Interview with member of the MIT Blackjack Team

And instead of going to medical school, went into the world of finance. In the interim, this whole internet thing started. And these days people don't depict the internet this way, but it used to be depicted always as this big cloud, and that's what the internet looks like in case you're wondering. And then I went on to start three companies the last of which was called Citizen Sports. And just sold that to Yahoo actually three-three months ago. And decided I didn't want to work there as part of the deal so I am now just out promoting my book.
But during that whole time, I was a professional card counter and I played blackjack for a living. And I like to actually make this reference to the guy who invented the internet which is important that we all refer to him; 'cause now we can say that Al Gore has invented two things-one good, one bad. He invented the internet which is good-none of us would have jobs if he hadn't done that.
And then he invented global warming-which has been bad for us. So-[Pause] [MUMBLING in AUDIENCE] Come on that's funny. No one ever laughs at that joke anymore.
Maybe that joke is too far for people now. They don't remember that-anyways. So what is a professional blackjack player? This first thing that people say is, "Isn't that illegal?"
And it's actually been tried and I have a whole passage in the book. 'Cause people always wonder why it isn't illegal or why- It’s just using your brain to beat a game. It's like- What´s your name? >>MALE VOICE: Mike. >>JEFF: Mike. Say Mike and I are playing Monopoly together all the time try to play here.
And I always buy Boardwalk and Park Place. And he buys the crappy utilities. And one day he just throws the board up in the air and says, "This should be illegal!" It's just using your brain to beat a game to be better than someone at a game.
So Mike, just get better at Monopoly and stop complaining. So the second thing that people always say is, "Are you banned from Vegas?" And believe it or not there is not someone who waits for me at the jet way of McCarran Airport when I get off and says, “Excuse me, Mr. Ma, you have to turn around and go home.” I'm just not allowed to play blackjack. Actually, a pretty funny story from the filming of the movie.
Now, you guys that have seen the movie know I'm in the movie, right. Nod. Pretend you remember. Otherwise it's really sad for me.
[AUDIENCE LAUGHS] Yes. Ok, so this is always very sad for me. Because people never remember.
I am a dealer in the movie, named Jeffery. The person who plays me walks up to me and says Jeffery my brother from another- I have a couple of witty lines a sad card, nominated for a new academy award. Best actor in a movie that's about themselves, that's in the movie for less than five minutes. [AUDIENCE CHUCKLES] But that scene which is literally about five minutes long, I-I was out there filming for three days.
And it's not ‘cause I was messing up my lines. It's because you talk about an inefficient industry-movie making is completely inefficient. So I'm out there filming my scene and one day the cast turns to me and they go, "Hey, Jeff, I think it'd be really fun if we all go to dinner tonight." So we go and we head to dinner. On the way over to dinner, Kate Bosworth pulls me aside.
And if any of you guys know what Kate Bosworth looks like, when she pulls you aside, you’re like, “Kate, yes, what would you want? What can I do for you?" So Kate says to me, she says, "You know what I think would be really fun?"
And I said, "What?" And she said, "After dinner let's all go play blackjack." And I said, "Kate, I don't think this is gonna happen. They know who I am. They're not gonna let me play blackjack.” She said, "It's ok. You'll be with me.
I'm a big star. They won't bother you." And I'm like, "Kate, it's been a long time since "Blue Crush". I don't know what a big star you are anymore."
[AUDIENCE LAUGHS AND GROANS] But what seemed like this horrible idea, after about four or five bottles of wine later, seemed like this great idea. And after dinner, we're rolling up stairs to the casino at the top of the Palms, the Playboy Casino. And I set down at the table and the floor person looks at me, he goes, "Jeff, what are you doing?" I said, "I'm here.
I'm playing blackjack with Kate Bosworth of "Blue Crush". Big star, no big deal, right." And he said, "Let me check." And he calls upstairs, and comes back to the table and he goes, "Not only are you not allowed to play, but if your little friend, Kate's, at the table you're not allowed to be within 20 feet of the table." And so this was cool because it made Kate think I was like this-you know- she thought I was so cool after that.
