’t want any part of these big banks because my capital isn’t going to grow as fast.”  But absolute dollars matter.  Sure you can double your $10,000 bankroll and make good return on your investment.  I don’t remember what I made on that bank.  Laurie said $160,000.  That doesn’t happen for that player with a $10,000 bankroll.

RWM: How do you recruit people?

JC: With S.I. we just put up some posters at MIT.  That was basically it.  Then it was word of mouth.  Anybody at MIT has the intelligence and skills to learn.  It was cool enough that you don’t need to motivate them a lot.   Today, we get people that are recommended by friends.  A problem that we had with the smarter MIT folks is they’re kind of scared to put out the money.  They don’t want to get burned out.  No one does, but they seem to be more like that than others.  Also, they rarely have good acts.  That’s a problem in general with college students, being young.

RWM: Let’s talk about the famous, rigorous, testing and check out process.

LC: Our checkouts have gotten easier over the years.  When I started it was horrendous.

JC: I heard that when players of ours joined the Greeks they didn’t have to test because the Greeks said anyone who could pass our tests was good enough for them.

RWM: What was your first check out?

LC: I had to play ten shoes flawlessly. No payoff mistakes.

RWM: Payoffs?  The dealer would try to steal from you?

LC: Yes. 

JC: Initially we didn’t do the short-pay stuff.  The reason we added it was because I had a bad experience in Czechoslovakia. 

LC: The first seven shoes were without payoffs and the last three were with payoffs and color change.  The last shoe definitely has payoff errors.  You go through nine shoes perfectly and the last shoe you didn’t do it right – that is what happened to me. 

JC: So many people fail on the final round.  It’s amazing.  I think it’s because of the psychological build up of tension.

RWM: Ten shoes had to be perfect.

JC: You were allowed a few errors.

RWM: How many errors?

JC: Maybe five errors out of ten shoes. 

LC: And they would give you ridiculous units – like $225 units.

RWM: Wait, you have this $225 unit, and say the count is +3.  If you bet $700 would that be considered an error?

LC: No, you had to be off by a full unit for it to count as a betting error.

RWM: So you were allowed five betting errors in ten shoes, and five playing errors?

JC: No playing errors.  No basic strategy errors.

RWM: What if you didn’t make a play based on the index number?

LC: Index numbers were a separate checkout.  People are not required to know the numbers to checkout.

JC: We found that playing index numbers, in general, hasn’t made a difference.  In fact, some of our biggest winners didn’t play index numbers at all.

RWM: Not even insurance?

JC: Well, they knew insurance.

RWM: What about 16 against a 10?

JC:  We modified basic strategy just a little bit because they are going to play only positive shoes.  They had a +2 basic strategy.  People make mistakes when they start dealing with index numbers, and they play slower.  It can confuse their count.  The guys who won the money weren’t playing the numbers.  They were just out there betting it playing basic strategy.

RWM: I think this is going to bust a lot of the beliefs that people have about the way all this works.

JC: They think all the money is in the “secret stuff” like shuffle tracking and ace sequencing.

RWM: Right.  But you won millions of dollars just counting and playing basic strategy.  I want to go back to the test.  Is this the first test?  Or is there a written test for basic strategy first.

JC: Yeah.  The written test is drawing the basic strategy chart.  There is more than just the kitchen table checkout.  When you deal to someone you see how shaky, or not shaky, they are.  You can tell pretty quickly either they deserve to pass or they don’t.  Initially it was just counting and betting.  One time I was in the Bahamas, and I had a big stack of greens, black and purples that I colored up.  The dealer made a big mistake.  He was going to give me $34,000 when it should have been $18,000.  Instead of just taking it, I was confused and was just staring at it.  I thought, we never practice this.  I went to Paulson and bought a bunch of chips.  We made this part of the checkout.  After that I know we had various players report major color up errors on their behalf – like $10,000. 

RWM: Do you ever go in the casino and check people out at the table?

