Remember that guy who took AC for millions?

J

johndoe

Well-Known Member
#1
#1
As speculated here, it's confirmed that he took advantage of loss rebates.

http://www.bjinsider.com/newsletter_138_johnson.shtml

20% of $500k daily losses rebated, without restriction! That's one hell of an edge! I'm very impressed (and surprised) that he was able to convince so many stores to go along with that.

Johnson said he was not required to play a specified length of time or number of hands. "There were no parameters on that. If you suffered a loss of $500,000, you got 20 percent back. It could have happened in the first five hands. I would have left, came back the next day, and started over. I would have gotten the discount starting over again. Under those rules, long term they can’t win, he said. They’ve changed that. They’ve corrected their error, and I’ve got to think about it now. The game isn’t nearly as good as it was."
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KenSmith

KenSmith

Administrator
Staff member
#4
#4
johndoe said:
I'm very impressed (and surprised) that he was able to convince so many stores to go along with that.
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It is truly amazing that people whose entire business is gambling are generally idiots when it comes to understanding the games.
 
A

alwayssplitaces

Well-Known Member
#6
#6
He's set for life now! I knew he had to have a system to sustain his winnings across multiple Atlantic City casinos. But it seemed weird he was winning big in AC and didn't go to Vegas and use his system there.

It's a combination of skill and luck. Many gamblers won't stop soon if they're winning, but they'll leave if they're losing. They think that allows them to win more than they lose, but that's not true since the house edge will grind them down. This guy did the same thing, except that he didn't have to pay the full amount of his losses and he kept 100% of his wins. The casinos loved to see him play since he flat bet $100K, didn't count cards, and played other games.

If I had this advantage, I would not milk it over a long time, I'd hit the casinos hard like he did since the promo won't be there forever. It's nice he hit them so hard they showed a loss for the month.
 
T

tthree

Banned
#7
#7
alwayssplitaces said:
He's set for life now! I knew he had to have a system to sustain his winnings across multiple Atlantic City casinos. But it seemed weird he was winning big in AC and didn't go to Vegas and use his system there.

It's a combination of skill and luck. Many gamblers won't stop soon if they're winning, but they'll leave if they're losing. They think that allows them to win more than they lose, but that's not true since the house edge will grind them down. This guy did the same thing, except that he didn't have to pay the full amount of his losses and he kept 100% of his wins. The casinos loved to see him play since he flat bet $100K, didn't count cards, and played other games.

If I had this advantage, I would not milk it over a long time, I'd hit the casinos hard like he did since the promo won't be there forever. It's nice he hit them so hard they showed a loss for the month.
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I don't think you read the second link. His advantage started at almost 10% and shrank with each hand he played. On the ninth hand it was 2.42%. After 650 hands the house has a very small edge. He was best off playing a few shoes at a time at most. It sounded like his really big scores were from a shoe or two. He no doubt locked up those wins from short sessions so his daily rebate would be more valuable. If he was not much ahead maybe he played a longer session.

Hit your loss rebate or clock a win.
 
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P

pit15

Well-Known Member
#8
#8
The part about how new jersey wants him to pay taxes on his wins is exactly why he should've kept his mouth shut. Casinos generally will not release information about their high rollers, and if he didn't go blabbing about it nobody would bug him.
 
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alwayssplitaces

Well-Known Member
#9
#9
He could go and play just 5-10 hands and either win or lose $500,000. He quits when he wins $500K or when he loses $500K. He only had to pay $400K when he booked a $500K loss and got to keep his entire $500K win. The house edge of the game is negligible compared to the edge from the loss rebate, so we can assume half his sessions were +500K and half were -400K. He would expect to make $50K each session.
 
sagefr0g

sagefr0g

Well-Known Member
#12
#12
zengrifter said:
Does anyone have the formula to calc when a loss-rebate makes a +EV game? zg
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i dunno, just trying to fudge a guess here for the particular example of the OP........
say it was a genuine even money zero edge game but a 20% rebate was offered and you could quit when you want.
for every $100 won you could quit and keep $100 so you're up $100
for every $100 lost you could quit and get $20 back so you're down $80
so on average playing this game over and over you'd be up $20 for every two plays made @$100/bet or up $10 on average for each play.
but if instead of a zero edge game the house had an edge you'd just sum the house edge per play with the $10/ play result to get what your result was for a play on average.
i guess the fatal flaw for the casino was letting the guy quit when he wanted to with the rebate offer structured as it was and such a low house edge with variance being what it can be.
just my fudge guess here, did i screw this up?:confused::whip:
 
zengrifter

zengrifter

Banned
#14
#14
KenSmith said:
Exhibit CAA has a chapter or two about this.
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Scan to PDF and send via PM, please.

