NARRATOR (JOHN SIMM): This is the story of how a group of gamblers fleeced the casinos for millions.
ANTHONY CURTIS: The buzz for me was the potential, it was unlimited, and I could make money without punching a clock. I could have a tonne of fun, certainly women were going to love me and it was great.
SEMYON DUKACH: I was excited about the idea of going against this big establishment, this David & Goliath kind of situation. And beating them, and for them not even realising that we're beating them.
NARRATOR: But these were no ordinary gamblers, they were brilliant students with an extraordinary secret that meant they simply couldn't lose. Their secret would draw them in to the world of mobsters and underground societies, hidden gadgets and high tech surveillance.
BEVERLEY GRIFFIN: I think it started as a lark, and then it got really serious when they started winning some serious amounts of money, and then it got to be a threat.
NARRATOR: At the heart of this story was a beautiful mathematical formula, one so perfect it was guaranteed to make them millions.
NARRATOR: On the 23 May 1995, three well dressed twenty somethings entered an exclusive casino in Monaco. They headed straight for the Blackjack tables.
KATIE LILIENKAMP: We kind of picked one that looked like it was reasonable, it looked like the dealer shuffled in a reasonable way and held the cards in a reasonable way for us to be able to play.
ANDY BLOCH: I got a lot of money, so I was pulling out the money, I was betting you know whatever we could bet, a couple of thousand per hand. I think I ended up winning about like twenty one thousand, or twenty seven thousand on that round.
NARRATOR: In just under an hour they'd won one hundred and fifty thousand dollars.
SEMYON DUKACH: We bet and we played, it was a lot of fun, I ended up winning a lot, which was great.
NARRATOR: It was easy money and it was clear they were going to make millions, because this was more than a lucky streak. They were brilliant young scientists and that night was the culmination of a forty year search for the perfect gambling formula.
The idea of the perfect formula began with a Vegas legend. In the early 1950s a man known as Greasy John played a card game called Blackjack. He got his nickname from never being without a huge basket of fried chicken. He was so repellent no one could bare to share his table. He played for hours on end, just him against the dealer, and night after night he'd win. Clearly he had a system, but no one could work out what it was. Then at the height of his success Greasy John suffered a massive heart attack. Whatever his secret was he took it to the grave. Greasy John's story entered gambling folk lore, whoever could crack his strategy would have the key to enormous wealth.
In 1959 Edward Thorp was an exceptional young scientist, about to join the world renowned Massachusetts Institute of Technology. He excelled in Physics, Chemistry and anything to do with Mathematics.
Dr EDWARD THORP: The way I, I got interested in Blackjack was an accident, you might say purely by chance. It happened one Christmas, I was going with my wife to Las Vegas for a low cost fun vacation, but I wasn't planning to gamble because I knew that, that was a loser for almost everybody.
NARRATOR: Purely as an academic exercise, Thorp decided to try his hand at Blackjack. But he didn't want to hit the tables unprepared. So he turned to the scientific journals, and hidden within an obscure publication Thorp found a mathematical paper that was the very first to outline a Blackjack strategy.
Dr EDWARD THORP: And it showed that you could lose at the rate of only six tenths of a percent in the long run. So I said well, I'll risk ten dollars on this and have some fun.
NARRATOR: This primitive strategy did not offer a way of winning, it merely gave the player a set of simple rules to prevent them from losing so quickly. But Thorp thought he could do better, because he'd realised there was something special about Blackjack. The odds of winning worked in a different way to almost every other gambling game. In terms of mathematical probability gambling games work in one of two ways, in Russian Roulette a bullet is loaded in to a barrel of six chambers. Every time the barrel is spun, there is a one in six chance of firing the bullet.
Dr KEITH DEVLIN: When you're playing Russian Roulette, if you spin the chamber before you pull the trigger every time, then each pull of the trigger is an independent event, the gun has no memory, spinning the chamber destroys all memory of what's happened before.
NARRATOR: In other words, spin the barrel every time and the probability of firing the bullet never changes. It's always one in six. But there's another way of playing Russian Roulette, when you don't spin the barrel between shots, but just keep on pulling the trigger.
Dr KEITH DEVLIN: If it doesn't go off and you pull the trigger again, the second pull of the trigger is not an independent event, because the odds have changed of you getting an explosion.
