Numerous Hollywood projects have spun tales of a series of people who tricked the financial system despite all those that came before them. I’m specifically thinking of Ocean’s 11, the latest version. Yes, it does contain a few thousand of Hollywood’s cliches such as hacking into a highly developed system within a few seconds, but the one thing it did manage to do–throughout every single one of the movies–was to create an elaborate plan that allowed the gang to slip in and out of the casino with the cash without ever being noticed. I won’t spoil the surprise on how they do it.

A story caught my eye the other day while reading from one of my math textbooks. While the book does not indicate that these two group are similar, they both use basic mathematic knowledge and functions to break down every single move in a supposedly random game. David E. Bock, Paul F.Velleman, and Richard D. DeVeaux’s book Stats: Modeling the World, wrote about a group of students from a Statistics department who decided to take a field trip out to Reno, and more specifically visited the casinos. They wrote the outcomes for every game for a few days then left, and drove back to test if those same numbers would show again. They ended up discovering that some of these numbers were more likely to show up than others. Perhaps this was just a random coincidence thought, right? Actually no.

Per the author’s explanations, rather than trusting the Law of Averages–which suggests that an event is due after numerous other events occurred, for example, you flip seven heads on a coin, you are now “due” for a tails, which is not true!–the students instead used LLN–which suggests–and placed money on the numbers that had already shown up. They ended up walking off with $50,000 in cash but were told to never show their faces again.

But a group of former MIT and other well-known university students took it to the next level when they walked into casinos worldwide and walked out others with thousands of dollars of cash. How did they do it? To put it simply, they used math.

It all began in the 1970s when six members of the Burton-Conner House at MIT taught themselves how to card count. The basic idea of card counting follows; a low card is usually bad and a high card is good, and since the cards already present at the last shuffle could not be drawn, the player “can determine the highs and lows already drawn.”

Using these newfound skills, the group traveled to Atlantic City during their spring break to win a fortune. Two from the original group, J.P. Massar, aka “Mr. M” and Jonathan, even created a course on blackjack for MIT’s 1980 IAP.

After seeing the notice for the class, professional blackjack player Dave (last name not known) contacted Massar and offered to form a new group with the agenda to “take advantage” of New Jersey’s Casino Control Commission rule that made it illegal for Atlantic City casinos to ban card counters; they instead put in place methods such as shuffling the cards earlier, using more cards, and offering games that had bad rules to destroy the advantages that card counting had.
And so, a new group of four players (along with others recruited from the class), the gambler, and an investor who piled in their $5,000 in capital trekked to Atlantic City. They played in the months spanning from December to May, increasing their initial capita fourfold.

After overhearing a conversation about professional blackjack in a restaurant in Cambridge, Massar would meet Bill Kaplan, a Harvard MBA graduate who also ran a successful blackjack team in Las Vegas. Eventually, his team would split off into multiple groups after feeling “burnt out” from Nevada. But after observing Massar and his team’s strategies, Kaplan pointed out numerous issues to Massar that’d affect the team’s winning rates as a whole.

The MIT Blackjack Team would run 22 partnerships spanning from 1979 to 1989, with at least 70 people on the team. According to Wikipedia, every partnership was “profitable”, with the player’s and managers’ salaries ranging from 4%/year to over 300%/year.

Then, in 1992 the somewhat large group planned to go even larger. Bill Kaplan, J.P. Massar, and John Chang (an MIT undergrad who joined the team in late 1980) planned to profit off of the opening of Foxwoods Casino in Connecticut while training new players. These men later founded a Massachusetts limited Partnership in June named “Strategic Investments”–this ended up raising millions of dollars based on Edward Thorp’s high-low system. The system goes as follows: three players, a big player, a controller, and a spotter, would create a networking system while playing the game. The spotter would watch as the deck went positive with card counting, and the controller bet constantly, washing away money, while the controller would be watching for a positive. When they found one, they signal the big player and make a massive bet, winning big.

The group grew astoundingly, and at times there would be 30 players playing simultaneously in worldwide casinos such as Las Vegas, Atlantic City, Canada, Native American casinos throughout the country, and those located on islands. But as the money began to stack up, so did the anger from casinos who had never seen “such an organized and scientific onslaught directed at the game.” Many of its leading players were identified and barred from the games, and eventually, Strategic Investments paid out its earnings to players and investors and dissolved in 1993.

But who’s to say that that was the end of such groups? A few of the remaining players from Strategic Investments split off into two groups; The Amphibians and the Reptiles. The Amphibians were led by Seymon Dukach, who was the big player, Katie Lilienkamp, the controller, and Andy Block, the spotter. The Reptiles were led by Mike Aponte, Manilo Lopez, and Wes Atamian. These groups even had million-dollar banks and 50+ players at times according to Wikipedia.

But by 2000, the MIT Blackjack Teams eventually faded away as its members pursued other hobbies and interests.