Anyone else - what is the simple rule-of-thumb for BJ? zg

Ps - THIS is how Kerry Packer took several casinos in LV for low 9-figures in 2000. Playing BS, 5 tables, all spots, $100k per hand, loss rebates.
 
FLASH1296

FLASH1296

Well-Known Member
#15
#15
"He could go and play just 5-10 hands and either win or lose $500,000. He quits when he wins $500K or when he loses $500K. He only had to pay $400K when he booked a $500K loss and got to keep his entire $500K win."

Wrong.

If he did that the deal would have been nixed in very short order, Think about it.
 
sagefr0g

sagefr0g

Well-Known Member
#17
#17
zengrifter said:
...
Anyone else - what is the simple rule-of-thumb for BJ? zg

....
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a coin toss where the player bets $1000 per toss, and pays a upfront commission of $5 per toss is supposed to be a crude approximation of a -0.5% blackjack game. from there you should be able to get an idea of how lucrative a loss rebate could be.
how variance works into the problem, i dunno. but my guess, variance is a factor as far as how many toss's are optimal, apparently that's part of where the subject of the OP had it going on, he could pick and choose when to quit or continue play.
 
FLASH1296

FLASH1296

Well-Known Member
#18
#18
In reference to Exhibit CAA, Z.G. asked:

"Flash - how long before you post the new the book to your Yahoo repository?

My response: Four days after you lend me your copy of the book.
 
N

Nynefingers

Well-Known Member
#20
#20
sagefr0g said:
i dunno, just trying to fudge a guess here for the particular example of the OP........
say it was a genuine even money zero edge game but a 20% rebate was offered and you could quit when you want.
for every $100 won you could quit and keep $100 so you're up $100
for every $100 lost you could quit and get $20 back so you're down $80
so on average playing this game over and over you'd be up $20 for every two plays made @$100/bet or up $10 on average for each play.
but if instead of a zero edge game the house had an edge you'd just sum the house edge per play with the $10/ play result to get what your result was for a play on average.
i guess the fatal flaw for the casino was letting the guy quit when he wanted to with the rebate offer structured as it was and such a low house edge with variance being what it can be.
just my fudge guess here, did i screw this up?:confused::whip:
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Sage, you are correct if you only make one play, starting with $100 and double it or bust. However, if you decide ahead of time to double it twice or bust, the math looks like this: 75% of the time you lose $100, 25% of the time you win $300. Since your $100 loss is actually an $80 loss, the EV is 0.75*(-80)+0.25*300, or +$15. That's $5 better than your example. Likewise, if your target is to double up 3 times or go bust, the EV is 0.875*(-80)+0.125*700=+$17.50. As you increase your target, you will approach an EV of +$20, which is equal to the loss rebate (because this is a fair game). The higher the house edge on your play, the lower your target will be, and vice versa. Exhibit CAA includes some examples and has tables of optimum targets to maximize EV for several different games and several types of bonuses, but if I remember correctly, all of the examples deal with loss rebates that are limited. The math is more complicated if, as apparently was the case with Mr. Johnson's case, the loss rebate does not have a maximum. Then you have to set a maximum win and loss and optimize them together. If you are ahead $500k, is it worth it to keep betting knowing that if you lose $1M or more (from this point), you'll get a 20% rebate on all but $500k of it? If you are down $1M, is it worth it to keep betting knowing that your bets are basically worth 80% of face value until after you win at least $1M (from where you are at this point), at which time wins will then be worth 100% of face value? (Think of it as betting $80k per hand, but getting a 25% bonus on wins that exceed $800k.) What if it's early in the day and you're at your last casino of the day that gives you this deal versus being in the first casino of the day and it's already getting late? How does the increased EV that one option might give you compare to the average time it might consume, during which you could be at the next casino doing the same thing? This is a complicated deal to analyze, but if Mr. Johnson's business dealt with creating gambling-related software, I don't doubt that he had scrutinized this deal pretty thoroughly.

Overall, I'm pretty intrigued with what he was able to pull off. I love when people figure out how to hammer the casinos for large sums, especially by taking advantage of their greed. I know that taking advantage of loss rebates isn't exactly a new concept, but that makes it all the more interesting to me that he was able to get so many concessions from the casinos, who he undoubtedly had competing against one another for who could give him the best deal.
 
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