JC: That’s part of our checkout procedure.  There are various levels of checking out.  This is part of the reason we just played counting games.  I got rid of all the other games because I felt confident in our ability to play a quality shoe game.  All the other games have this judgment involved.  How good are you at estimating this?  How good are you at remembering and recording that?  There are so many ways to piss away your money in those games.

LC: Which we did.

JC: Right.  Maybe they were only playing a break-even game.

RWM: You were saying you had a test at home, and then a test in the casino.  What would that entail?

JC: Mostly it was seeing that they wouldn’t fall apart once they got in the casino.  Can they handle the attention?  Can they handle the real environment?   We made them bet it as precisely as they could.  When you’re watching and their bets are right on, you don’t have to ask them what they think the count is.  People who are good, I would ask, “How much did you buy in for and how did you do?”  That’s really peripheral, but if they could handle that along with everything else they were fine.  Some people are really intelligent and can do everything in the classroom.   You get them in a casino, and they’re looking over their shoulder at who is watching, and their hands are shaking when they put the bet out.  It’s okay to shake at the beginning, but if you look like a frightened rabbit, who is going to buy that?  We would tell them to just play some more and get more comfortable.  We tried to tell people what the casino environment is like, but it’s hard to get that in a classroom. 
RWM: How do you know if people are honest?

JC: In the past when we recruited, we didn’t have much concern about honesty.  What I looked for was, as you deal checkouts would players own up to their mistakes.  Or was there blame shifting?  You measure their character by the way they behave.  If you don’t like a guy you can give him problems.  We had people we didn’t want to pass, so we just made it impossible.  We had a couple people that I’m convinced stole money from us.  And they gave us many warning signs.  We were either too stupid to see them, or we willfully ignored them.

RWM: Did you polygraph them?

JC: No, we just stopped playing with them.  One of these guys was married but was always carrying on with other women.  That rubbed me the wrong way. 

RWM: If he’ll cheat on his wife, why wouldn’t he cheat you?

JC: Right. 

RWM: Do you have spotters go in to watch the BP?

JC: Occasionally, but we don’t really have the manpower to do that all the time.

RWM: Tommy’s team has a rule against playing any hand-held games.

JC: Yes, I spoke to him about that.  His attitude is that they are not good enough to tell if they are getting cheated.  If they’re not good enough… we’re all part timers.

RWM: Did you guys have a similar rule?

JC: Yeah.  There are also problems with those games because of the cut card effect and preferential shuffling.  One thing about the MIT group – it’s very mechanical in its approach.  People are trained to do something.  We have high standards for performance, and we check people out with those standards.  We have removed as much judgment from the play as possible.   We found that when you put judgment into it, it becomes a slippery slope.  People start tipping, and it may be perfectly justified, but then you get someone who lacks proper judgment and they piss away the money.  It seemed to work better when we said, no tipping unless it’s out of your own pocket.  We’ve changed and allow tipping now.
            With ace sequencing, you get the ace or you don’t.  But then you get people who wreck their hands in order to catch the ace.  The last card comes out that they believe is in front of the ace and suddenly they take no more hits.  So a player stands on hard seven.  So I’m giving up 30% on a $100 bet.  Some people will do that.  They don’t have any judgment about how much the hand is worth or how much heat might come down.  They just do what they think they ought to do.  But their conversion rate might be horrible.  You might fool yourself on the sequence.  Was it seven of diamonds and eight of hearts?  Or was it seven of hearts and the eight of diamonds?   Once you start to be unsure about the cards the possibilities explode and you can be betting into nothing.
            We had a small group of people on the west coast who were trained just to count cards.  We had one experienced player out here and she recruited a bunch of people, mostly from JPL.  She taught them to count, the MIT way.  Back east we had a lot of people who had been counting for a long time.  Many of them were already burned out and were looking for other methods of play that might avoid some heat.  Shuffle tracking was something that we had done for many years, but the casinos had made the shuffles more complicated.  Our success with those shuffles was mixed.  We never did much analysis on error rates.  There are many ways you can make errors and how much does that cost you?  Boundary errors are really important when you’re dealing with packets that are very small.  If your eyeballing skills aren’t as good as they could be, you have other problems.  The east coast people were doing this shuffle tracking and ace sequencing.  We had various methods of putting a value on these games.   Our success with these so-called “advanced games” was very mixed. 

