Using his custom-made computer programs, James Grosjean goes way beyond card counting in beating casino games generally considered impenetrable
A small-town Holiday Inn is not where you expect to find one of the world's most astute and notorious casino gamblers. But James Grosjean doesn't hustle high-roller suites and comped meals at the steak house. With the money he extracts from casinos, Grosjean can buy his own porterhouse and fries. Right now he sits on the edge of a twin bed, in the small room that he shares with his partner on this trip, a part-time folk singer who's nicknamed Pepper and is known as the world's fastest card counter.
Grosjean is slender, unshaven, dressed in jeans and a hoodie. He looks vaguely Asian, but could also pass for Spanish or Native American. His eyes lock on the screen of a laptop computer running numbers that will help him to strategize against a new game, currently in an introductory phase at a riverboat casino near the Holiday Inn. Common wisdom among casino executives holds that the game is safe from advantage players. Grosjean flew here from his home in Las Vegas, armed with more than $100,000, which is stashed in a crevice above the hotel room's TV, and he intends to prove the casino execs wrong.
The game's rules are simple: Prior to a card being exposed, players bet on the suit it will be. If they guess correctly, the money that can be won increases. It goes that way for four additional steps, until you reach the top tier and can win 25 times your original bet or lose it. Grosjean has devised a counting system for the game, which will let him and his partner raise their bets as the shoe of cards becomes weighted toward a particular suit.
This strategy alone allows them to play at an advantage. But, as is his wont, Grosjean has carved out a few other edges: if he can maneuver himself in a way that permits a peak at burn cards, the game's expected value increases. The deeper the dealer cuts the shoe's eight decks, the more of an advantage Grosjean and Pepper can develop. And there may be an additional side count that will add value to the undertaking.
The game's table is situated in a barely trafficked spot on the lower casino floor. With no other players there at the moment, Grosjean and Pepper mosey over, sit down as if they don't know each other, and buy in. Over the next five hours something happens that the casino could not have expected: two players win a total of $2,600. "The max bet in this game was only $100 and some things went wrong," admits Grosjean. "For example, we can maximize the number of cards we see"—which makes for a more accurate count—"by my betting hearts and Pepper betting diamonds when red is strong overall. We didn't do that. But we will." Refinements fall into place for the second session. Grosjean and Pepper employ several dozen physical signals and verbal cues, confirming counts and sharing information, that go undetected by security. They work their way through a terrible downswing when a shoe that is rich in black-suited cards consumes $9,000 worth of wagers. Trying to be helpful, the dealer advises Pepper to change tack. She tells him, "It's a red shoe"—which is based on the fact that one red card after another has been coming out. Unbeknownst to her, of course, the preponderances of reds makes bets on black cards all the more valuable. After hearing the dealer's suggestion, Grosjean stews and thinks to himself, Lady, you have no idea. The two people at your table know more about this game than anyone else on the planet.
But there are nice surprises as well. Some of the burn cards prove to be identifiable, and a new dealer cuts much deeper than she is supposed to. After the smoke clears, Grosjean and his partner have spent a total of 16 hours winning $17,100 from a game that is designed to be a sucker bet. As Grosjean explains with a shrug, "It's a carnival game, so the casino doesn't take it seriously. But, like a lot of carnival games, this one can be exploited."
A Phi Beta Kappa graduate from Harvard University, with a degree in applied mathematics, 40ish James Grosjean has made it his life's work to win money from casinos. He's outlined some of his strategies in a dense treatise called Beyond Counting, which was published in 2000 and sold out of its first printing by 2003. This year he self-published an updated edition, Exhibit CAA, which sells for around a whopping $250. The title refers to what Beyond Counting was called when used as an exhibit in a court trial that arose from imbroglios between Grosjean, Caesars Palace, Imperial Palace and Griffin Detective Agency. Jurors agreed that the casinos' security guards roughed up Grosjean without justification. The result: a six-figure jury reward against Imperial Palace (currently being appealed to the Nevada Supreme Court), an undisclosed settlement with Caesars and Chapter 11 bankruptcy for Griffin, which remains in business and still specializes in catching cheaters and advantage players for the casinos.