NARRATOR: Each time the trigger is pulled the probability of firing the bullet rises. Initially from one in six, right down to a dead cert. The odds change because they are dependent on what has happened on the previous pull of the trigger. What Ed Thorp realised was this dependence is exactly what happens in a game of Blackjack, and it's because of how the cards must be dealt. In casino Blackjack, you have to beat the dealer, and a winning hand is the one which is closest to the value of twenty-one as possible. But if you go above twenty-one you lose, or bust. Critically in most casino games, after each round the cards are always returned to the deck, so they can be played in the next hand. But in Blackjack used cards are not returned, but set aside. This means the odds of getting winning cards change as the game progresses. Because the deck is made up of fewer and fewer cards for every hand.
Dr KEITH DEVLIN: The thing that makes Blackjack different is each hand is not an independent event, the cards actually do have a memory of the previous hands, and a good player can also have a memory of those previous hands.
NARRATOR: Back at M.I.T. Ed Thorp realised he could use the fact the odds change with every hand to his advantage. And improve upon the very basic strategy he'd found in the scientific journal.
Dr EDWARD THORP: So I went back to the article that I had used the strategy from, and began to read, and in about a minute or two I saw that there was an idea from mathematics that would almost certainly work.
NARRATOR: Thorp's idea was to calculate how removing certain cards from the deck affected the odds of winning. Pretty soon he uncovered something significant. In terms of manipulating the odds of winning, some cards were more important than others. And it was because of a critical rule of Blackjack. During a game a player could stick, that is refuse to draw further cards whatever the current value of their hand. So a player with a hand of fifteen could stick to reduce their chances of going bust. But the rules said the dealer could not stick until their hand reached at least seventeen. So if a player had stuck at fifteen and the dealer had sixteen, the dealer would be forced to draw again, and risk getting a high value card to bust and lose. So if there were more high value cards than low value cards still in the deck, then the dealer was more likely to go bust, and the advantage would swing toward the player. Thorp realised that if he could somehow keep track of how many of these beneficial high value cards were still in the deck, then he could develop a strategy for winning at Blackjack.
Dr EDWARD THORP: It was a real rush because I knew that I had found something that nobody believed was possible. The whole thing was really exciting, probably the most satisfying thing was I knew something that nobody had known before.
NARRATOR: The strategy Thorp outlined was beautifully simple. He felt memorising the exact value of every card would be far too difficult, so he developed a strategy that relied on approximations and the very simplest mental arithmetic. First Thorp divided the cards in to three groups, then he assigned each group an averaged value. He gave the twos through to the sixes a value of plus one, because removing these cards from the deck was good for the player. He gave sevens, eights and nines a value of zero, but to the tens, aces and face cards he gave a value of minus one, because removing these cards was bad for the player, because without them in the deck the dealer was less likely to go bust. The system was named the High Low count.
ANTHONY CURTIS: So let's just take some cards off the top of the deck, and we'll identify them as either good cards for us or bad cards. First off the top of the deck is a queen, that's a ten value card, we would like that to be in the deck but it's now out, so we assign a negative value to this, often it's negative one. Next card, five, that just happens to be the best card for the dealer, this is now out of the pack so we assign a positive one to that. Next card king, negative one. Four, that's a positive one. Nine, this is actually a neutral card, so we go on and on through the pack, giving positive and negatives.
NARRATOR: Using the High Low count system a player would simply keep a running total of the value of the cards that had been played, adding or subtracting one, every time a card was revealed. When the High Low count was a negative value the deck favoured the casino considerably. When the count reached zero the casino had a marginal advantage. But when the count became positive the deck swung in the player's favour.
ANTHONY CURTIS: So it would look something like this, minus one, even. Minus one, I'm adding and subtracting. Even, plus one, plus two, plus three. At this point we might make a bet with a high running count of plus three, although it's early in the pack.
NARRATOR: Simply by keeping track of a single number a player could predict when the deck turned in their favour. They could then put out a huge bet and wipe out the casino. What was remarkable about Thorp's strategy was that even though it was beautifully simple its effect was dramatic. It flipped the advantage from around five percent in favour of the casinos to one percent in favour of the player. Now and for the very first time since the days of Greasy John a player might have a chance of winning big money. But the system only worked on paper. Thorp had to test it in a casino for real. The penniless academic needed a big money backer. News that a mathematician with a winning formula needed help to make millions filtered through the gambling underworld all the way to the mob.