RWM: Do you go out on the road much?

JC: Nah.  I’ve played in Mississippi and near Chicago. 

RWM: Let’s talk about disguises.

JC: Disguises are a last resort.  We don’t use them much.  I’ve tried them occasionally but it’s like a big joke.

RWM: Your Griffin and Biometrica pages have pictures of you dressed as a woman.  How did that happen?

JC: The first time was in the Bahamas.  My teammates said they wouldn’t let me play unless I had a disguise.  What kind of disguise could I have?  I can’t grow facial hair.  I did try a fake beard and mustache once.  I had this big bushy wig and huge beard.  My head was enormous, and I’m skinny anyway.  Customers who were playing just looked at me and laughed.  So one of my teammates said I should try being a woman.  My former girlfriend was on the trip, and she’s 5’ 10”.   She had stuff I could wear.  She made me up and gave me a hat, dress, pantyhose.  The other players said it looked good but they were all laughing.  I played like that but nobody said anything.  The casino people were totally oblivious.

RWM: You tried this again in Atlantic City.

JC: Yes, but this time I had a new girlfriend, and she wasn’t as skilled at making me into a woman.  She did have a wig for me, but the problem with the wig is it adds to my height, and I think I was wearing heels.  So I became this six-foot tall Asian woman.  There aren’t any six-foot Asian women!   When I was sitting it was okay, but as soon as I stood up people were like, “Whoa.”  I was in the Taj, and this got written up in the Washington Post.  It just happened that an Asian woman sat down next to me.  She’s all petite, and I look at her hands, and they’re just tiny.  Then I look at my hands next to hers and I thought, “Ooo, not good.”  I took my hands off the table.  It tuned out that when I was noticing this, surveillance was noticing the same thing, and they just busted up laughing. 

RWM: How did this end up in the Washington Post?

JC: They sent out a reporter to do an article, the thrust of which was that casinos bring scam artists and lowlifes to the community.  I ended up being the lead into this long feature piece in the Style section.  The reporter talked to the surveillance people at the Taj.  They showed him the pictures of me.  I think the first phrase of the article was something like, “striking from a distance,” depicting this elegant Asian woman playing at the high limit tables.  Then they cut to the surveillance guys who are laughing and they say I’m Johnny C., an infamous card counter.   The tone and context were really smarmy, but the article was pretty accurate so I couldn’t really say it was libel.
            It must be such a mundane existence in casinos, because when surveillance finds us, it’s the most exciting thing for them.  It makes their day, if not their week or month. 

RWM: Have you played much out of the country?

JC: I played in England, Austria, Czechoslovakia, Hungary, France, and the Caribbean.

RWM: Do any of them stick out as particularly good or bad experiences?

JC: Austria has the worst games.  I was cheated in Prague. 

RWM: How did they cheat?

JC: They short shoed me. A French guy owned the casino.  When I told other people about it they said, “Yeah, that’s pretty classic.”  After this happened I was in Gambler’s Book Club in Las Vegas and I was reading some pamphlet by Ken Uston.  It said, when you’re in France be careful of the small casinos because they short shoe you.   [A short shoe is one in which tens and aces have been removed.  This gives the casino a higher edge.]

RWM: How long ago was this?

JC: Maybe five years ago.

RWM: What did you do?