Grosjean's skills are so effective that casino personnel were convinced he was cheating. In reality, he makes it a point to avoid cheating at all costs; Grosjean was merely winning by capitalizing on casino shortcomings. It's something that he has a knack for doing. Though he's reaped his largest cash rewards from blackjack (a game at which some casinos have limits as high as $10,000 per hand), his true passion is uncovering games that casinos view as impenetrable and police poorly. Running the math, and using his custom-made computer programs, he finds cracks that can be profitable (often in spite of low betting limits) and difficult to pick off.
It's a modus operandi that has helped Grosjean and his crew to reap millions of dollars by playing stone-cold sucker games that include baccarat, three-card poker, pai gow poker and single-deck blackjack, which is generally viewed as unprofitable for card counters due to low payouts and limits. In these situations, his biggest concern usually centers around whether he wants to win so much, so quickly, that the casino gets suspicious and ultimately corrects exploitable mistakes. One alternative, of course, is to slowly milk a game, taking smaller amounts per session, but keeping the game alive longer.
When Baccalette was introduced at Sam's Town, a Vegas casino favored by locals, Grosjean and a couple of partners took the former approach. "The game was basically roulette, played with cards dealt out of a shoe," recalls Grosjean. "Baccalette was so obviously beatable that if we didn't kill it, somebody else would have. I remember seeing a guy, standing around the table, watching us destroying the game. I'm pretty sure it was the inventor. He looked sicker by the minute." Grosjean considers this for a beat and emits a burst of mad laughter. Then he adds, "I almost felt sorry for him. Almost."
Grosjean distinctly remembers discovering a world beyond card counting. He was in the midst of earning a graduate degree in economics from the University of Chicago. Hitting the local riverboats between classes, he found blackjack games to be countable and profitable. On Halloween day, 1997, Grosjean had a $40 bet on the felt, and the count was slightly positive. The dealer slid him a pair of 8s. She had a 6 showing and he saw a corner of her hole card as she tucked it below the top one. That down card was a Queen. Grosjean split his 8s, ran into a bit of good fortune and wound up with six bets on the single hand. He played his cards exactly as he would have without knowing what the dealer had.
Still, though, it was a revelatory moment. "To know that I would not get burned by the dealer having a 5 in the hole was a great feeling of power; while splitting and doubling, I knew she had a 65 percent chance of busting," he remembers, his voice rising with excitement. "She continued to expose her cards. I nicknamed her Front Loader, and I can say that, to this day, she remains one of the best dealers I've ever had. As recently as a year ago, I played her table, and she is still just as good."
Nearly overnight, Grosjean reconfigured his playing strategy and changed his plans for the future. At that point he had been interviewing with Wall Street firms and nearly landed a position at Goldman Sachs, where he would have been working with an elite crew of statisticians. A dip in the market caused the position to be back-burnered, but Grosjean had already seen bigger possibilities in casinos. He found that the best source for information on what is known as hole carding was a book by blackjack pioneer Ken Uston called Million Dollar Blackjack. It provided tips and stats and claimed that perfect hole carding, under optimal conditions, generated a 9.9 percent advantage. Grosjean recognized this as huge—these days, however, he regularly plays games where he attains upsides of 30 to 60 percent—but he decided to do his own calculations and discovered that Uston had underestimated the edge. Optimal blackjack hole carding could create a mind-blowing 13 percent advantage (as opposed to the maximum of 2 percent generated by straight-ahead card counting). This meant 100 hands of blackjack, with an average bet of, say, $200, would be worth $2,600. But there was a problem: the information one can get is rarely perfect. You might see a corner of a card without knowing exactly what the card is. "Often you only know that it's a 10 or a picture card or an ace," says Grosjean. "So people did a lot of guessing. I figured that there had to be a chart that could be made for partial information."
Grosjean coded software and came up with a proprietary strategy for hole carding with partial information. He worked out a long list of deviations from basic strategy that could be applied against most every imaginable circumstance. The new data gave him a 6 to 9 percent advantage and provided a real-world strategy. Suddenly the notion of working on Wall Street seemed unappealing. He figured that he'd rather play games for a living. During 60 days of hole carding over three months, he made more than $35,000. Grosjean jettisoned from an in-debt grad student to a player with an exponentially expanding bankroll. Then the inevitable happened: Grosjean got banned from the boat.
He felt awful but soon found greener pastures, first in Las Vegas and later in the hundreds of small, independent casinos that have sprouted up across the United States. Not wanting to rely solely on one game, he quickly expanded his repertoire. "I realized that there is nothing special about blackjack," recalls Grosjean, who analyzes games, works with partners who do the serious betting (they're known as Big Players, or BPs, in gambling parlance) and orchestrates their moves through discreet visual and verbal signaling. "Blackjack is a game where cards are supposed to be completely hidden by the casino dealers but, by their error, may not be. Many games fit that description."