Dr EDWARD THORP: They wanted to put up a hundred thousand dollars to bankroll this. What I elected to do is only take a ten thousand dollar bankroll, I thought that that's all I needed and if anything happened it wouldn't seem like so much money to them so I wouldn't have any serious problems afterwards.
NARRATOR: So in the spring of 1961, bankrolled by hoodlums, Thorp embarked upon the first field trial of his new strategy. Despite the mob's demands for bigger bets and quicker profits, Thorp kept his cool. And stuck rigidly to his strategy. Over three days and three nights without rest Thorp more than doubled the mob's money, turning their ten thousand dollars in to over twenty one thousand. There was no doubt about it, his strategy worked. Thorp released his winning card counting strategy on the world in a book. It was an instant success.
ANTHONY CURTIS: To people in the business Ed Thorp is the Godfather. He brought to light the possibility to defeat this game, and it was out there but nobody had really told the masses, so er, so Ed was the man, no doubt.
NARRATOR: The casinos began to lose millions, something had to be done to stop what became known as the card counters, and fast. They began phase one of an arms race that has gone on ever since.
ANTHONY CURTIS: When they felt there was a problem to be dealt with they implemented their own countermeasures. And those countermeasures would run the gambit all the way from the worse countermeasure was to take the guy in the back and beat him senseless, so that, you know that worked real well for a while. But they couldn't really do that, so they resorted to other things.
NARRATOR: First the casinos tried changing the rules. The card counting system relied on not reusing cards already played. Shuffling used cards back in to the deck simply killed the count. So weapon number one was to shuffle whenever the casino wanted.
ANTHONY CURTIS: They would just wait until the counter put out the big bet, and they would shuffle. But if they'd see a big bet come out, they figured that the counter wants that deck dealt, and they don't oblige, they shuffle it away.
NARRATOR: The shuffling worked. But it worked a little too well. Continual shuffling took time, and most gamblers lost interest and left the tables. After only six weeks the casino bosses were forced to withdraw the shuffle. They were back to square one. So they tried a new tack, what might be harder than counting with a single deck of fifty-two cards? Counting with over four hundred cards. Weapon number two was the Professor Stopper, a huge card shoe designed to hold over eight decks.
ANTHONY CURTIS: So they began increasing the number of decks, you know going from one to, I don't know if two decks got in there at some point, but then four decks, and six decks, and eight decks, and you know on and on and on, thinking that that would thwart the player.
NARRATOR: But the casinos had misunderstood the Thorp formula. And underestimated the counters. It was just as easy to perform the High Low count with multiple decks as it was with a single deck. A counter could still win big, it just took a little longer for the card shoe to become favourable. So, despite the Professor Stoppers, the counters continued to fleece the casinos. And then, at last, the casinos got clever. They decided to set a thief to catch a thief, and taught their dealers to count cards the Thorp way.
ANTHONY CURTIS: They eventually got to the point where they started saying well, let's just, let's beat them at their own game, let's find them. Dealers in certain places would be taught to actually recognise the moves of a card counter. Sometimes in a casino you'll see a boss walk up, grab the disc cards, and start fanning to the disc cards, well he's conducting a quick count of the cards, to say ok is it positive or negative, and is that why you've just raised your bet.
NARRATOR: Once the casino dealers could count cards themselves they could easily identify a counter by their telltale behaviour pattern. Card counting took concentration, and it often showed up in a player's intense expression. Once identified the casino would simply show the counters the door. It seemed they had at last found a way to crush card counting. But then the counters began to fight back, in a completely different way.
In 1969 Keith Taft, an engineer, was the type of card counter the casinos loved. He'd read the strategy books, he'd practiced obsessively, day and night, yet he always lost.
KEITH TAFT: So I borrowed I think three thousand dollars, went to Las Vegas, and I was betting fifty, seventy five dollars a hand, and seemed like losing almost every hand.
NARRATOR: Taft was one of those who just couldn't count cards and fool the dealer at the same time, because trying to act natural made him lose the count. What he needed was a way of making the counting so effortless that he could be free to concentrate solely on getting away with it. And then it dawned on him, he would build a machine to do the counting for him. A Blackjack computer.
KEITH TAFT: I felt I had a well enough rounded knowledge that I at least could investigate and find the missing pieces, I needed to go ahead and come up with some computing, computing machinery that would beat the casino.