JC: I was kind of stupid.  I went to this casino and the limits were higher than the other places.  The other places had maybe $100 limits and this place had $500 or $1,000 limits.   We played a bit and broke even.  The casino offered us a dinner comp so we went to eat.  After dinner there was an empty table.  The casino manager said, “This table is just for you.  What limit would you like?”  I only had about $50,000 with me so I figured $2,000 was good enough.  The shuffle was very easy.  I start playing and the count goes up and up and up.  At the end of the shoe it was +15.  I tracked that and cut it to the front.  The count didn’t go down.  At the end of that shoe it was +15 again.  Now I’m suspicious.  I do the same thing but I’m not going to bet it.  By the end of the third shoe I said, “I want to see those cards.”  It sort of surprised me, but the casino manager said, “Oh sure.  No problem.  We have to take the cards over to the table in the back because we don’t want to prevent other customers from playing.”  He grabbed the cards and turned his back to me, and started walking to the other table.  I saw him furtively reaching into his coat pocket and pulling out the cards to add to the shoe.  I yelled, “I want to see those cards on top.”  I started grabbing them and he yelled, “Don’t touch the cards.”   He put them down on the baccarat table and washed them.  The guy was very shaky afterwards.  I should have said, “I want my money back.”  I didn’t ask him. 

RWM:  How much did they get you for?

JC: About $15,000.  I knew I could beat this game.  Or, at least I thought I could.  So I continued to play once all the cards were in the shoe.  Well, then they were completely ruthless with the payoffs.  I caught a ton of mistakes, and they were always against me, even on obvious hands.  I just didn’t realize it at first.  After two or three days of this it finally dawned on me, they were just ripping me off every chance they got.  If you try to play against someone who is ripping you off on the payoffs you can’t win.  Especially if you try to have some kind of act.  I finally got it when I caught about the 15th error in a session.  I said, “You mispaid the bet.  What is going on?”  The dealer said, “You should be careful.”

RWM: What was the total loss at the end of all this?

JC: $40,000.

RWM: That was an expensive lesson.

JC: It’s a hard lesson to learn, and I’m not sure I’ve learned it.  Sure, if the dealer is always ripping you off, and there is never a mistake in your favor, then you can be pretty damn sure what is going on. 

RWM: Does being in Griffin affect you in foreign casinos?

JC: Being in Griffin scares me when playing overseas.  If the casino has that information, and gives it to law enforcement, they see those pictures and those kinds of descriptions of blackjack players.  Their English may not be that good.  They just decide we must be criminals and deserve to be treated as such.  In a third world country being treated as such is pretty brutal.  We had $62,000 stolen by the Bahamian police. 

RWM: How did that happen?

JC: One of our players went down there with $50,000, and he won $12,000.  The casino found him in Griffin and they wanted their money back or they would have him thrown in jail.  He said he had won the money fair and square.  They called the Bahamian police.  The police said that card counting was illegal, and they didn’t appreciate foreigners coming there and taking advantage of their poor casinos.  So they threw him in jail, which was like a dungeon.  There were rats running around, and he was in there with his wife.  The police told the casino manager, “We’ll sweat it out of them.”  After three days our player said, “Okay, we give up.”  At that point the police realized they could just keep their bankroll as well.  So they kept the entire $62,000.   We paid some Bahamian lawyer to get it back.  This happened seven years ago.  The last thing I heard was we won a judgment against the casino but we can’t collect it.  This was at the Marriott.

RWM: There was a recent article in Wired about the MIT team.  [This article is an excerpt from the book, Bringing Down the House, by Ben Mezrich.]  The article talks about a player taking $250,000 on a plane to Vegas.  When you were going from Boston to Vegas, how much cash would you take on the airplane?

JC: Typically it would be $100,000.  There may have been situations where someone took a quarter million or more.  Especially coming back from Vegas.  We had one player bring over a million dollars back from Vegas on one trip. 

RWM: How did he carry it?

JC: Just packed it in bricks, put it in his carry-on, and brought it home.  It’s about the size of a pillow.  When it went through the xray I guess they didn’t think it was money.  Not when it’s that big.  Early on we did have problems going through airport security with cash.  They would open a bag and it was an amount of money that would scare a lot of people.  They would call the airport police, or the state police, and you have a plane to catch. 

RWM: Did you have any money confiscated?

