BOOK REVIEW: A Man for All Markets

January 6, 2020 3:54 PM
  • Buddy Frank, CDC Gaming Reports
January 6, 2020 3:54 PM
  • Buddy Frank, CDC Gaming Reports

Edward O. Thorp

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397 pp., Random House, 2017

by Buddy Frank

“A child of the Great Depression, legendary mathematician Edward O. Thorp invented card counting, proving the seemingly impossible: that you could beat the dealer at the blackjack table. As a result, he launched a gambling renaissance. His remarkable success—and mathematically unassailable method—caused such an uproar that casinos altered the rules of the game to thwart him and the legions he inspired. They barred him from their premises, even put his life in jeopardy. Nonetheless, gambling was forever changed.”

With that as the pitch, how could you not want to read this book?

Indeed, Thorp’s name is legendary in blackjack circles. The first two books I ever read on gaming were Richard Epstein’s 1967 Theory of Gambling and Statistical Logic and Thorp’s 1962 Beat the Dealer. If you’re a serious card player, or trying to make a career in the pit, both of these are almost mandatory.

I’m no genius, but I was a university engineering student when I tackled Epstein, so that book may be a bit intimating for those without a strong math background. Thorp’s first book, however, was both instructional and easy to comprehend, which may explain why it’s since sold over a million copies.

This new book is Thorp’s autobiography, and, as such, covers terrain that a straight book on gaming wouldn’t. And the first few chapters seem a bit egotistical, until you read on a bit and learn about the accomplishments of this physicist/mathematician/professor/investment guru. And it still holds some important lessons for our industry.

Thorp’s gaming journey begins in Reno casinos, both big and small, and takes him to Lake Tahoe and on to Las Vegas as his skills improve. All of the imitators after Thorp, incidentally – including the infamous MIT crew documented in Bringing Down the House – simply refined the techniques he pioneered.

You may be unaware that Thorp and his colleagues also pioneered one of the first wearable computers developed to defeat roulette. Using a two-person team – Thorp, wearing wired earbuds to signal bet patterns, and a compatriot with a computer controlled by toe switches – their scheme worked.

That last statement may seem unlikely to those of us who’ve seen countless roulette “strategies” fail in our favor for decades. Thorp used that history to his advantage. They eventually abandoned this path due to hardware problems with the earbud wires and other rule changes. Reading this today, and considering the improvements in wireless technology and miniaturization, it’s worth considering a close reexamination of these strategies to see if they could be hurting us now.

Table game operators will find Chapters 5 through 10 particularly fascinating, as they detail how Thorp developed his card counting techniques and the steps he took to avoid the casinos’ attempts to thwart him.

Some readers may not appreciate much of the book after Chapter 10, since it delves into Wall Street and the investment world. However, it proves that the lessons Thorp learned in the Pit can be applied almost universally.

“Most of what I’ve learned from gambling also is true for investing,” Thorp writes in the last chapter of the book. “People mostly don’t understand risk, reward, and uncertainty. Their investment results could be much better if they did.”

I agree completely. That said, speaking as someone who’s made a good living from the casino side of gaming for decades, I’m grateful that most of our guests still have a foggy understanding of those basic principles.

Thorp later founded the highly successful PMP investment firm and was a leader in the creation of hedge funds, where he made millions.  Along the way, Thorp rubbed elbows with notables like Warren Buffet and encountered legal problems from Rudy Giuliani – most of which, it’s worth noting, were later reversed or dismissed.

Other reviewers have said this book reads like a novel, rather than a biography, and I have to agree. I could barely put the book down. I’m a slot guy by trade, but I’ve always been fascinated by the table games side of our business, and the stories in this book will probably make everyone feel the same way. Thorp, by the way, is in his late 80’s today, but this book, written in 2017, proves he’s still plenty sharp, and that his theories are as relevant today as ever.

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