NARRATOR: To help him realise his dream he recruited his son, Marty.
MARTY TAFT: Hi dad.
KEITH TAFT: Hello son, good to see you.
MARTY TAFT: Good to see you.
KEITH TAFT: How are things?
MARTY TAFT: Very good.
NARRATOR: Bringing down the casinos was going to be a family affair.
KEITH TAFT: I'd like to share this with you.
NARRATOR: Two years later, father and son completed the first ever portable Blackjack computer.
MARTY TAFT: I remember you building this.
NARRATOR: It was quite a beast.
KEITH TAFT: This was the first computer, as you can see it's coated with these brass plates, and it was arranged with an input section, an arithmetic logic computing section, it had a random access memory and a read only memory sections, and I wore the computer here and the battery set right on top of it. The eyeglasses plugged in to this connection and the foot switches plugged in to the lower connector.
NARRATOR: George, as they named their invention, was operated by four communication switches, located inside specially modified shoes. With their toes the player would tap in codes representing the cards they saw being dealt. This information was then relayed to the main computer, which would make its calculations and advise how to play the next hand through a series of flashing lights built in to specially modified glasses. George was one of the most advanced portable computers of its time, but it wasn't exactly perfect.
KEITH TAFT: There were some downsides to wearing this, one is that it's very rectangular, they always tend to be a spot that would dig in to your flesh. Also the sodium hydroxide based nickel cadmium batteries leaked a little bit, and I got some rather bad burns where it touched my flesh.
NARRATOR: For all its ingenuity the Taft's hidden computer was never going to work in a casino. The Taft's knew they had to transform their bulky prototype in to something more slim line and practical. Four years later, after the invention of the microchip, they unveiled David. Their new creation was no bigger than a pocket calculator attached to a credit card sized keyboard.
KEITH TAFT: The hand keyboard was placed on the thigh, and a hole through the pocket, so that it could be strapped on to the thigh and operated with your hands in the pocket normally.
NARRATOR: But David was not just small, it would take Thorp's High Low count to a whole new level, and offer players even greater riches. The beauty of Thorp's original counting method was its reliance on easy to use mental arithmetic. But this was also its weakness. Because Thorp's system had relied on approximations, it did not take in to account precise value of each card that was played. So while it worked, there was room for improvement. The Tafts' realised their computer could do all the calculations effortlessly, in a fraction of a second, and using the exact values for each card. Now a player didn't have to do any thinking at all. All they'd have to do was input the cards they saw, and David would do the rest.
MARTY TAFT: The first card you'd see would be the dealer card. So always we'd put in the dealer card first, which is five in this case, we'd buzz tap tap. Then an eight, then the ace which is eleven, and we'll get our decision. Stand. Things are going our way.
NARRATOR: The Tafts' computerised version of Thorp's High Low count dramatically increased a player's odds of winning. In some cases trebling them from around a one percent advantage to almost three percent, and when you're betting big money those extra few percent can make all the difference.
MARTY TAFT: Bust, player wins.
NARRATOR: The Tafts' computer had taken card counting in to a new era. David had its card counting debut in a casino in April 1977, and made forty thousand dollars in the first week. But the Tafts weren't satisfied with building one device. They set up a production line, to flood the market with David clones, for ten thousand dollars a piece. Card counting was back, and now with hidden computers it was both more accurate and easier to get away with.
But the casinos caught on. Rumours spread that card counting was once again rife. Things were about to get nasty. On the evening of May 11th 1977, Marty Taft made his usual journey to the Blackjack tables, but this time things were different, the casinos were on to him.
MARTY TAFT: They had a security guard standing right there, if I even moved a muscle he'd like grab me, like this.
NARRATOR: A search in the back room revealed Marty's hidden computer.
MARTY TAFT: They threatened they'd take me for a ride, but they also forcefully stripped me to photograph the equipment being on me and all that. It was very tense.
NARRATOR: The security guards had never seen anything like the Taft computer before, but they were pretty sure that whatever it was, he was using it to cheat.
MARTY TAFT: I still remember the security guard sitting there and telling me, "you're in a world of hurt boy, you're going away for five years minimum, now get talking."
