Edward O. Thorp is one of America’s most famous, and most scholarly gamblers. An American born in August 14th 1932 in Chicago Illinois, he graduated with a PhD in mathematics from the University of California, Los Angeles in 1958 where he later worked as a professor of mathematics.
So, why is Thorp of such interest to the gambling industry? Well, Thorp is the infamous (at least to the casino world) author of the hugely popular gambling strategy book, ‘Beat The Dealer’. This was the first book to showcase how the house advantage that the casino has in Blackjack could be overcome by some relatively simple card counting. The highly mathematical book was published in 1962 to resounding success.
Card counting is a card game strategy used mostly in Blackjack to ascertain the probability of the next hand giving advantage either to the player or to the dealer. legal means to decrease the casino’s house advantage by keeping count of all high and low cards seen. Those who actually come to master the art of card counting are in this way able to bet more on the high value cards and less when the opposite is likely.
During the experimental stages of his theory, Thorp, along with his good friend, Manny Kimmel (who was alternately a successful professional gambler and illegal bookmaker heavily involved with notorious Italian gangsters) providing the initial capital set out to test the theory. Manny put $10,000 on the experimental research itself, sure it would work.
The experimental results were amazingly successful, as the duo won $11,000 in one weekend. He would have most certainly won even more had his uncanny ability at winning not drawn the attention of casino security in the Las Vegas casinos where he had initially ventured out to conduct his research. This led to him being thrown out several times from the casinos he visited that night.
News of his winning antics quickly spread within the close-knit gambling community, with enthusiasts eager to learn new methods of ensuring a win. Thorp predictably became an instant celebrity. His new-found celebrity status led him to pen books like ‘Beat The Dealer’, but he also came up with innovative ways to apply Hedge Fund techniques to financial markets to his benefit, and went on to work with Claude Shannon to create the world’s first wearable computer.