Since they opened, Atlantic City casinos have fought against an anonymous army of shrewd blackjack players. This summer the casinos complained they might lose $20 million if they couldn't change their blackjack rules, so New Jersey's governor agreed--temporarily.
This was bad news for a loosely knit group of Washington whiz kids and game players--call them the Math Club--who used computers to win at blackjack. Here's the story of how the Math Clubbers tried to break the bank at Atlantic City. And why a decision to return to the old rules this fall could mean happy days are here again.
Two years ago the computer terminal in Bradford Hanes' suburban Washington home came up with some good news: Hanes could expect to win $900 a day playing blackjack at Atlantic City casinos. Hanes, who regularly uses a computer to study games as diverse as chess, backgammon and Candyland --mostly for fun--shared the discovery with half a dozen friends. They gathered in Hanes' living room and began dealing thousands of hands of blackjack.
That day Hanes and his friends-- call them The Math Club--began training as card counters, a term used to describe blackjack players who keep track of cards dealt so they can tilt the odds in their favor. In addition, they cranked up their computers to play millions of simulated hands of blackjack, developing a strategy tailored to the rules in Atlantic City. A few months later, they descended on the resort for a test.
The computer had been right. So right, that when Hanes's job prevented him from visiting the casinos, he hired others to invest his money at the blackjack tables.
Said Hanes: "They're giving away money up there."
Bradford Hanes is a pseudonym. If his real name were used, he says, he'd never get inside another casino. All other details in this article are true-- he will be easily recognized by friends and family-- but to Atlantic City casino operators, blackjack players like Hanes are the enemy.
Courts have ruled that because casinos don't provide an essential service, they can decide who bets at their tables as long as they don't discriminate on the basis of sex, race, creed or national origin. Though courts are still wrestling with the question, no law forbids a casino from discriminating against someone who is too smart. Which is why casinos show card counters the exit.
In spite of his penchant for anonymity, Hanes has already been barred from most casinos in Atlantic City; his boyish, bookish looks attract attention.
"I try to look natural with my money," says Hanes. "But as young as I am, that's tough. When they see me, they look twice. I try to project the image of a lucky investor, but I look like a grad student who plays with computers in his basement."
At 29, Hanes is adolescent skinny, with fine blond hair, an alert, youthful face and a pair of plastic black-rimmed glasses. In high school, he and his friends were on the chess team or in the audio-visual club. You know the type: the "brains," the "AV guys," the math club characters. Hanes says he and his friends exhibit a kind of "eccentric intelligence . . . an above-average game-playing intellect which makes for a slightly warped personality."
But the Math Clubbers are not playing in high school anymore; they've grown up and put their special talent to work in a game that involves millions of dollars. They use disguises and the courts to keep their place at Atlantic City's gaming tables, while the casinos fight back with hidden cameras, rule changes and a security force.
To hear the casino operators tell it, the Math Club types were winning this bizarre duel of minds and money until recently, when a slight change in New Jersey's rules of blackjack decreased the players' advantage. The other side claims greedy casino managers skewered statistics to convince New Jersey gaming officials to ruin what had been the most favorable climate for blackjack players in the Western world.
For some people, life is a game. For the Math Clubbers, games are their lives.
They meet on Monday nights to play backgammon at the Dupont Circle Club, a drab room in the basement of an apartment building near the National Zoo. For ambiance there is shabby furniture and a flickering black-and-white TV set. But never mind. On a good night, Buffalo, heavyset and amiable with a fat cigar in his mouth, will be there. Widget might drop by, or Tommy Moron, Pea Brain, K.G. or The Lion. The nicknames are used affectionately and regularly. The dress is Sta-Prest, with shirts of unusual colors and patterns. And the comraderie is infectious.
This motley crew of gamesmen hold jobs as computer programmers, accountants, and, in one case, a college math professor. Some, Hanes jokes, are simply "bums," such as the professional bridge player and the professional golfer-in-training who has rich relatives.
Sometimes Math Clubbers pool their money to send a player to backgammon tournaments in Las Vegas, the Bahamas, or Monte Carlo, and the investors share any winnings. But their interest in games is indiscriminate.