NARRATOR: But the Taft computer was so advanced the police couldn't work out what it was used for, neither could the FBI. As they couldn't be certain that he'd used the device for cheating, Marty was off the hook. But the real trouble had only just begun. If card counters were going to use hidden machines to help them win, then the casinos had no choice but to strike back, hard. So in 1985 the casinos used their power and lobbied to change the law. The new Nevada Devices law made it illegal to use any card counting machine. If a computer counter was caught, they could face ten years behind bars.
It should all have been over for the card counters. But then a very different type of player entered town.
M.I.T., the Massachusetts Institute of Technology in Boston, one of the most prestigious schools of science in the world, and home to some of the smartest minds.
BILL HECHT: Your typical M.I.T. student is among the best of the best. They're obviously very bright people. They're lingua franca is, mathematics and science.
NARRATOR: But M.I.T. students are more than just mathematicians, they are people with a reputation for free thinking.
BILL HECHT: There's a kind of unconventional behaviour, a kind of way to look at the system and say gee there's a loop hole, let's exploit it. That's a very M.I.T. kind of trait.
NARRATOR: This maverick attitude meant M.I.T. was full of students doing outrageous things just for the hell of it. And in 1992 one such maverick student in search of a thrill was Semyon Dukach.
SEMYON DUKACH: I was just walking down the hall and I saw a poster, and it said you know win a few thousand dollars over the summer, have fun in Vegas, beat the Casinos. Sounded good to me.
NARRATOR: The poster was for a respectable sounding organisation named Strategic Investments. But in reality it was an underground club run by secretive investors. When Semyon met them he learnt they had a new take on Ed Thorp's original card counting system. One that would allow counters to go undetected in a casino. But it had nothing to do with hidden computers, it was a revolutionary new approach. In the past card counters had failed because the casinos invariably spotted them. This was because all counters followed a procedure known as bet spreading, that's betting small when the deck was bad, and only switching to big bets when the deck was favourable. The club realised card counters would be practically undetectable if they avoided bet spreading by working as a team of people, each following a different betting strategy.
BILL HECHT: If you simply went to Las Vegas and counted cards you'd probably be caught up fairly quickly. If you assemble a team of people who know how to count cards, and also understand the ins and outs of the gaming, what you can do is assemble a group of people who are much more likely to be successful over a long period of time.
NARRATOR: The new approach was team play, and for the very first time a single conspicuous Blackjack card counter made way for the hidden super team. Semyon's team revolved around three M.I.T. whiz kids, all of them expert mathematicians who could make it all look effortless because of their brain power. First there was Andy Bloch, a computer prodigy with a degree in electrical engineering. He played the role of the spotter, it was his job not to make money but to count cards, and watch for the critical moment when a deck turned positive. Then there was Katie Lilienkamp, student engineer and probability expert. Katie was the controller. Her job was to bet small, confirm the spotter's count and calculate the perfect moment for the big attack. Lastly there was Semyon, computer science and internet guru, the big player. He'd wait for the controller's secret signal, then land the table with a massive wining bet at just the right moment. Central to the strategy was the big player's ability to look like a lucky loner, and bet vast sums without arousing suspicion. To carry this off Semyon had to adopt a new identity.
SEMYON DUKACH: There was one particular long stint at Caesar's Palace in Las Vegas, where I was Nikolai Nogov, the Russian arm's dealer, you know making my Russian accent to my advantage. And I typically had a couple of younger women at my sides, and I was acting a little arrogant, a little cocky, so I played to their current stereotype of the Russian Mafia.
NARRATOR: After months of vigorous training a team hit Vegas.
ANDY BLOCH: Oh we'd be betting up to table max which was ten thousand dollars a head. We'd bet probably a total of like a million dollars in bets, or more.
NARRATOR: Night after night the strategic investments team milked the casinos and pocketed millions.
SEMYON DUKACH: We basically felt after a while that any casino out there we could beat them.
ANDY BLOCH: We couldn't believe what we were doing, couldn't believe like how easy it really was. And couldn't believe that they weren't kicking us out almost. But you know over time I realised how well it had all been thought out, and how hard it really can be for the casino to spot us and how much we can camouflage what we're doing.
NARRATOR: At their height there were over one hundred and twenty five M.I.T. team members working the card tables in Vegas.
ANTHONY CURTIS: I actually feel the team play was probably the most significant threat to the, the casino bottom line. Because here you had organised groups that had lots of money, that were figuring out things before hand, it really wasn't seat of the pants attack, it was, it was highly choreographed, get the money attacks, with large sums of money.