And so she went and told everyone on set the next day how cool I was. And if any of you guys watch "Seinfeld", it's like when George tries to be a bootlegger and like he's this really bad dude. Anyways, sorry, sorry for the non sequitur, but the whole point is I'm not banned from Vegas; they just don't let me play blackjack.
And then the final thing is they say, "Remind me never to play poker with you." And this is interesting because it actually is a real-it really kind of is a lead in to why I wrote "The House Advantage", my new book. Because blackjack is this perfect petri dish for using analytics. Imagine that you could model situations and always know how the person you were modeling or playing against was gonna act. You always knew perfectly.
In poker, you don't, right. In poker, you can make absolutely the right call all the time and then some idiot decides to go all in on a pair of twos. And you just -- a two pops up and they get lucky and you lose. And the same thing's true of the market, right.
You know people think that it's smart to keep lending a million dollar mortgage to farm workers who make $12,000 a year and think that's a good investment decision from a mortgage standpoint. I mean people act irrational, and blackjack is not that way, because you only play against the dealer and you know at all times how the dealer's going to act so you can model the situan per-situation perfectly. So what makes blackjack beatable? Well, blackjack is the only game in the casino that's subject to something called "conditional probability." If you contrast blackjack to roulette- And one of my favorite stories from roulette and it's in "The House Advantage".
Is this time that I went to Vegas with my friend, Brian, and this is after the whole blackjack thing was done for me. And I walked up to the blackjack table and Brian actually asked me to sorta coach him to play blackjack. So I was kinda sitting next to him, just tellin' him what to do. And over about two hours we won a couple thousand dollars.
So it's Friday night in Vegas, and I'm like, “Let's go spend the money somewhere.” So we get up and we start walking over to go cash out the chips and all of a sudden Brian disappears. And I'm like, “Where did Brian go?" And all of a sudden I hear, "$1000 on black." I look up. There's Brian.
I walk over to the roulette table and Brian's setting there and before I can say anything the roulette wheel spends and it's, "14 red." Brian loses $1000. I go to grab Brian and I'm pretty happy that he's only lost a $1000 and he's still up a $1000. And I can explain to him that roulette is the most horrible game you can play in the casino.
And he looks at me and before I can grab him, I hear him say, "$1000 on black." And I say, "Brian, what are you doing?" He says, "Don't you see what is happening here?" And I said, "No." And he points up to this magical sign above the roulette wheel. And this magical sign has the result of the last 20 spins.
And the last seven now have been red. So in Brian’s mind, black is a sure thing. And I say, "Brian, that's not true." And he goes, "Listen.
I know you know blackjack and statistics. But this is roulette. And this is gambling, and I know gambling."
[AUDIENCE LAUGHS] Well, we all know that-the flaw in his logic, right. Every spin of that roulette wheel is independent. And I walked away. And the whole "fool and his money are soon parted." Well, he was the fool and his money parted. And an improbable three more reds in a row, Brian was out $4000 now and down $2000 for the night and we no longer had any money to spend at the club.
But no worries. Anyways. So the point is that roulette every spin is independent and the same thing is true of craps.
Right, every roll of the dice is independent. But, in blackjack, if I take all four aces out of a deck of cards, hand you that deck of cards, what do you think the chances of you dealing yourself blackjack are? Mike, what do you think the chances are?
>>Mike: Don't know. >>JEFF: Zero, Right. There's no more aces left.
Good luck dealing yourself blackjack with no aces in the deck, right. So blackjack is the only game where what you see impacts what you're going to see. There is a professor, by the name of Ed Thorpe, and he wrote a book called, Beat the Dealer. But, in the-in the early days, ok, and this is in the 1960's, Ed Thorp was a grad student at UCLA.
And he, -- his wife wanted to go on a vacation. So he had this idea of going on a vacation with his wife to Vegas. And the thing with really smart odds people is they don't want to gamble because they know the odds are always against them. So Ed Thorpe did not want to gamble in Vegas. He just wanted to take advantage of the buffets and the pool and the shows.
And so he's like thinking about heading to Vegas and not gambling. And then all of a sudden, before he goes, this guy hands him a research paper that had just been done by these army technicians where they used hand-held calculators. 'Cause remember this is in the 1960's.