people, startups, MIT
Of Card-Counting, Startups, and the Real Story of the MIT Blackjack Team
Robert Buderi 3/27/08
(Page 3 of 3)
different blackjack strategies—not just card counting but things like card steering and ace tracking—and profits were far below what was expected. Chang says he came to the realization that they really needed to focus on card counting. “I just canned all these games. I said screw that,” he says.
“After I made all these changes, we just won like gangbusters immediately. It was kind of astonishing really,” says Chang. In fact, it was largely about the next few years—1994 to 1998—that Bringing Down the House was written. Things reached a climax the night of June 28, 1997, with the famous “Bite Fight,” the boxing match where Mike Tyson bit off a piece of opponent Evander Holyfield’s ear. There was a riot in the MGM casino, with tables tipped over and chips flying. “The MGM was the center of the universe for the card counting community for a couple years. Players from all over the world would descend on the casino at that time,” says Chang. He estimates that at least a half-dozen teams from around the world, including several from MIT, were in the casino that night. “It’s like everybody was there.”
So much money was being bet in those days, he says, that teams didn’t draw that much attention even when players bet big. “At the moment of the riot, I was at a table betting $9000 at each of two hands and my action was not drawing any special attention,” he says. “Every single player at that table was playing yellow chips, which are $1000 each.”
But over time, the once close-knit teams fell apart. They were partly victims of their own success, says Chang. Everybody seemed to want bigger stakes or for their investments to grow faster, he says. A number of players decided to form new, smaller teams.
Chang draws a lot of parallels to the challenges businesses face. People become dissatisfied with their compensation as the company grows. Or they miss the entrepreneurial environment and go off to find it again somewhere else. “I guess this is the essence of startups,” he says. And it wasn’t like he had much leverage to convince people to stay. “I had not hidden anything from anybody. It was all transparent, so it was easy to break away. We had no contracts. We didn’t have golden-handcuff-type benefits. You didn’t vest, anything like that.” Chang estimates the MIT teams took about $10 million out of casinos over the years. “Although it seems like a lot of money, it’s not really a lot of money, not in a business sense,” he says.
Chang made investments in several teams that broke away from the big group but still wanted him involved as an advisor or in some other limited capacity. But before too long, he says, even that attitude changed and “a lot of my investment in these groups had been returned to me.” He didn’t really care that much about the money—it was beating the casinos that turned him on. “I just found it very fun, and once I got the money I was like, ‘Well it’s a trophy,’” Chang says. “I wasn’t going to use it for anything. And so when people gave it back to me, I really had no idea what to do with it…It was just like lying around in my apartment…I didn’t even know how much it was.” When Laurie, his fiancée at the time, came out to help him move west, she began cleaning his filthy Cambridge digs and discovered more than $150,000, mainly in chips, tucked into various nooks and crannies, bags and jars. Chang was mortified. Each time she found something, he says, “I’m like, ‘Oops…Please, please don’t tell anybody. I swear, there’s nothing more.’ But of course there was.”
By around 2003, the MIT teams had “fizzled out” in the face of lower profits and increasing scrutiny, says Chang. In 2004, though, he and Laurie moved to Las Vegas. “I had avoided living in Las Vegas for years,” Chang says. He thought of it as a cheap town, with no culture, and a joke of a university. But then he realized he actually knew more people there than in Boston.
He and Laurie play occasionally, but he makes it sound relatively tame—until, of course, Laurie’s recent arrest (after speaking with her, I’m not sure I’d want to be with the casinos on this one). It has definitely gotten harder to beat the casinos, which are much more on the lookout for card counters than we he got started and have taken steps to keep the odds more in their favor. But on the other hand, says Chang, the betting limits are also higher. “The actual profitability, that’s unclear. You may be able to make more than ever.”
So what about Bringing Down the House and 21? “It’s kind of a weird thing, you know, to have a movie and book that you’re a pretty main character in and yet not to be acknowledged in any specific way by the author or the producers,” Chang says. “We were never invited by the producers or anything to participate in anything.”
Still, he did go to a premiere of the film in Las Vegas a few weeks ago. Jeff Ma, the MIT grad who served as the model for Kevin Lewis, the main character in the book, even introduced him to the real Kevin—Kevin Spacey.
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3/27/08 9:26 am
Very good article, but one minor clarification. When John told me about the missing $80,000, from what I remember, he didn’t seem especially upset about it…
3/27/08 11:16 am
What about the “pioneers’?? Len Kleinrock and Larry Roberts
3/27/08 11:49 am
Love this story. I would like to know who was on the team. Xconomy should publish the list.