NARRATOR: For the very first time card counting was widespread, organised, and almost undetectable. But despite doing all the work the card counters themselves weren't getting rich, most of their money was going straight to Strategic Investments mystery backers. So in 1993 Semyon, Andy and Katie broke from the original group and formed the Amphibians. And they were convinced they could develop a system that was even better. For the M.I.T. whiz kids the counting itself was child's play, so they went back to the basic playing strategy for Blackjack, to see if there was room for improvement. They began by writing a powerful computer program that ran thousands of simulations of every hand they'd ever played.
SEMION DUKACH: The computer would pretend to play you know Blackjack with itself, and we would try using different techniques and see which worked better. And just a lot of analysis, a lot of people brainstorming and thinking, saying hmm may when this kind of card is coming maybe you should trying playing this way instead of that way.
NARRATOR: By re-analysing precisely when to stick, when to twist, and exactly how much to bet in any given situation, they worked out the most efficient strategy yet for maximising their winnings. Their combination of flawless counting and an improved playing strategy meant the Amphibians were playing almost the perfect game, they seemed unstoppable. Then the arms race entered a new and decisive phase. In the summer of 1993 the casinos brought in the Griffin Investigations team, to wipe out card counting once and for all.
BEVERLEY GRIFFIN: The faster you can get someone identified and get them stopped from playing on your game, the more money you've saved the casino.
NARRATOR: Beverly Griffin began by gathering information on consistent big winners.
BEVERLEY GRIFFIN: We started collecting the photographs of the people who were suspected from the different casinos. And we'd have names that they had given, sometimes real, sometimes not.
NARRATOR: It was then that Beverley noticed something unusual. Many of the big winners had given addresses from around the same area, Boston. Then she noticed something else, most of her suspects played only at weekends, and they were all around college age. Beverley made the connection. Could these card counting team members be students at M.I.T.? To find out Beverley checked the M.I.T. student year books.
BEVERLEY GRIFFIN: And lo and behold there they were. Looking all scholarly and serious and not at all like a card counter.
NARRATOR: The M.I.T. yearbooks viewed like a rogue's gallery of team counters. Beverley now realised she was up against some of the smartest minds in America. So the casinos began to develop facial recognition technology, for quick and accurate identification of team play suspects. The basis for the database were the M.I.T. yearbooks. From the moment a suspected counter entered a casino they could be monitored by the hundreds of cameras on the casino floor. Snapshots could then be downloaded for computer analysis.
TRAVIS MILLER: Each time he moves I try to see which shot is going to be the best for him, that we can use to match him up further down the road. This would be the perfect shot, he's directly in the centre of the photo, all we see is his face, he's looking straight ahead in to the shot.
NARRATOR: Facial recognition software analysed the relative position of over eighty coordinates on a suspects face. As individual as a fingerprint this information could be run through the Griffin database of suspected card counters, and an identification made.
TRAVIS MILLER: And it looks like we have a perfect match on the very top.
NARRATOR: For the very first time a suspected team counter could be monitored, identified and asked to leave before they'd even played a hand. At last, the casinos had a weapon to catch the teen counters. At least in Las Vegas. But the Amphibians weren't worried, when Vegas became a problem they simply took their team play strategy on tour.
SEMYON DUKACH: It was a three week trip all over the Europe with Katie and Andy. We spent some time in London, in Paris, in a bunch of different European destinations, playing a very, very strong game and winning quite a lot. And one of our stops was the famous casino at Monte Carlo.
NARRATOR: This was going to be their big night. They were armed with a near flawless system, honed over some forty years.
ANDY BLOCH: We found a good table, we sat down, the three of us played, we were able to you know count cards, and we were winning. Then at one point Katie got up from the table and she was going to take a break.
KATIE LILIENKAMP: In the process of coming back to the table four people actually stopped me and they wouldn't let me go back to the table.
NARRATOR: Within seconds the table was surrounded by security guards.
ANDY BLOCH: And we knew at that point in time that the game was up.
NARRATOR: Semyon and Andy were politely ushered towards a back room. What happened next took them completely by surprise.