JC: Sort of, but not really.  I was going out to the west coast and had $300,000 on me.  I was traveling with this girl who had no experience, but she was supremely confident.  I was in a hurry and I asked her to carry twenty or forty thousand.  It wasn’t much but I had so much that I just couldn’t fit it.  I went through airport security with no problem.   She got pulled aside.  She had put the money in a money belt that had metal in it.  They found the money and they asked her to explain it.  She was a college student.  She started lying and said her grandfather gave it to her for tuition.  It rang false, so the state police came in and they called the DEA.  I’m watching this but I didn’t have a place to put my stuff and I had all this money on me.  I called the team and asked them to call the lawyers.  Then I went back and said, “What’s the problem?”  After I told the trooper I was with her, he wanted to search my luggage again.  There was no money in the bags, but I said, “I think I want a lawyer.”  As soon as I said that, I was immediately guilty.  He confiscated my bags.  Our lawyer said this happens frequently.  They confiscate your stuff and don’t prosecute you for anything; they just keep it.  I think that is really corrupt.  It makes the DEA and other people that do this as bad as the criminals themselves.  Anyway, the lawyers showed up within twenty minutes.  They told them we were just blackjack players.  It’s so hard for them to believe.  How do you prove what you’re telling them?

RWM: What do you do now?  Since 9/11 things have gotten much worse.

JC: We don’t carry as much because our bank is smaller.  Also, our players are older so it’s more believable that they would have a significant amount of money.   I talked to one player I know who says he never has any problems.  But, he has that kind of money, and he looks like he’s wealthy.  He goes through airport security with his Rolex watch and Halliburton briefcase with $80,000 in it.  They look at it and say, “No problem.”  He just looks like a high roller. 

RWM: Does it help to carry chips?

JC: It helps, but it’s not going to exonerate or absolve you if they don’t like the way you look.   Our first incident was exactly that situation.  Someone had $80,000 in chips and cash in a paper bag.   Security called the police.  We happened to have an assistant DA with us.  She was the girlfriend of one of the players.  She spoke to the police and showed her ID so they let us go.  She was later reprimanded for undue use of her authority, and there was an investigation into the incident.

RWM: Dealing with these large amounts of cash, do you ever misplace it or lose it?

JC: The guy who originally trained me left $125,000 in a classroom at MIT.  He was training all these people, maybe 40 players.  They would all meet in this classroom to do checkouts and practices and he’d give players money to take on trips.  He just left the money in the classroom.  The janitor found it and gave it to MIT.   They suddenly got very lawyerly.  “How do we know the money is your, and what’s it doing in our classroom?”  They started calling the three letter agencies.  We got the money back fairly cheaply.  I think it cost three or four thousand for the lawyers. 

LC: I have a story about that. When John was going to move to California I went back to help him pack and clean out his apartment.  The first night I was sitting at his cluttered desk.  On the desk was a jar.  I opened it up and saw a bunch of chips.  I said, “Oh, this is where you keep your chips.”  He said, “What, I have chips there?”  I pulled it out and it was $6,000.  I thought this was a fluke.  Then I was cleaning out the closet and I saw a dirty, old, fanny pack in the corner.  I was going to throw it out, but I opened it first and found $20,000 in traveler’s checks.   I said, “John, you have $20,000 in traveler’s checks here.”  He said, “I do?”   Next, there were all these boxes full of junk.  I told him we should go through the boxes and throw out the stuff he didn’t need rather than shipping them to California.  He started going through the boxes and found an envelope.  He ran out and hugged me and said, “Please, please, don’t tell anybody.  This is bad even for me.”  I sad, “What is it?”  It was $120,000 in traveler’s checks.  I have never met anyone like this.  I said, “Are you insane?”   He said, “You aren’t going to find any more.  This is it for sure.”  The last day I opened a big box and found $16,000 or $18,000 in Atlantic City chips.  Over the course of two weeks I found $165,000 that he didn’t know he had.  He said he had a slight feeling he was a little short.

JC: I had another incident.  I had finally moved to a nice apartment after living in these student hovels for years.  I went on a trip to Vegas for two weeks.  While I was gone the hose to my washer exploded and flooded my apartment.  The water started going into the units beneath mine.  The woman downstairs called the fire department, and they couldn’t get in my unit so they called the police.  The police broke in.  I had a green felt on my kitchen table with chips and cards.  They turned off the water, and I guess they started looking around.  In my bedroom they found a bunch of fake IDs I had made.  Why were the police in my bedroom?  If you read the police report it said they were attempting to locate the owner to inform him of the situation.   I don’t believe any of it, but how can I prove it.  Then they found $100,000.

