I almost never get to see movies in theaters anymore, but while staying over in New York on business last night I made a point of going to see 21 – the fictionalized account of a group of highly mathematical MIT card counters. It was an irresistible draw to me, as I was both a theoretical math major at MIT and a card counter.
Surprisingly, one thing that 21 made clear was that card counting isn’t an IQ test, it’s a character test. A good card-counting system, as executed in the field, might give you a 2% – 3% weighted advantage versus the house, so each hand is very close to a 50/50 proposition; consequently, you can run way down and way up several times even within a single day of play. It looks and feels a lot like luck, and a player can get very spooked when he goes down $8,000 out of a $10,000 bankroll. It is amazingly hard not to deviate from the system when you are on either a hot streak or a cold streak. The characters in the movie discuss this numerous times, and most fail this test at one point or another.
In the broader sense, the gambling environment tends to attract self-destructive people and encourage self-destructive behavior. The card counting teams that I knew did pretty much what was shown in the movie, e.g., wear costumes to avoid detection, repeatedly return to the same casinos to be treated like high rollers and so on. Though the members had trouble admitting this to themselves, they were acting out fantasies and seeking camaraderie as much as they were trying to take the house for money. Eventually, the teams (in somewhat less dramatic fashion than in the movie) would always fall out over money as a consequence of trying to divide up gains and losses in a venture with large capital requirements and extremely variable earnings.
That said, they were usually a blast for a while. When I was at MIT there were three well-known teams: the MIT team, the Stanford team and the Czechoslovakians. The Czechs were by far the coolest – a small group of mathematicians and scientists who had somehow gotten across the Iron Curtain and were living the American Dream in Vegas, complete with gold chains, Kangol caps and plaid polyester pants. They were almost perfectly represented by a famous Saturday Night Live skit.
My experience was that it was very easy to stay under the radar of casinos if you didn’t feel the need to do any of that. Just play solo at the quarter tables, never spike your bet above 5:1, and play no more than one hour at casino before you move on to the next one. There are about 100 casinos in Vegas, so you can play ten hours per day every other weekend and only visit a given casino once every two or three months (for an hour each time). No pit boss will know who you are or care what you’re doing because you’re so far down in the noise. You can make a lot of money this way. Of course, nobody will ever know that you are taking them, and the emotional satisfaction arises from walking into this multi-billion dollar enterprise and walking out with their money because you’re smarter and more disciplined than they are. In a bizarre way, you succeed through classical bourgeois virtues: self-discipline, frugality, ego control and steady work.
Once you realize all this, of course, you figure out that you can make a lot more money in that giant casino called Wall Street.
( cross-posted at The Corner )