Hanes, for example, once programmed a computer to play Candyland, a children's board game. After the computer had played thousands of simulated games, Hanes learned there's a slight mathematical advantage in going first, which the rules dictate the youngest player must do.
He and his friends also studied another children's game, Chutes and Ladders, in which a metal arrow is spun to determine moves. Could a hand-held speed detector--the kind used to time the velocity of a baseball pitch--be applied to the spinner to determine a bias? Some Math Clubbers have thought about trying it. Math Clubbers have even won $1,000 victories by playing Monopoly for real money.
Hanes began playing adult games at Bethesda's Walt Whitman High School, where he was founder of the chess club before graduating in 1970. He began college at Pittsburgh's Carnegie-Mellon University, then, much to his parent's displeasure, dropped out to pursue chess. Hanes says he was among the top one percent of chess players in the United States, but "not good enough to be in the top one-tenth of one percent." He never earned a college degree, but supported himself in the early 1970s by selling chess equipment at tournaments and by driving a Baker Boys ice cream truck near Rockville.
A friend taught him backgammon in those days, and Hanes realized he had a natural talent. He began working as a $100-a-week bank teller at a small Washington bank and was soon asked to begin a department that bought and sold second mortgages.
"Around the time they were going to make me their youngest, longest-haired officer," recalls Hanes, "I packed and moved to Florida to make my fortune."
That was four years ago; today he is worth $250,000. In Florida, Hanes joined an ex-computer programmer and professional gamesman. Call Hanes' mentor Roger. Hanes calls him a "rocker" or "twitcher," one of those perpetually distracted geniuses with uncoordinated body movements who, Hanes says, "can expound on the finer points of the most sophisticated computers in the world [but can't] peel an orange." Roger could perform intregal calculus at age 15, but Hanes says Roger still panics at highway toll booths.
Roger's difficulty in coping with everyday living didn't hamper his talent for making money. Using a sophisticated method for buying and selling stock options, Roger was busy parlaying about $30,000 into millions when Hanes joined him.
The two operated out of a penthouse owned by another chess player, a rich, reclusive young man who had made a fast fortune by investing in commodities, coins, stock options and real estate. And he'd bought himself an office building, renovated the top floor into an apartment and kept the rest of the building vacant for privacy.
His only companions, said Hanes, were "runaway 17-year-old topless dancers" who held a puzzling attraction for the rich recluse. His other passion: cryogenics, particularly as the science of freezing matter related to the possible extension of his life. Hanes says his Florida friend dreads aging -- when he turned 40, he dressed in black for a year--and intends to have his body frozen immediately upon death in the hope that someday science will discover how to resuscitate him.
And so in the mid-1970s, this bizarre trio of chess experts--Hanes, the "twitcher" and the recluse--sat in front of computer terminals and dealed in stock options. Hanes quickly learned to make hundreds of split-second decisions, relying on a computer to keep track of complicated transactions. He also set up a computerized system of bookkeeping for the reclusive entreprenuer, whose intricate dealings had frustrated a local accounting firm.
Hanes married a woman he had met across a bridge table in Washington, and in 1978, the newlyweds moved north to a home they bought in Kensington. (Today, Hanes' wife works for a computer firm.)
Along with Roger and some other chess-playing associates, Hanes formed a company called Chess Options Corp. to make markets in stock options. Today their firm owns one seat and rents another on the Chicago Board of Options Exchange. Hanes works five days a week at the keyboards of two computer terminals in his basement office. He trades Chess Options' account and earns a five-figure annual salary for keeping the Florida millionaire's books, a task done automatically by computer.
"What I guess we do, to the layman, is a very sophisticated sort of arbitrage," says Hanes. "We play one option against another on a given stock, setting up something resembling a middle in a sports bet, getting one line from one bookie, one from another and playing it both ways."
By having their own representatives buying and selling on the floor of the CBOE, Hanes and his partners can make money earning even the thinnest of profits on a trade because their commissions are so small.