RWM: You didn’t worry about leaving $100,000 in cash in you apartment while being gone for two weeks?

JC: It didn’t have a doorman but it was a nice building.  I wasn’t concerned.  So the police ransacked my place.  They threw everything off the shelves and emptied all the drawers.  I got home about five days later.  The door was padlocked and I could see the mess through a hole in the door.  When the neighbor across the hall told me there were ten cops in my apartment, I knew they had found the money, so I called up the lawyers.  They told me not to stay there and they said they would call the police in the morning and let them know that I would go turn myself in.  I went to the station and got fingerprinted and photographed.  They charged me with having the fake IDs.  They were investigating whether I was involved in some Asian gang.  I was asking about my fourth amendment rights.  The lawyers said that basically they don’t exist anymore.  Eventually I got my money back and it cost $10,000 for the lawyers. 

RWM: Has 9/11 caused big problems for blackjack players?

JC: It certainly seems like it should, but I haven’t heard of any specific incidents.  People seem to be taking more precautions to avoid trouble.   I saw John Ashcroft on CNN saying he wanted to make transporting $10,000 a felony.  He may not get that but it’s on the horizon.  That’s pretty scary.  

RWM: Have you been physically abused in the casinos?

JC: The casinos can kind of do whatever they want.  In Atlantic City they are more regulated so they feel more constrained about doing things.  In Las Vegas, the Venetian, in particular, is filled with Atlantic City people who have had these constraints removed.    I think they have gone overboard in incidents that happened to Laurie and others.  Laurie was handcuffed and dragged in the back room.  There really is no need.  All they have to do is say they don’t want us to play.   I suppose there are some people who will put up an argument but if someone tells me they know who I am I leave.  In the Rio I was playing and they recognized me.  Some boss backed me off.  I was like, “Okay I’m leaving.”  He had some mad-dog security guard with him who looked like Wilford Brimley.  I didn’t see him, I guess because he was so short.  He grabbed me by the arm and I just started to walk away.  The next thing I know the little security guard attacks me and throws me up against the wall.  I was just shocked.  He started ranting that I was guilty.

RWM: Guilty of what?

JC: He just said, “You’re guilty, guilty as hell.”  He pushed me around and threatened me.  He said, “If I see you again you won’t have a face.”  Something like that.  Then he told me to leave, which is what I was trying to do when he grabbed me.

RWM: Did you contact a lawyer?

JC: I called a couple lawyers but they said they would look into it for a retainer but weren’t interested in handling it on a contingency basis.  I didn’t call Gaming because my experience with Gaming is that they treat you like a criminal.  At any major casino the agents suck up to the executives when they show up.  And you?  Who are you?  I want to see your ID, I want this, I want that, are you in the book?

RWM: You called gaming in the past?

JC: The main experience I had with Gaming was when I had $91,000 in Dunes chips I wanted to cash out.  The Dunes wouldn’t cash them so I called Gaming.   They weren’t nasty really but it was such a pain in the ass.  They wanted to know who I was, and all kinds of information about me, as if that mattered.  I can see if the chips were stolen but the Dunes hadn’t had a theft.  They just refused to cash them because they were harassing me. 

RWM: Two of the very high profile court cases of blackjack players were people on your team.  The case at the Monte Carlo was a good result, but the case at Caesars was quite a terrible result. 

JC: The Caesars result I think is why we can’t get adequate legal representation.  The lawyers see that we had a slam dunk case and got an award of $10,000.  They don’t want those cases. 

RWM: Do you think this was bad lawyering, or the Nevada courts system that did you in?

