Was Ed Thorp's "Beat the Dealer" Actually a Good Thing for Casinos?
Questioning a claim that kind of sounds correct until you think about it
There is a claim, somewhat commonly made in gambling circles, that Ed Thorp’s “Beat the Dealer” was actually a net positive for casinos. I think the logic is roughly that Thorp increased interest in blackjack among people who never actually learned to count cards, and thus they became gamblers but were net losers.
I will admit there’s a certain logic to this idea. Also it’s an empirical matter and I don’t have the data to actually settle the argument.
However, I am very skeptical of this claim1.
Magic Hands, Etc.
First let’s just think about the fact that there are lots of ideas that exist in gamblers’ minds about how to win. The vast majority of these ideas were not invented by Ed Thorp and the vast majority of them are also nonsense.
For instance, walk through a casino and you’ll see people waving their arms in front of slot machines, or frantically touching the screen while it spins. These people really believe they’re conjuring the forces of the universe to their aid, and they can win doing this. There are people who think you can win by spinning a slot machine five times and walking away. Some people use betting progressions, or Martingales. And nearly everyone sitting at a blackjack table believes in winning by understanding “the flow of the cards.”
The key takeaway is that gamblers do not need a legitimate system invented by a math professor to think that they have a way to win. In fact if it’s a choice between bullshit or math, the bullshit is just fine as far as they’re concerned!
What’s more is that the nonsense ideas can be deployed at any game in the casino.
Does Anyone Actually Care to Win?
Which brings me to the next point. The other games in the casino seem to be doing just fine. You can go through the revenue reports for the Nevada Gaming Control Board and there’s no correlation between the broad perception that a game can be beaten, and how much money is wagered on that game.
Not very many people believe that slot machines can be beaten2, and slot volume is through the roof.
Almost everyone believes that sports can be beaten, and yet sports just does ok.
Also, if the existence of card counting as an idea was so great for casinos, why does blackjack’s share of the casino floor keep shrinking? Meanwhile, games that people think are unbeatable keep expanding.
Who Are These Elusive Card Counters That Are Also Profitable to the Casino?
The idea that Thorp made the casinos money rests on the existence of people who were not gamblers before they became aware of “Beat the Dealer” - then they became gamblers, and yet never bothered to actually learn to count.
To understand this you have to think about the kind of mistakes that a bad card counter will make. For example, a notorious mistake is overbetting. They raise their bets with the count, low cards keep coming out, and the player keeps losing. Eventually the true count is +8, and they think they can’t lose now, so they bet even more. Is that good or bad for the casino?
The counter is risking ruin, but the casino is taking a series of negative edge wagers. Their business is to deal games where they have the edge. They can’t deal to players making +EV bets3 and then hope to make up for that on volume by just dealing to a lot of these players. So bad card counters are not good for the casino. Even a really bad card counter would lower the house edge in a way the casino shouldn’t appreciate, considering that the house has costs to deal the game.
Actually you can use software like Casino Verite to simulate how many mistakes a card counter can make, given a bet spread, in order for the player to be +EV. It turns out they can actually make a decent number of mistakes.
So you really need a bunch of people who just can’t be bothered to learn any counting at all (let’s call these people DGAF Counters), but somehow were lured into the game because of Thorp.
To pile on to this point, not only do you need DGAF Counters that are profitable for the casino, but their losses have to be greater than the wins of the real professional counters that Thorp inspired. Considering that the professionals are going to be betting a lot more, you would need lots of these DGAFs.4
Also remember that the mere existence of card counting carries costs for the casino as they have to monitor the games to keep the real professionals out. So the DGAF Counters losses also have to pay for game protection.
Maybe you’re thinking “Hey, but what about the guy that sort of counts cards, and maybe even wins a little, but then loses it back at the crap table???”
I would say that Ed Thorp didn’t have anything to do with the money the casino wins in that scenario. It sounds like a guy who is happy to lose, and if anything Thorp’s influence was the only negative for the casino.
The Not Very Effective Jedi Mind Trick
It’s worth considering that this is all just an attempt to Jedi mind trick casinos into believing that card counting doesn’t hurt them. It also sounds like political spin, in the same way that Trump claimed that Mexico was going to pay for his wall.
Not only are card counters not hurting casinos, but Ed Thorp made casinos a bunch of money!
From that standpoint I get the hustle, it just doesn’t appear to be working. Casinos back off card counters spreading from $10 to $40. The legendary advantage player, Max Rubin, went to work for the Barona Casino and it’s not like they stopped backing off card counters. They just became known for doing it politely.
So I don’t think casinos are at risk of being struck by some lightning bolt realization that actually Ed Thorp was good for business.
There’s another reason that I think this idea is particularly weird.
Ed Thorp is a badass precisely because he’s a pioneer of advantage play.
The claim I’ve tried to debunk would make him something like the Patron Saint of Degens.
I don’t think that’s true, and I don’t know why anyone would want it to be true.
There is a related idea which is that casinos spend too much time worried about card counters, relative to the damage that card counting can actually do. I am not going to argue in favor of or against that idea.
This post is not going to be long enough to fully discuss the paradox between people believing that magic hands can help them win at slots, and yet actually slot machines can’t be beaten.
On average. Assuming they are spreading their bets roughly with the count.
I should specify here that recreational gamblers that played blackjack before they heard of Thorp should not be included in the DGAF Counter group. The claim I’m rebutting is that Thorp acted as lead gen for casinos by giving people false hope of winning. If someone was already in a casino losing, then heard of Thorp, I don’t think their future losses can be attributed to “Beat the Dealer.”