Podcast Summary
Casinos' Efforts to Prevent Card Counting May Cost More: Casinos spend resources to stop card counting, a technique giving skilled players an edge in Blackjack, but it might not be worth it as it doesn't guarantee wins and may even cost casinos more in the long run.
Casinos, despite their small percentage edge known as the house edge, have spent significant resources to prevent card counting, a technique used by a select group of individuals to gain an advantage. This effort, according to Bill Zender, a casino consultant, may actually cost casinos more money in the long run. In Blackjack, a popular card game where players aim to get closer to 21 points than the dealer without going over, the house edge is around 2%. While most players will still lose over time, a small percentage of skilled card counters can potentially turn the tables. Despite the mythology portrayed in movies, card counting is a complex process that requires focus, discipline, and a good memory. It's important to note that while card counting can provide an edge, it doesn't guarantee wins, and the house still holds an advantage over the long term.
From naive casino-goer to skilled blackjack player: Through dedication and knowledge, an individual can reduce house edge in blackjack to 0.5% and potentially gain an advantage by learning card counting.
With dedication and the right knowledge, an individual can gain an edge over the house in games like Blackjack. Ben, a former card counter, shares his story of how he went from a naive casino-goer to a skilled player who could legally take advantage of the system. Growing up in a household that disapproved of gambling, Ben was drawn to casinos once he turned 21. He started with games like craps and lost, leading him to blackjack where he discovered the concept of basic strategy. By following this strategy, a player can reduce their house edge to 0.5%. However, Ben wanted to do better and learned about card counting. This method involves keeping track of the cards dealt to gain an understanding of the remaining cards in the deck and adjusting bets accordingly. Although it may seem complex, with practice and discipline, it can provide a significant advantage. Casinos, aware of this, even sell basic strategy charts and welcome their use, as they still maintain an advantage even when the player follows the chart perfectly. Ben's journey illustrates the potential for individuals to gain an edge in gambling through knowledge and dedication.
Card counting strategy in blackjack: Card counting involves assigning values to cards and tracking the total to determine favorable cards remaining, increasing bets accordingly, but the edge gained is minimal and it's a volume proposition for substantial earnings, despite being a low financial threat to the industry, casinos invest heavily to prevent it.
Card counting in blackjack is a strategy involving assigning values to cards based on their numerical value and keeping a running total to determine the probability of getting specific cards. Card counters aim for a higher count, signaling more favorable cards remaining in the deck, and increase bets accordingly. However, the edge gained is minimal, around 1%, making it a volume proposition for substantial earnings. Despite the low financial threat to the industry, estimated at less than $200 million annually from a few hundred card counters, casinos take it seriously and invest significant resources to prevent it. Ultimately, card counting is a complex and time-consuming endeavor, and the misconception of card counters as winning every time or making substantial wealth is far from the truth.
Handling Suspected Card Counters with Grace and Professionalism: Casinos should respect the law and handle suspected card counters with grace and professionalism to avoid negative consequences, rather than using force or intimidation.
While casinos have the right to ask suspected card counters to leave, using physical force, refusing to cash out chips, or detaining them in a back room is not only unprofessional but also costly. Bill Zender, a former casino insider, shares his experience of catching card counters with grace and professionalism. However, not all casino agents follow suit, leading to lawsuits and settlements worth millions of dollars. It's important for casinos to respect the law and handle such situations with tact to avoid negative consequences. Card counting, though a legitimate way to improve odds, is not a crime, and casinos cannot use intimidation or force to prevent it.
False imprisonment and financial losses from security measures against card counters: Casinos' security measures against card counters can result in false imprisonment and financial losses for both parties, leading to a continuous cycle of legal battles and countermeasures.
Security measures in casinos can lead to false imprisonment and financial losses for both the casino and the accused. In extreme cases, card counters may take legal action against casinos for false imprisonment and other related issues. Casinos also employ various tactics to deter card counters, such as preventing entry after the first hand and using multiple decks, but these methods can also slow down the game and limit profit potential for the casino from regular gamblers. Despite the potential financial losses from card counters, many casinos are reluctant to change their practices due to fear of short-term backlash. This results in a continuous cycle of legal battles and countermeasures. Ben, a former card counter and hospitality management graduate, has firsthand experience with these issues and has advocated for casinos to focus on increasing turnover rather than solely targeting card counters.
Lessons from the Casinos: People will go to great lengths to gain an advantage, even in industries perceived as irrational. Academic knowledge can be dismissed, and strategies like card counting have become more difficult due to advanced security measures, leading some to resort to disguises and elaborate costumes.
Despite the perceived irrationality of certain industries, such as casinos, they can still appear to be successful on their own terms. This was a lesson shared by a professor who consulted with casinos, who admitted that academics were often dismissed for their theoretical knowledge. Card counting, a common strategy used to gain an edge in blackjack, has become increasingly difficult due to advanced security measures. As a result, many card counters have had to abandon the practice and seek alternative careers. Interestingly, some individuals have resorted to disguises and elaborate costumes in an attempt to evade detection. This anecdote highlights the lengths people will go to in order to gain an advantage, even in the face of seemingly insurmountable odds. Ultimately, it's a reminder that there's often more to a situation than meets the eye, and that success can come in unexpected forms. This episode of "The Economics of Everyday Things" was produced by Sarah Lilly and mixed by Jeremy Johnston, with help from Daniel Moritz-Raphson. For more insights into the hidden side of everyday life, tune in to Freakonomics Radio Network on Stitcher.