This work cut into Hanes' time for playing games, but not so much that he couldn't compete in an occasional backgammon tournament. And because many tournaments are held in conjunction with casinos, Hanes began playing blackjack. To "defend" himself, he began studying basic strategy.
Notes Hanes: "Like the cop said: motive and opportunity."
Statistical studies made of casino games show that blackjack offers the best odds for gambling. Forget everything your Uncle Harry told you about the craps system that once made him a winner in the Bahamas. Bask in the snob appeal of playing baccarat, but don't bet the rent. Roulette may be fun, but the house has a big advantage. And walk right by the slot machines-- the players pulling the handles might as well mail their money to the casino.
Because players can gain an edge over the house, blackjack has become America's most popular casino game. But most blackjack players know little except the basic rules, which is why the average Las Vegas casino keeps 20 cents of every blackjack dollar wagered. The statistics were about the same in Atlantic City when Resorts International opened the first casino there three years ago. But gradually the numbers began changing. This spring Atlantic City casinos kept only 12 or 13 cents of every dollar bet at blackjack.
"This tells us that the players are becoming more sophisticated," says Ben Borowsky, a spokesman for the New Jersey Casino Control Commission. "The percentages in Nevada are still holding at around 20 per cent. The average player who goes there is a recreational player--he's on a convention or vacation. In Atlantic City, we're finding a lot of repeat business because it's so close that a person living in the New York or Washington area can spend every weekend in Atlantic City without much difficulty. And ... (one study) estimates that close to 25 per cent of the players in Atlantic City are using some kind of strategy system."
A Resorts Internatonal casino executive agrees. "Blackjack has become a game of skill here, not a game of chance," he griped to the Wall Street Journal. "We believe if we're going to build a big, expensive casino, we should have the mathematical advantage in every game."
Blackjack is not difficult to play. All face cards have a value of 10, all numbered cards are worth their face value, and the ace counts as one or 11, at the discretion of a playeresus.
A dealer deals cards from a shoe--a wooden or plastic box that holds several decks. A player tries to accumulate cards with a higher point total than the dealer without exceeding 21.
After being dealt a requisite two cards, the player has the choice of "standing" with his two cards or "taking a hit" by receiving additional cards. The dealer also deals himself two cards to start; in Atlantic City, all cards are dealt face up except one of the dealer's.
If the player decides to take a hit and draws cards that total more than 21, he loses his bet. After each player has decided whether to hit or stand, the dealer turns over his face-down card. If his two cards total less than 17, he must draw cards until his total is 17 or higher. If, in drawing, the dealer's total exceeds 21, he loses. Presuming the dealer's total stands somewhere between 17 and 21, all players at the table whose total exceeds the dealer's, without exceeding 21, win an amount of money equal to their bets. Ties mean the player keeps his bet.
A blackjack is an ace and any 10-value card. If a player has blackjack and a dealer does not, he is paid 3 to 2. A dealer's blackjack beats a player's 21. The game's strategy involves knowing when to ask for additional cards based on the value of the dealer's single face-up card. (See "Strategy" sidebar, page 8.)
The foregoing rules are relatively standard around the world. But Atlantic City offered a variation. Called "early surrender," the option permitted a player to give up his hand after being dealt his first two cards. The penalty: loss of half his bet. Borowsky of the casino control commission says he thinks the only other place in the world that offers early surrender is the Portugese territory of Macao, in southeast China. Which, Borowsky notes, "is a long way from here."
The Math Club figured the early surrender option gave a player a one-tenth of one per cent advantage over the casino; others say the advantage is greater.
"That seemingly slight difference," says Hanes, "makes all the difference in the world. I programmed my computer to play blackjack, Atlantic City-style. Now, when Edward Thorpe (author of the classic card-counting book, Beat the Dealer and others first got involved in the '50s, their computer was almost prehistoric.
"The computer I have in my house, which cost less than $15,000, is better than what money could buy in the '60s. I ran several million blackjack hands in a batch, about one million hands in five hours. Ten million hands is statistically worthwhile. The most important thing for me in the beginning was to have it play, keep track of how many hands it played, and how many hands were won or lost. It would sit there and chug along. At the end of 10 million hands, lo and behold, the number was positive. I went crazy. This was a gold mine.