ANDY BLOCH: There was a security camera up on one, the opposite wall, and they had the three of us getting closer together so they could get one nice shot of the three of us. They pick up the phone and they're talking in French, and I can make out a couple of words that they said, "Griffin Investigations, Las Vegas, Nevada". They were basically taking our pictures, sending it over to Las Vegas so that they could check us all out in the Griffin book.
NARRATOR: What the Amphibians didn't know was the Griffin Investigations database had gone world wide, via the internet. Within an instant the Monaco Casino security guards were able to positively identify them as known card counters.
ANDY BLOCH: Oh the guy said that if we ever set foot in the country again we're going to be really hurt. He was threatening, he basically made it clear they're going to beat us or probably kill us if we ever entered the country.
NARRATOR: From that moment it was pretty much over for the Amphibians. The brilliant students from M.I.T. had been beaten by casino technology.
ANDY BLOCH: Once your face gets in the database as a known card counter unless, unless you want to have surgery you're career is pretty much over from any place that subscribes to this database.
NARRATOR: Card counting had been mortally wounded. The casinos had triumphed after an arms race that had lasted over forty years. Edward Thorp's beautiful mathematical system had finally been rendered useless, by advances in surveillance technology. The original members of M.I.T's most successful team are no longer active counters. Breaking Vegas was only ever a hobby to them. Andy Bloch still plays Blackjack, but only occasionally.
ANDY BLOCH: So I can still play but it gets harder and harder and you don't want to have to keep moving around, and you're making less per hour and you just want to be able to express yourself, and you can't do that when you're playing Blackjack, you're trying to act like you're a fool.
NARRATOR: Andy is now a professional poker player. Katie Lilienkamp has returned to study engineering at M.I.T.
KATIE LILIENKAMP: I think they'll probably always be some people that are able to take advantage of the game of Blackjack, but er it's going to be very hard for someone to actually make a living as a card counter.
NARRATOR: Only Semyon Dukach is still linked to Blackjack, he teaches others how to play.
SEMYON DUKACH: I love playing, I love beating the casinos, I love knowing that my team was ahead of them, and tricking this huge fifty billion dollar industry.
NARRATOR: And what about Edward Thorp, the man who started it all. Well he's taken his knowledge of how probability really works to the biggest casino of them all, the stock exchange, and has made billions.
In the mid-1990s, a team of American science students took on the might of the Las Vegas casinos, and came home with millions of dollars. Hardworking engineering students during the week, they became high-rolling gamblers by the weekend and proved that, in one game at least, the house doesn't always win.
The game was blackjack, and the students were from the world-renowned Massachusetts Institute of Technology (MIT). Their audacious winnings marked the climax of an arms race between casino and player that began 40 years earlier with maths professor Edward Thorp. He realised that the one feature of blackjack that made it different from other casino games also made it possible to beat.
In most gambling games - roulette, dice, slot machines, the lottery - events in the past do not determine the future. The odds are the same on every roll of the dice or spin of the wheel. Winning streaks or losing streaks may occur, but they are only one possible result from the set of all possible outcomes. A fair coin that has shown heads ten times, still only has a 50% chance of showing heads on the next flip.
Casinos and bookmakers make certain that the odds are always stacked slightly in their favour. In other words, over time, the house will always win.
Thorp realised that because of the unique way blackjack was played, the odds were not always the same in every round. After each hand is played, the used cards are put to one side, and not shuffled back into the deck. They are effectively removed from the pool of available cards in the next round.
So in any given hand, the odds of getting an ace will decrease if an ace has been played in previous rounds. Aces are beneficial to the player, so having a smaller proportion of aces in the deck shifts the odds further in favour of the house. Previous gamblers had realised this fact, but no one had the insight to come up with a practical system to take advantage of this phenomenon.
The basic rules of blackjack are simple. To win a round, the player has to draw cards to beat the dealer's total and not exceed a total of 21. The dealer must draw cards until a total of 17 or greater is reached.
Thorp calculated that as the game continued and cards were removed after each round, if the remaining deck became richer than average in certain types of cards, it became advantageous to the player. Although the winning margin is still subject to the luck of the draw, this meant that using perfect strategy, with a large bankroll and playing enough hands, the player was more than likely to come out on top.