Now that it’s popular, every MIT grad I meet knows someone who knows someone on the team. It’s reaching urban legend status as if the team had over 1000 members.
3/28/08 6:03 am
I don’t even remember misplacing 80K, though if Peter remembers it, I’m sure it happened.
With 25 years of history and perhaps 200 players, it’s hard to enumerate all the people who played on the MIT team. The incarnation I know started at the opening of Resorts in 1978.
Len Kleinrock and Larry Roberts… I don’t know them, but it would be nice to. I just read a transcript of an interview in which they talked about counting cards and timing roulette wheels in the late 60’s. It’s heartening to discover that there were others at MIT between Thorp in 1961 and us in 1978.
3/29/08 2:28 am
Glad to see the excitement and interest hitting the mainstream. John, I would love to talk with you. Get in touch.
Ryan
www.championshipblackjack.com
3/29/08 2:43 pm
Enjoyed your article. A few clarifications and sidenotes:
1) Steve (Ballmer) was a Harvard College (not HBS) classmate of mine, which goes to show you don’t need an HBS degree to make billions of dollars. For that matter, you don’t even need a Harvard College degree as our other classmate, Bill Gates, has shown. FYI - Microsoft bought a software company founded by a couple of other MIT BJ players, Chuck Whitmer and David Wiese. David went on to become the principal architect for Windows and Steve swears that without David’s work Windows and Microsoft would be a mere shadow of what they are today.
2) While I know John likes to say he’s Mickey Rosa [:)], the founder and leader of the Team, the fact is he’s a dead ringer for the character Choi played by Aaron Yoo.
3) It’s 25 years later and John still “loses” real estate limited partnership distribution checks we send him.
3/30/08 12:00 am
Am I wrong in thinking that the amounts of money gained in the movie were a bit exaggerated?
Nevertheless, a very cool story.
3/30/08 11:41 am
Hi everyone,
Yes there were over 200 players at different times. Though I didn’t go to MIT, I played on one of the teams in the early 2000’s. I had been playing solo at a casino and noticed that another person at the table clearly was counting and playing correctly….he noticed me as well. The next day we met up at a pool and that was the start of a great run.
4/2/08 9:16 pm
My dad says his friend Kenny Uston was also an early, successful card counter. Did you gents know him?
4/2/08 9:38 pm
Ken played in the late 1970’s on a team in Vegas formed by Al Francesco. Their team was one of the first to successfully employ spotters and big players, and Ken subsequently wrote a book titled “Million Dollar Blackjack” about his experiences.
When I first played in Las Vegas in 1977-1978, originally with a $1 (one dollar!) unit bet, I saw Ken betting blacks ($100 chips) and counting. I was in awe! I asked him for some advice and I remember he gave me some great tips about strategies, the best casinos to play in, and team play. Little did I know then the scale my own team, the MIT Blackjack Team, would soon become.
4/12/08 9:00 am
Old news, so here goes. Infamous MR.”M” is none other than J.P. Massar, asked Bill Kaplan for help. Mr. Kaplan had already ran a team in Las Vegas and MR. “M” asked for Mr. Kaplan assistance with his team. MR, Kaplan agreed and they got to work. So without notice MIT was around long before John C. So yes, John has a masterful mind, and very, very, very brilliant, but needless to say not the the mastermind behind the MIT team. MIT was around long before John. So to say that Micky Rosa was based on John being the mastermind well, we all know the truth and Micky Rosa = John……….NOT!!!!!!
4/13/08 7:29 pm
This movie stinks just like “The Firm”, why??? If this guiy was so smart what so many dumb moves like keep going to Vegas, not changing the signs, going to over and over to Vegas with the same people, keeping money in his Dorm Room, just a dumb ass. Just like John Grisham “The Firm” How does Top Law Student from Harvard end up working for a Mob Firm? If he is so smart why no research on the firm that will employ him??? Does not make any sense!