"The trick at making blackjack profitable," says Hanes, "is that unlike any other casino game, the odds are actually changing from one card to the next. Because after each card is dealt, the cards are not picked up and reshuffled. The composition of the deck must be changing. It was discovered by the early pioneers that the change is enough that the odds against the player can get steep.
"Now, if the player had some way of keeping track of the cards and knowing, 'Now I'm at an advantage, now I'm at a disadvantage,' and he simply varied his bet ... Even though 90 hands out of 100 he's at a disadvantage and 10 hands out of 100 he's at an advantage, if he bets a bunch on those 10, any high school student will tell him he'll come out a winner."
Thus, when Hanes plays blackjack, he tries to act like an average player by chatting with the dealer and eying the leggy waitresses delivering drinks. But when all the players' cards are dealt, Hanes makes one smooth pan around the table with his eyes, like a movie camera recording a landscape. Hanes then decides how much money he'll wager on his next hand based on his count of how many cards favorable for the player remain to be dealt. (See "Counting" sidebar, page 9.)
"This is the way blackjack is won in Vegas," says Hanes. "But in Vegas, if you attempt to beat the casinos, you must be patient and count carefully. The opportunities where you have an advantage, no matter how small, come up maybe 14 percent of the time. The other 86 percent of the time when the situation is bad, you must be awake and alert. And when you have an advantage, you must realize it and bet a bundle. If you are lazy, if you lose the count, if you're too timid and don't bet enough when the deck is good, you're going to get chewed up and spit out by that silly little half-percent disadvantage.
"Consider what happens when you move to Atlantic City and you're allowed the option of losing only half your bet on a bad hand. You can fall asleep and not count, but you're not being ground down, you're just being paid a little less because you're lazy. It's like a government job --if you sleep, you don't get as many raises, but you still get paid."
While the Math Club (and other players) enjoyed the early surrender option, the casinos watched their profits decline. The state casino commission shared their concern, and last May voted to suspend the option. But in a confusing bureaucratic turn-around in mid-July, the commission decided it had acted improperly in suspending surrender by fiat. So with one hand, the commission ordered early surrender reinstated, but with the other hand, declared the casinos were in a financial "emergency" and asked Gov. Brendan Byrne to waive the option.
In the two days it took for the governor to agree, Hanes and two Math Clubbers spent a frenzied two days playing blackjack. They knew it might be their last chance to exercise the early surrender option without traveling to Macao.
Hanes was first spotted counting cards at the Caesars Boardwalk Regency casino, where he played blackjack on three separate days one month last year.
Undoubtedly, before Hanes was stopped from playing blackjack, a security expert watched him on a monitor in the darkened room that houses banks of tiny televison screens displaying the action at all the casino's tables.
As Hanes collected his profits after his third day of play, a uniformed security guard approached him and led him away from the gaming area to meet the casino manager.
"Hello, pleased to meet you," Hanes says the casino manager said pleasantly. He then told Hanes he'd been identified as a "professional card-counter." The casino boss told Hanes he was barred from playing blackjack in the casino, though he was free to play any other game. Should he be spotted playing blackjack again, the manager told Hanes, he would be barred from the premises. Should he be spotted a third time at a blackjack table, he would be arrested for trespassing.
Counters become accustomed to this lecture.
The casino manager also threatened to give Hanes' description to the other casinos. Counters aren't certain whether casinos share such information, and the casinos won't discuss their security arrangements. But at least one casino has a still camera that can be attached to the small TV screens. When a cheating employe, obvious hustler or card counter is spotted, a picture is taken of the offender and added to the casino's collection of photos.
It's difficult to say how thick Atlantic City's photo albums of are. A spokesman for Resorts says in three years his casino has asked between 75 and 100 counters to leave.
But the New Jersey Casino Control Commission says more than 1,600 people have been kicked out of Atlantic City casinos. While most have been barred for card counting, the Commission doesn't know how many might have been barred for other reasons, such as disorderly conduct.
