Thorp is the father of card counting. Not only was he successful using it in real-world situations, he was the one who invented the original system. A mathematics professor who possessed a master’s degree in physics and a doctorate degree in mathematics, he clearly had above-average intelligence.
As an adult in the early 60s, Thorp knew next to nothing about casino games and the world of gambling. But when a friend, Claude Shannon, brought him and his wife to Las Vegas he became interested in blackjack, and after playing the game a number of times became convinced that there was a mathematical way in which the player could gain an advantage.
He studied the game in a systematic method and exhaustively examined every facet of the game. Using a computer owned by the university he taught at, he simulated billions of blackjack hands to delve even further into the mathematics of the game. This computer was so massive it filled an entire room, yet it was less powerful than today’s laptops. Through his calculations and observations he created his system which “accounted for the variations in those (cards) that remained after certain hands were dealt”. Basically, he realized that smaller cards were more advantageous for the dealer and when they left the deck, advantage shifted in the player’s favor so they should bet more. Concurrently, larger cards were more advantageous to the player and when they left the deck the advantage shifted to the house, or dealer, so less money should be bet. Using this method Thorp calculated that the player could own a 1% to 5% advantage over the house.
Thorp and Shannon hit the casinos and would return with their pockets filled with cash. One typical weekend would net $70,000 in today’s money. The gambling industry was no match for Thorp’s flawless execution of his card counting method. After all, card counting did not yet exist to them so they had no idea what was happening. Thorp drew the attention of casino bosses when he began winning unusually high sums and most were convinced he was cheating. They intensely watched him play and studied videotapes of his play, but they could see nothing nefarious occurring. Before long, some casinos asked Thorp to leave because he was simply winning too much, yet they still did not know how he was doing so.
In 1962 Thorp wrote his book “Beat the Dealer” which detailed his card counting “ten count system” and became an instant hit as well as a modern-day classic. With its sales he amassed a pretty handsome fortune. In 1966 he wrote a second edition which expanded on the intricacies of the system. It’s interesting to note that the sudden explosion in card counting worked in favor of the casinos since many people attempting to do it just couldn’t pull it off as effectively as Thorp did. However, his findings and methods have been the basis for every card counting system following, including that of the aforementioned MIT team’s.
Following his gambling exploits, Thorp applied his mathematical genius to the stock market and made a huge fortune in securities and hedge funds. Due to his dominance over the casinos and revolutionary thinking, Thorp was one of the first seven inducted into the Blackjack Hall of Fame.