JC: I don’t know.  I wasn’t there, and I haven’t seen the court transcripts.  My guess is our lawyer represented our player as this poor medical student who was making money playing for this group and he deserved something for his abuse.  How much is $10,000 for a student?  Maybe the jury thought that was a good amount.  I think they were ignorant of what a reasonable damage award might be.  What is an appropriate award?  In this case, Caesars makes half a million dollars a day, every day.  Is it unreasonable to take one day’s pay from them?  If you beat up someone wouldn’t you deserve to be thrown in jail for a day and lose one day’s pay?  If the award had been half a million dollars all the lawyers would be jumping on the bandwagon to represent us.  And the casinos wouldn’t be so cavalier about mistreating us.

RWM: Have you branched out to other games?

JC: I’ve played some other games a bit and made small amounts of money, but I haven’t really exploited anything the way I should.  I feel disappointed about that.  When players split off because they wanted their own money to grow faster, I felt they were very short sighted.  In any business you shoot for having more money so you can grow.  In blackjack your bankroll gets too big and you can’t really use it.  It doesn’t mean you can’t use it to branch into other things.  For example, CORE [another team] went into banking in California.  If you start out with a million-dollar bank and make it grow you can end up with tens of millions.  I think we really passed up that kind of opportunity.  We could have gone into many things.  We certainly had the brains and talent to investigate these other things.  But our selfishness stopped us.  Also, in academia, people always attack the new idea, that which hasn’t been done before.  It might be intellectually rigorous, but it certainly isn’t enterprising.  One thing I really feel we should have done when we made a lot of money was earmark some of it for research and development.  I argued for that, but people felt I was trying to take money out of their pockets.  Then we had some bad experiences with it.  We did earmark a small amount of money for some things, but it was poorly managed, and we ended up spending money on stuff that was useless. 
            I went to a blackjack friend’s wedding and it was a big eye-opener.  I talked to people who had made tons of money doing other things.  These are guys who have made tens and hundreds of millions. 

RWM: Do you still have this desire to have a big team out there, rather than going on trips with three or four of you?

JC:  Right now I don’t feel a big team is appropriate.  But playing with a few people, though amusing, certainly isn’t the big time.  Instead I’d like to get involved in some other games with more potential.
RWM: What would you say to the guy out there in Peoria who has studied the books, learned to count cards, and wants to become a professional blackjack player.

JC: I would not be very optimistic about it.  You can make some money, but making it a profession is tough.  Most of the players who are successful had initial success.  They were lucky. 

RWM: You mean they caught a good fluctuation when they first started?

JC: Yes.  Then they got better and adapted.  If you have enough good experience behind you, then you can withstand the bad stuff. There are a lot of attractive aspects to playing if you’re betting enough to get comped.  Even if you don’t get comped blackjack is a cool thing to do.  You set your own hours.  You are your own boss.  I think most people don’t analyze how much their game is worth.  It’s hard because the parameters aren’t known until you check out your own specific situation.  You might run simulations and find out you expect to earn $20 an hour.  If you’re a student that might be attractive, but you have fluctuations.  $20 an hour is probably $10 on a sure thing. Also, simulations give you the numbers if you don’t make any mistakes.  People who are just starting are going to make mistakes.  In The Color of Money, Paul Newman says, “Money won is twice as sweet as money earned.”  That has to be true.

RWM: What would you tell that person to do?

JC: He should try to team up with other players. 

LC: Being part of a blackjack team taught me a lot of things.  It’s like a small corporation and when I got to business school I realized I had learned a lot.  For someone fresh out of college this can be a great experience.

JC: There is a lot of stuff in blackjack that is useful in other aspects of your life.  Analyzing a game and then putting out the money requires brains and courage.  Running a team requires presence and an ability to deal with people.  Withstanding negative fluctuations requires confidence and perseverance.  I know quite a number of wealthy people who used to play blackjack.

RWM: What gave you the idea to analyze Pai Gow?