A couple of years ago, one of the nation's best known card counters, Kenneth Uston, filed a suit against Resorts International in Atlantic City. Uston, who said he and some associates won $145,000 counting cards at Resorts before being barred, argued the casino had no right to discriminate against him.
Last May'C an appeals court agreed with Uston; the casino is appealing to the New Jersey State Supreme Court. Should Uston win, the Math Club won't have to worry about blending in with the crowd.
But the war won't be over. Borowsky, the gaming commission spokesman, says experiments are underway using eight-deck shoes, with a mandatory shuffling of the cards when half the shoe is empty.
Another plan would allow a dealer to shuffle any time a player more than doubles his bet from one hand to the next, or if a new player sits down to bet in the middle of a shoe. The last point is to frustrate "shadow players" who stand near a table counting cards, then begin playing when the deck is "fat." But all that shuffling means less playing time, which means less money for the house.
"In December of 1979, we tried an experiment," says Borowsky. "No counters were barred, but the dealer could shuffle when somebody more than doubled his bet. In 13 days everything we tried didn't work. The two casinos open then lost $1.4 million more in those 13 days compared to the same 13 days the previous month. We know the counters didn't win all that money, but it was a combination of what they won and what the casinos lost through extra shuffling."
Borowsky says if the counters win in court, the casinos may rule that a bet can't be larger than twice the preceeding one. That would frustrate a counter who varies his bets from $10 to $100.
After being barred from the Boardwalk Regency, Hanes moved to Resorts' casino, where he worked harder to disguise his betting patterns. He began betting $200 or $300 a hand as soon as he sat down. He left the big money in the betting circle, even when the count was unfavorable.
At one point, Hanes heard the pit boss pick up a phone and say, "We're getting beat here on table one." Then the pit boss asked the dealer what Hanes was betting; the dealer said Hanes was consistently betting $300. The pit boss shrugged. "Gee," said Hanes, "what an easy game!"
After a couple more shoes, he left the table $3,500 richer. But two weeks later he returned to the casino. Maybe they remembered Hanes, maybe they didn't like his looks, but the casino manager wasted no time taking Hanes aside to deliver his lecture about card counters. Hanes began watching the newspapers for reports of each new casino's opening.
The fastest hello and goodbye Hanes ever said happened at the Golden Nugget. He approached a blackjack table at which only one other player was sitting. A counter likes to sit at a nearly empty table because he can play more hands in less time.
Unwittingly, Hanes picked a seat next to a man who'd been counting cards. The deck had just turned fat.
Casino staffers had been watching the table. And if there's anything a casino fears more than a card counter, it's a team of card counters who, by a prearranged signal, raid a table when the deck is fat.
Seconds after sitting down, Hanes and the player next to him were accused by the casino manager of playing in tandem. A protesting Hanes was barred from playing blackjack at the Golden Nugget.
Most gamblers-- professionals as well as beginners--seem to love the aura of a casino, the look of the green felt, the feel of weighted chips, the sound of dice clicking and cards snapping. But Hanes and his friends wouldn't care if blackjack was played in a muffler shop. You can keep your curvy blond lounge singer sheathed in a tight mettalic body stocking--these guys love the numbers.
For example, the basic strategy chart that accompanies this article is merely a jumping off point for the Math Club. Depending on the true count of the deck, strategy changes. Thus, the sophisticated Math Clubber knows that when the true count is five, he should stand on a 16 if the dealer is showing a 9. Details, for them, are everything.
Greed, of course, can intrude even into the Math Club's equations. Though Hanes has paid other people to play blackjack for him, offering either a $12 hourly fee or a split of the take, he still worries.
"The biggest problem I had in finding people to reinvest my winnings in Atlantic City was trust," says Hanes. "Who can I trust to hand $5,000 in cash and say, 'If you win $10,000 or $15,000, bring every dollar back to poppa'? Even close friends can be tempted."
One of his favorite partners is a computer programmer who worked for the government until he decided to leave his job and marriage to gamble full-time.
