Edward O. Thorp - Pioneer of Blackjack Literature
Edward is an award winning author who is famous for writing the book, "Beat the Dealer," which changed the way players approach card counting in blackjack. He was one of the first authors who was successfully able to prove his card counting methods to be effective through the use of extensive research and mathematical equations.
Edward went on to write a plethora of other books as well, most of which are still read by thousands of people to this day. The most widespread method that he developed and wrote about was called the 10 Count Strategy, but there were many others as well. To learn more about Edward O. Thorp and his revolutionary ideas, please feel free to read this in-depth biography.
Edward's father served in the Army during World War I, and after he returned from service he married a beautiful woman and they decided to start a family. Their one and only son, Edward Thorp, was born in Chicago, Illinois on August 14th, 1932.
Edward's father spent a great deal of time making sure his son was as educated as possible, and his hard work certainly paid off. By age seven, he was able to calculate how many seconds were in a year, without writing anything down. His father continued to educate him as much as possible until he was recruited to serve in World War II. His mother worked second shift at the Douglas Aircraft during this time, as the family was struggling to pay their bills.
Needless to say, Edward didn't have much supervision during his early years, giving him the freedom to experiment with a plethora of different things. His favorite afternoon activity involved toying around with explosives, creating homemade bombs that he would use to put holes in the Palos Verdes wilderness nearby his house. He would also spend his free time using his Ham radio to play chess with opponents over the airwaves. It's obvious to see that he didn't have a typical upbringing.
Edward did go to school during this time, but the teachers in Chicago were under qualified and they didn't create a nurturing learning environment for any of the students. When Edward was ten years old, the family picked up and moved to Lomita, California. His school there was even worse; it was rated 31 out of 32 of the schools in the area.
Edward was finally able to receive the education he deserved during his many years of higher level education. He spent his entire education experience at the University of California - Los Angeles or UCLA. He earned both his Bachelors (1953) and Masters (1955) in Physics from this school, and he didn't stop there.
While working on his Ph. D. he looked into the mathematics behind predicting the outcome of the spins of the roulette wheel; his goal was to dispute the notation that these games couldn't be beat. In between his studies, he worked with an old friend of his, Claude Shannon to build a wearable computer that could be used for both roulette and blackjack. He used this device to further study how math and casino games are connected to each other.
"Although conventional wisdom held that you couldn't beat these games, the outlook was that the wisdom was not necessarily true and, in fact, was probably wrong. Gambling games which were perceived to be efficient- in the financial sense of the word, might not be. In fact, I was convinced this wasn't the case in roulette." said Edward Thorp to the Investment Consulting Journal in January, 2011.
Edward finally obtained his Ph. D in Mathematics in 1958 and upon graduation, he taught classes at UCLA, Massachusetts Institute of Technology, New Mexico State University, and University of California at Irvine. He was asked to teach a variety of subjects including upper level math classes, finance classes, and physics classes. He was still interested in applying mathematics to gambling, but he had a lot more research to do before he could draw any conclusions.
Becoming a Blackjack Expert
After reading a statistical journal on blackjack strategy, Edward decided to apply the concepts written in that article to a real game of blackjack. Edward and his wife spent a long weekend in Las Vegas, where they managed to make a little money at the tables. He realized quickly that there was probably a perfect strategy that could be used to win consistently at the tables, and he was determined to discover exactly what that strategy entailed.
Using that article and his own research, he was able to construct what he believed to be a winning strategy for the game. He taught himself Fortran, a higher level computer program language, so he could use his IBM 704 computer to calculate the formulas needed for basic strategy. It's great that Edward did this when he did, because devices such as these are illegal in all casinos today.
Early on, Edward learned the importance of bankroll management. It became obvious to Edward that he would need a sponsor to provide the starting capital he needed to successfully test his theories. He sought out the help of two private investors who loaned him $10,000 to take with him on their trip to Reno, as they were curious to see if his strategies would actually work. The identities of these two men remain a mystery, but many people believe that they are somehow connected to the mafia.
These three men travelled to Harold's Club and played at the $500 maximum tables, winning an additional $500 in the first fifteen minutes. Edward describes the ups and downs of the weekend in his book, Beat the Dealer, which we talk more about in the sections below. There were moments when he lost a great deal of money through using these methods, but by the end of the three day weekend, Thorp ended up making an $11,000 profit and he never had to ask for more than his original $10,000 investment.
In order to return to casinos where he had made significant amounts of money before, Edward had to use disguises so that casino officials wouldn't know who he was. Some of these disguises included fake beards, wigs, and various glasses. He was also known for dying his hair a certain color or making sure to grow out his beard before he returns to a casino again. He would record everything he wore and did in all of the casinos he visited, so he could ensure that he looked and acted differently the next time around.