JC: I went to UNLV and was looking at papers in their special collection on gambling.  I found an analysis by John Gwynn on Pai Gow.  Then I verified it and came up with a strategy to beat it.  It’s a very complicated strategy, ten times harder than basic strategy for blackjack.  It’s not obvious because the tiles have funny rankings.  You would never be able to come up with it from first principles.  I came up with a strategy, and then found out that a former teammate, who was then at Microsoft, had come up with a set or rules for that strategy.  I called him and told him my idea.  He had written a program that would test you on the optimal strategy.  If you can play 500 hands without making a mistake, you’re good enough to play.  I spent a couple weeks at his place, and then I played 500 or 700 hands without a mistake.  I thought I was good enough.  Well, yes and no.  I was good enough to set the hands, but not good enough to check the payoffs.  The dealers flip the tiles and pay or take really fast.  It’s hard to tell if you won or lost.  I was playing and doing okay, but I didn’t enjoy the environment.  I was looking for any excuse not to play.  Then I ran into a buzz saw at a card room near San Francisco.  I was losing pretty big and finally won a hand.  I didn’t tip the dealer since I was still losing a lot.  After that I think they ripped me off every chance they could.  If I won they just didn’t pay me.  On one round I thought I won and they didn’t pay me and I sort of meekly objected.  After that they all started betting it up on me.  I lost $20,000 and decided I wasn’t good enough to catch the cheating, and I didn’t enjoy playing so I gave it up.

RWM: What books do you take with you on a blackjack trip?

JC:  I take the International Casino Guide or the American Casino Guide depending on whether I’m traveling overseas or in the U.S.  Tommy Hyland turned me onto that. I was in the Huntington Press offices and talking to Tommy on my cell phone and he said, “Hey, can you pick me up a copy of the American Casino Guide?”  I picked it up and said, “I better get one of these for me too.”  I take Basic Blackjack, because it covers most weird rules you might run into, and I take Beyond Counting.

RWM: What do your parents think of your profession?

JC: My mom wants me to buy a Radio Shack.  Whenever we go in one she says, “You should own one of these stores.  You know so much about all this stuff.”

LC:  His mother has a masters in chemical engineering and his dad is a PhD in chemical engineering.  His brother and sister both have doctorates.   His parents don’t understand why he plays. 

RWM: So you’re the black sheep of the family.

JC: That’s right. My sister went to Stanford and Harvard and she’s an orthodontist.  When she was a student she wanted to be an orthodontist, ophthalmologist, or endocrinologist, because they didn’t have major emergencies and have to show up at two in the morning.   Now…

LC: His dad visited her and said, “Oh, she has such a hard life.  She owns her own clinic, she has to do the books and deal with the personalities.  She has two kids.  It’s a very tough life.  You and John have it so easy.”   I said, “Dad, that’s the point.  John has plenty of money, he spends a lot of time with our son, and he has the respect of his peers.  We have a great life.”

RWM: Any last thoughts?

JC: One thing I think I'd like to add is what kind of threat the MIT team really is to the casinos. Despite our vaunted reputation, we really haven't taken that much money out. A little more than $10 million is my guess. That might sound like a lot but considering the amount of time [over 20 years] and number of people it's not particularly impressive. Over the years, the average yearly income of a blackjack player from our group has been $25,000.  Granted, it's part time work, but it's not that profitable really. There have got to be a hundred other things casinos spend more money on. Measured from a cost/benefit standpoint, their countermeasures are ridiculous. They probably spend 10 times as much money to stop us compared to what they'd ever lose.
Here's an analogy. The casinos buy a two-foot thick metal door to protect their house, when all we do is check to see whether the door is locked. If we're really desperate we check for open windows, but we've gotten hurt in the past trying to climb in, so we tend to avoid them. It seems they think we're super ninjas who can walk off with all their money. Even the best of us are far from that.
If some enlightened casino executive were to look upon us as an advertising opportunity instead of some evil group of criminals, I'm sure the casino would be better off. The most profitable casinos take our action the best.  Why don't they trumpet big wins at blackjack from players they think are winners?  They'd probably get back ten times as much from the civilians who want to repeat that.  This is the reason blackjack became so popular to begin with. In general casinos that spend a lot of money on card counter catchers just drive away the legitimate suckers.  Players feel the paranoia and suspicion and take a hike. In the end by being afraid of the .1% of players who can beat them, they scare away most of the big money.

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