4/24/08 7:55 am
I am here because a freind said its a true story of an asian guy….I am glad thats wasn’t me, usually I count 4 decks of the cards, and alway sit on the last seat of the row so I can see the other player’s card, its only improved the odd, you still need lucks. I don’t count 10,j,q,K as individual. I counted them as 64 numbers in catagory D, 6 to 9 = 64 numbers in catagory C, 3 to 5 = 48 numbers in catagory B, and Ace & 2 = 32 numbers in catagory A. Total 208 numbers all together
Its only work on the non resuffer dealer, normally the high bet table. Lets say I have been betting small by myself at minimum, the dealer was gonna deal for one more hand and was about to resuffer, so the very last hand before resuffer, I placed a very big bet, I already count 57D, 32C, 41B, 27A. Total of 158 card counts, included all the player sat before me and my cards. My turn to draw a card, I have J and 2. Dealer have the 6. If the closed card = D, the chance of dealer drawing the next card are mostly C catagory which is 6 to 9 chance are 32 out of 50 included the catagory D which make it chance of 38 out of 50 the dealer will die. Chance for the dealer to survive is less than 24 pct. and as for me I have a hugh chance of survival, to get another 10 its 6 out of 50 I would lose, and there are many cards in catagory C left, which is 6 to 9. so I figured I would get to 18 to 21 with the chance of 32 cards out of 50 in deck. I double up my money, people said I am crazy because I have 12, and dealer have 6 as their face card. Bascially I ignored all of them, I bet on the odd and double up , I got the 8, so I have total of 20, I went “phew lucky” . Now here is the problem where the dealer flip the card over, its was an a 2. Dealer got 8. from that moment I knew I already won, based on the odd Dealer 3rd cards = 8 again, total 16, dealer was force to draw one more, now drew a 9, total 25. I observe the game with small bet till every 30 minutes, I only bet big if I see the odd can be crack, like the catagory C. if all of them have same pct, I will bet small, lets the deal resuffer, and try again every 30 minutes. If someone can count exactly all 13 numbers..they can make a lot of money by themself, my brain = dumb, therefore I can only count 4 group of numbers. I asked the dealer if I can use paper and pencil while playing blackjack. They said no cell, no paper, no pencil, if paper and pencil, I could of write down all the #…..or a caculator haha. I am writing this because the movie 21 is so simliar, but done by group of 4 people, each person can count 1 to 3, 4 to 6, 7 to 9, 10+. The easiest one should be the 10 +, more card, but easier to keep trace, since all card goes by 10. I haven’t watch the movie, but read story about it, from what I see, each player would signal how many cards are out for each number, so the next person can bet on the odd before drawing. I wish I have a group like that, trust is the problem for me.
everything is based on lucks still…the odd just boost little more percentage of winning thats it. I am not alway successful, I bet big last hand about almost 200 times, total I lose is exactly 32 times. I can’t remember how many times I won, but I remembered exactly how many time I loss, its a lesson for me. and each bet + double up is almost as much as a used car.
4/24/08 8:09 am
I remembered this one dude sat next to me, I was betting big….while he bet $200, I want to force more cards out of the deck, the guy sat next to me have a huge chance of losing if he draw a card, if stay he could of win, but I wanted him to force another card out of the deck so I can caculate the percentage. I told him, go ahead and draw, he went “are you crazy…I got 18, the dealer got 7″.. I gave my chip to him. I say. you are in win/win situtation. If you lose, you can have my $400 chip, if you win, you get from the dealer. beacuse I was more worried about my bet. So he got the Q….he lose, which I was very worried. beacuse I have 13. beacuse the percentage of D catagory is very high, I know the dealer will have 17 for sure. to draw a catagory C card is less than 30 pct, D alone is over 40 pct, and a/b 30 pct. I draw a catagory C card a #6….I got 19, deal flipped card over, its was a 10, 17. that dude save me, its was a pure luck, since that time, something pop in my head…”I need a team….team of 4…..no 5 people, cover the whole table………I sit here last and bet big, and the rest sit before me bet minimum to control the cards for me”….till this movie 21 came out, I gave up my ideas on the team.
4/26/08 6:31 pm
Where can I find the real rules of the counting method they used???
4/27/08 1:15 pm
The character, Micky Rosa, Who is he in real life????
4/28/08 11:39 pm
Can anyone who knows the story really close or even participated in it (that’d be fantastic) contact me via email: annsobol@ua.fm
will be looking forward!
5/14/08 9:43 am
I have watched the film and have tried to research about counting i have the hi lo system cracked all but the betting amounts in relation to a true count worked off off the running count. i am from the uk and frequent a six deck 1 bj table casino. i would appreciate it if any of the old mit team (pefferably ones who are succesful and have been listed on the griffin face recognition site) could get in touch via e mail and we could talk about some training (i am willing to pay) kithalliday@london.com The casinos i use over here are very weak on security and do not expect it. i believe i could do it little but often and make a couple of million dollars before having to go out of the uk. Oppurtunity for known american to be paid for teaching and % of a much easier uk market. BUT THE TIME IS NOW as modernization will lead to an american style setup. dATED 14 day 5 month 2008…..pointer gbp=2$