"He drives a dilapidated car, dresses like a slob, doesn't own a fancy apartment or house and has one suit," says Hanes. "But he plays blackjack for a lot of money. In his last trip he went to Vegas for eight days. I was involved 50-50. He dumped over $20,000, shrugged it off and said, 'We'll get it back next time.' "
In that respect, Hanes and his friends live in a world different than most people, a world of absolute belief in mathematics.
In June, Hanes traveled with his wife to London, where he paid $1,000 to enter a high-roller backgammon tournament at Aspinall's, a private gaming club. He lost, and was out $5,000 in expenses. That might depress most gamblers, but to Hanes, it was simply a matter of time. If he enters enough such tournaments, he reasons, he'll win. And one win will more than wipe out his losses.
He keeps the same logic in blackjack: "If you know the rules of the game and can follow the basic strategy, you have a seven-one hundredth of a percent advantage, and you're going to win. But you really must count cards if you intend to make any money. With your seven one-hundredths of an advantage, even though you mathematically make all kinds of money if you go in there betting $1,000 a hand, you'd need 100 years and millions of dollars to be sure of coming out ahead ... But if you count perfectly and bet a big enough bet spread to give you a nice advantage but small enough so you won't get thrown out, you're playing with a little better than a one percent advantage.
"If I was allowed to go to Atlantic City and play eight hours a day without getting thrown out and betting the way I want to bet, varying my bet from one to six units, statistically I am certain of being ahead if I'm allowed to play for 120 days. Period. I don't know how much--maybe way, way ahead or a little. Statistically, I can't be losing."
Last month, when the New Jersey Casino Control Commission reinstated the early surrender option--and before New Jersey's governor suspended it again--a friend Hanes calls "Weird Larry" phoned him.
"Take all your money, round up all your counting friends, get to Atlantic City!" Weird Larry said. "And don't come back until you're broke, barred, or they repeal early surender."
Hanes withdrew about $9,000 in mostly $20 bills from his bank, found two members of the Math Club who could join him, and headed up for what may have been his last fling under such rules.
"I headed straight for the Playboy casino, under instructions from Weird Larry to play with the idea that I'd only have one or two days to play. Therefore, I didn't have to be too sneaky--if I could last a day and then get barred, that would be optimal timing."
Then, as if cursed for his presumptuousness, Hanes promptly lost $6,000.
"The plan was to play between $50 and $500 a bet," recalls Hanes, "but by the time the count got good enough to play $500, I was already down a few thousand dollars. I rallied back to win $3,000, but then they tapped me on the shoulder and said, 'No more.' "
Hanes walked to Caesars. Although previously barred there, he assumed management wouldn't remember him. He won another $1,000 before going to bed. One partner, up $1,000, decided to leave town a winner. Hanes' other partner went to bed up a few hundred dollars.
The next morning Hanes returned to Caesars' where he won another $300 before deciding a floor person was watching him too closely. Meanwhile, his remaining partner lost $3,000. The next stop was Harrah's, the only casino from which Hanes had not been barred. He varied his bets from $25 to $300, a large spread by Atlantic City standards. Management noticed, and Hanes was barred after winning a few hundred dollars. So he played pinball while his partner won back $1,600 of the $3,000 lost earlier that day.
Near dinnertime, the Math Club duo decided to quit.
"The bottom line was that, as a threesome, we broke just about dead even, including travel and hotel expenses," says Hanes. "It boiled down to a massive scramble to win back the money I lost the first few hours I was there."
Whether Hanes will get another chance in Atlantic City depends on a the casinos, the commission and the courts.
The ace of card counters, Ken Uston, argues that the study that convinced the Casino Control Commission to recommend the abolition of early surrender was based on unrealistic figures. The study assumed 27 per cent of all blackjack players in Atlantic City used basic strategy, and that as many as one out of 33 players can count cards perfectly. Uston scoffs at those figures.
After Labor Day, the casinos will add up their blackjack revenues to determine if the game declined in popularity without early surrender. The New Jersey Casino Control Commission will hold hearings. The New Jersey courts will rule on the question of whether a casino can legally ban card counters.
And Bradford Hanes will brood about the halcyon days when Atlantic City was something of a private Treasure Island for the Math Club.