A player would start off each deck playing minimal stakes. Then by keeping track of the cards leaving the deck, they would determine a point when the odds switched in their favour and lay down larger and larger bets as the deck became more and more favourable. Playing perfect basic strategy without card counting, the player's average expectation is between -0.6% and 0%. Using perfect high-low card counting and playing perfect strategy, the player's average expectation is between +0.4 and +1.14%. So a £100 bet will yield on average £101.14 in return, playing a single deck game.
Testing the system
Thorp announced his strategy at the American Mathematical Society in 1960 and news quickly spread. He was approached by the mysterious 'Mr X', a gambler and businessman with strong links to the underworld, who was eager to see whether his strategy could make real money. Mr X put up $10,000 to test the system. Unaware of Mr X's mobster links, Thorp agreed, and playing according to his strategy in Reno casinos, managed to more than double his bankroll in two days of play!
In 1962, Thorp published Beat the Dealer - A Winning Strategy for the Game of Twenty One. Immediately casinos in Nevada were inundated with wannabe card counters, eager to make a quick buck. Four years later, the second edition outlined the new high-low count, a system with just as much power but easier to use.
The casinos, terrified of losing money, decided to change the rules to make life harder for the card counters. They increased the number of decks, they shuffled more often and at one point even changed the winning payoffs. Dealers and pit bosses learned how to spot card counters, and asked anyone suspected of counting to play another game or leave the casino. Life for card counters became increasingly tough, and the counting systems became more complicated in order to try and keep up a marginal edge over the casinos. Card counting became a hazardous and unprofitable occupation.
In 1971, Keith Taft, an electronics engineer from California, was frustrated at his low winnings from counting. He decided to develop a portable computer that could count cards for him. With his son Marty, he built 'George', probably the world's first portable computer, specifically to count cards at blackjack. The player tapped in the value of each card played using their toes, and the computer would buzz back the amount to bet and whether to stick or twist each round.
The computer was able to calculate precisely the advantage or disadvantage each card gave to the player, and thus accurately predict the optimum playing strategy. The Tafts' computer allowed them to move back to the winning margins that Thorp had enjoyed 10 years earlier. Keen to capitalise on their success, the father and son team set up a home workshop to design and build new computers, which they sold for $10,000 apiece.
But it didn't take long for the casinos to catch up with the Tafts. In May 1977, after a long winning streak, Marty Taft was escorted into the backroom of a Nevada casino. Security guards forcibly searched him, found his computer, and sent it away to the FBI. Soon after the law was changed to ban all computing devices in casinos.
Raising the stakes
In the early 1990s, however, a new breed of counters emerged. They had a greater level of resources, training and attention to detail than the casinos had ever encountered. Semyon Dukach, Katie Lilienkamp and Andy Bloch were all studying at MIT when they heard of card counting as a way to make extra money. MIT had a history of card counting. Indeed, Ed Thorp himself had developed the original system whilst at MIT, using one of the most powerful computers in the world at that time.
MIT counters played in teams, usually of three or more. Each individual was given a specific role. Some would simply watch tables, and wait for favourable situations to appear (the 'spotters'). They would call in the expert strategist (the 'controller') who would fine-tune exactly when was the optimum moment to play, and how much to bet according to the cards being played. The controller would secretly signal to a 'big player' who would then join a table and place a massive bet at exactly the right moment.
The key was that by only betting when the odds were well in the big player's favour, the big player could maximise potential profit, and also avoid being spotted as a counter. By watching a number of tables at any time, the team could select only those with the greatest promise of a good return. The big player simply looked like a rich, arrogant young gambler who got lucky on a single bet.
The MIT players went to great lengths to conceal both their own identities and their team play. They would work relentlessly to exploit any edge they could find - inexperienced dealers, poor shuffling or lax security. They also recorded exactly how much profit they managed to make from each situation, and honed their skills to be incredibly close to optimum play.
The trio played blackjack all over the world on and off throughout most of the 1990s, making money wherever they played. Their exploits only came to an end when Griffin Investigations, a private agency hired by casinos, identified the members of the MIT teams after months of surveillance. From that point on a team player even entering a casino would be swiftly ejected.
Card counting still occurs wherever blackjack is played, though as casino technology advances it becomes harder and harder to make anything but a small profit. Facial recognition technology, computerised blackjack tables and rule changes are slowly eating away at the small advantage possible through counting. But the lure of easy money makes it unlikely the casinos have seen the last of the counters. For 40 years they have found ways to make profit, and their ingenuity is bound to succeed again.
Source: BBC Horizon