Understanding His Methods
The foundation of Edward's strategy was based on one simple observation. In most casino games, what happened in the past has no effect on what will happen in the future. While studying the roulette wheel, he noticed that the previous spin of the roulette wheel has no influence on the result of the next spin. This means the odds stay the same throughout the game. Edward noticed that Blackjack was different, however, as the events of the past directly influence the future events. He quickly recognized that the odds varied from hand to hand, thus creating a way to gain an edge over the casinos through playing this game.
One of Edward's most used methods was his Ten Count System; this involves counting the number of cards valued at 10 that had been dealt. In blackjack, all face cards (kings, queens, and jacks) count as ten on top of the four natural tens that can be found in every deck. Edward's calculations confirmed that when the ratio of tens left in the deck relative to other cards increases, the odds also increase in the player's favor. He sometimes refers to this theory as, "The Law of Large Numbers."
In Edward's book, Beat the Dealer, he talks heavily about the benefits of using this technique, "The advantages this strategy finds for the player generally range from 1 to 10 percent. The large advantages yield heavy winnings. The small advantages give the player camouflage…"
His entire strategy is much more complex, as it involves analyzing both your own hand and the dealer's hand to quickly make accurate calculations that will determine your next move. This will take many hours of practice to master, as it's extremely difficult to do.
Beat the Dealer
Beat the Dealer was originally published in 1962 by Vintage Books. Edward's 200+ page book was filled with advice on all of his most valuable strategies including basic strategy, the simple point count system, the complete point count system, and the 10-count system. He also gives tips on how to spot cheating in casinos and countermeasures players can use to overcome their cheating methods.
This book comes highly rated for those who are interested in blackjack and have background knowledge in mathematics. People appreciate how thorough this book is when it comes to explaining what the strategies are and how they can be used in a brick and mortar casino. Google Books gave, Beat the Dealer, 4 out of 5 stars and said, "Edward O. Thorp is the father of card counting, and in Beat the Dealer he reveals the revolutionary point system that has been successfully used by professional and amateur card players for two generations...Beat the Dealer is the bible for players of this game of chance."
The book sold over 700,000 copies and made the New York Times bestseller list, but some critics were unhappy with Edward's work. They claimed his strategies were hard to implement into actual play in the casinos, essentially making them useless. Edward didn't take these criticisms lightly, so he teamed up with Julian Braun, who had developed hi own blackjack system with similar complaints. They worked alongside each other to re-write their strategies, using a more practical approach. Edward published the updated version of his novel in 1966, and even more copies sold.
Publishing this book was a huge risk for Edward, as the casinos of Las Vegas were still operated by the mafia during this time. If the mafia thought that he was planning to cheat them out of millions of dollars through using his strategies, they would probably send someone to kill him. This is why Edward explains in his book that his findings were made for educational purposes only, and that he never did it for the money. Whether this statement is true or not, the mafia never came after him because of it.
Edward was granted with the great honor of being inducted into the Blackjack Hall of Fame in 2002, for his revolutionary methods that have altered the way both players and casinos view blackjack. The Blackjack Hall of Fame consists of only elite blackjack players and researches, so this is certainly an accomplishment to be proud of.
His Experiences in Puerto Rico
After this book was released the showed called "I've Got A Secret," asked Edward to make a guest appearance on the show to tell their viewers about his book. They told him that a man named Henry Morgan was going to go to Puerto Rico with a bankroll of $200 to test out his methods. This sparked Edward's curiosity, so he decided to tag along. Edward worked alongside Morgan to teach him the point count strategies addressed in his book.
There were many differences between Puerto Rico casinos and Las Vegas casinos that Edward couldn't help but notice. For starters, unlike Las Vegas Casinos that were privately owned and operated, all casinos in Puerto Rico were run by the government, hence making them much stricter. Also, in Puerto Rico Casinos, there were tables with limits ranging from $1- $50, while most casino in Las Vegas have tables with limits ranging from $1- $500. The major difference in Puerto Rican casinos that effected blackjack was that they didn't allow players to double down on soft 11s.
All of these differences made it more challenging for Edward's methods to be effective. Despite all the odds against them, Henry was still able to make two thousand dollars in Puerto Rico that week with the help of Edward's, Beat the Dealer.
Using His Knowledge to Make Wise Investments
After Beat the Dealer became popular, it became very hard for Edward to enter a casino without immediately being thrown out. He decided to take a break from blackjack and started using his mathematical knowledge to make various financial investments. He was able to study the stock market from the eyes of a mathematician to draw conclusions that others would have probably overlooked.
He's well known for his seemingly flawless Black Scholes model that has helped thousands of people across the world make wiser investments. One main principle that Edward always lived by when it came to investing was to look for investment opportunities where the risk involved was relatively low compared to the possible rewards. Edward finally published a book on his findings in 1965 called, Beat the Market.
In addition to that, he formed his owned investment firm called, Edward O. Thorp & Associates. This firm is famous for creating a hedge fund called Princeton/Newport Partners that has yielded a 20 percent rate of return on average for over 28 years now.
Author: Nicole Miller
Updated: July 2016