However, as Grosjean emphasizes, seeing part of a card is not very profitable unless you can capitalize on the information. "Without the right chart, if you're doing a lot of guesswork, you may have a 1.5 percent edge," he says. "But that's not enough. So many bad things can happen with that small of an advantage."
In recalling one of his great exploits, Grosjean looks back to a seemingly innocuous single-deck blackjack game being dealt at the MGM Grand in Las Vegas. During his career, Grosjean recalls 10 instances in which he and his group won more than $100,000 during a single session of play. Two of those sessions took place during his run at the MGM, the bigger of which yielded $225,000.
Thanks to a Chinese woman who had a habit of dealing cards high, Grosjean was able to get a very good read on what she held. The game was a gold mine. Even better, Grosjean cultivated a source inside the casino. So he knew where his favorite dealer would be each evening. With that knowledge, he had players locking up the all-important last seat—from which Grosjean could spot cards and run plays while making minimum bets and keeping himself protected from casino wrath. "If all goes well, no one looks at me," says Grosjean, who, just in case, has been known to wear one set of clothing over another. A quick-change session in the men's room can instantly make him difficult to identify.
At the MGM, Grosjean estimates that his crew hit this particular dealer 12 times and earned more than $500,000 during 90 or so hours of play. Through it all, there was no heat from casino security. But other teams got wind of this profit center, played without subtlety (say, hitting a 19 when the dealer had a 20), and it became clear that this great game would soon burn out. More importantly, says Grosjean, "The way they were playing, the casino would quickly recognize what was going on, and that could bring heat on our Big Player. So we shut the game down ourselves, rather than waiting for MGM to do it." The team enlisted a Chinese friend to tell the dealer, in her native tongue, that she was exposing cards. "The dealer got a doctor's note, saying that she had carpal tunnel syndrome and couldn't deal pitch games anymore." The casino moved her to baccarat, the Big Player maintained his clean status and Grosjean resumed his search for the next great game.
While Grosjean's financial results are unquestionably impressive, he can be a polarizing figure. Despite the legitimacy of his techniques—the Supreme Court of Nevada has declared hole carding legal—there are some in the blackjack world who look down on Grosjean's endless quest to find sloppy dealers. Not surprisingly, casino executives are completely unimpressed by the advantage player's tireless work ethic. Their feelings are pretty well summed up by the way Palms boss George Maloof responds to me when I mention hole carding: "Oh, you mean cheating?"
But Grosjean would have it no other way. When I ask him to compare himself to the typical card counter, he sharply replies, "There are some people who think that the average card counter is the equivalent of a chimpanzee and I am a fully evolved human. But that's not quite accurate. In reality, card counters are more like salamanders just crawling onto land—even though they think they're swinging through the trees."
Despite the crowing, he may have a point about his superiority. John Chang, the former MIT blackjack team leader, on whom the Kevin Spacey character in 21 was partly based, marvels over Grosjean's abilities. Chang characterizes Grosjean as the best at analyzing and targeting games. "He's always running numbers and scouting," says Chang, acknowledging that Grosjean can pull off mental gymnastics on the fly, in a busy casino, at a level that no one else can touch. Sounding amused, Chang remembers the time that his card-counting wife, Laurie, assisted Grosjean with one of his plays. "James paid Laurie for the work and he said, 'Hopefully this will support your gambling habit for a while.' James was referring to card counting."
The Changs took it in good humor. Others don't, and Grosjean doesn't seem bothered. You almost get the feeling that he's too busy to care, too single-minded in his pursuits to slow down and let anything get in the way. After telling me his goal—to have a single-session $100,000 score for each individual advantage-playing procedure he knows—Grosjean reveals a downside to his moneymaking mania. He remembers spending one Christmas alone, exploiting games at a particularly divey downtown Vegas casino, and he is practically bragging when he tells me, "The number of dumpy casinos I've been to in the United States is scary."
Then Grosjean turns it down a notch and explains, "You don't know whether or not a game is good until you get out there and play it. You find really good games in unexpected places. If somebody called me right now and told me about a game, I'd pack my bags, head to the airport and fly to some hick town." He smiles tightly and adds, "For the right games, I go to places where cell phones don't work."