MIT Blackjack Team

The MIT Blackjack Team was a group of students and ex-students from the Massachusetts Institute of Technology, Harvard Business School, Harvard University, and other leading colleges who utilized card-counting techniques and more sophisticated strategies to beat casinos at blackjack worldwide. The team and its successors operated from 1979 through the beginning of the 21st century.

Blackjack and card counting

Main article: Card counting

Blackjack is one of the casino table games that can be legally beaten by a skilled player. Beyond the basic strategy of when to hit and when to stand, individual players can use card counting, shuffle tracking and/or hole carding to improve their odds. Since the early 1960s a large number of card counting schemes have been published, and casinos have adjusted the rules of play in an attempt to counter the most popular methods.

The origins of blackjack play at MIT

The origin of blackjack play at MIT was a mini-course called 'How to Gamble if You Must', taught in January 1979 at MIT over what is known as Independent Activities Period (IAP). A number of MIT students from living groups in the Burton House dorm known as Burton V and Conner III, who often played penny-ante poker with each other, attended this course and learned about blackjack and card counting methods.

Determined to put their newly-discovered knowledge to work, the group resolved to travel to Atlantic City in the spring of 1979 to win their fortunes. Failing miserably in this endeavor, the group went their separate ways when most of them graduated in May, but two members maintained an avid interest in card counting. These people decided to give their own IAP course on card counting in January 1980, and created a course-listing in the MIT Independent Activities Period Guide, published in early November of 1979.

In late November of 1979 an MIT student known as 'Dave' contacted JP Massar (a recent MIT graduate, and one of the original organizers of the aforementioned trip to Atlantic City), and proposed forming a new group to travel to Atlantic City and take advantage of the New Jersey Casino Control Commission's recent ruling that made it illegal for the Atlantic City casinos to bar card counters.

Consisting of four players and an investor who put up most of its $5,000 in capital, the students went to Atlantic City in late December to play. The players held their January IAP course and recruited a number of additional MIT students as players. The players had a few winning weekends initially but then sustained consistent losses through May 1980. Frustrated and bewildered by their results at the tables, the students' interest in playing dwindled as they questioned their ability to beat the game in real-life.

"Mr. M" Meets Bill Kaplan, Harvard MBA with a Las Vegas blackjack team of his own

In May 1980, one of the original MIT players, J.P. Massar ("Mr. M" as he is known in the History Channel documentary on the MIT Blackjack Team) overheard a conversation about professional blackjack at a Cambridge Chinese restaurant. JP introduced himself to the speaker, Bill Kaplan, a 1980 Harvard MBA graduate who had been running a successful blackjack team based in Las Vegas for the prior three years. Kaplan had earned his BA at Harvard in 1977 and deferred his admission to Harvard Business School for a year, during which time he moved to Las Vegas and formed a team of blackjack players based on his research and own statistical analysis of the game. Staked by the funds he received upon graduation as Harvard's outstanding scholar-athlete, Kaplan generated a 35+ fold rate of return in less than 9 months of play during this "year off."

Kaplan continued to run his Las Vegas blackjack team as a sideline while attending Harvard Business School but, by the time of his graduation in May 1980, the players were so "burnt out" in Nevada, they were forced to hit the international circuit. Not feeling he could continue to manage the team successfully while they traveled throughout Europe and elsewhere, encountering different rules, playing conditions, and casino practices, Kaplan parted ways with his teammates, who then splintered into multiple small playing teams in pursuit of more favorable conditions throughout the world.

Kaplan observes Massar and his friends in action

After meeting Kaplan in a Chinese restaurant in Cambridge and hearing about his blackjack successes, Massar asked Kaplan if he was interested in going with a few of Massar's blackjack-playing friends to Atlantic City to observe their play, in the hopes of figuring out what they were doing wrong. Given the fortuitous timing (Kaplan's parting with his Las Vegas team), he agreed to go in the hopes of putting together a new local team that he could train and manage.

Kaplan observed Massar and three or four of his friends playing for a weekend in Atlantic City. The trip was a disaster. Each of the players used a different card counting strategy, each equally complicated. Their consistent counting, playing, and betting errors resulted in their approaching and playing the game with a negative expectation. Moreover, the players spent the majority of the weekend arguing over unimportant mathematical formulae and consequently put in very few playing hours at the tables. Upon returning to Cambridge, Kaplan detailed the problems he observed to Massar, which accounted for the losses the MIT players had been sustaining.

Kaplan agrees to capitalize a new team

Kaplan said he would back a team but it had to be run as a business with formal management procedures, a required counting and betting system, strict training and player approval processes, and careful tracking of all casino play. A couple of the players were initially averse to the idea. They had no interest in having to learn a new playing system, being put through "trial by fire" checkout procedures before being approved to play, being supervised in the casinos, or having to fill out detailed player sheets (i.e. casino, cash in and cash out totals, time period, betting strategy and limits, etc.) for every playing session. However, their keen interest in the game coupled with Kaplan's successful track record won out.

The first MIT Blackjack "bank" is started

Thus, the first highly capitalized "bank" of the MIT Blackjack Team was started on August 1, 1980. The investment stake was $89,000, with investors including Kaplan's college roommate and a number of his HBS sectionmates, a couple of whom have now gone on to become successful private equity managers. Ten players, including Kaplan and Massar, played on this bank. Ten weeks later they had more than doubled the original stake. Profits per hour played at the tables were $162.50, statistically equivalent to the projected rate of $170/hour detailed in the investor offering prospectus. Per the terms of the investment offering, players and investors split the profits with players paid in proportion to their playing hours and computer simulated win rates. Over the ten week period of this first bank, players, mostly undergraduates, earned an average of over $80/hour while investors achieved an annualized return in excess of 250 percent.

Strategy and techniques

The team often recruited students through flyers posted around campus. The team tested potential members to find out if they were suitable candidates and, if they were, the team thoroughly trained the new members for free. A fully-trained player had to pass an intense "trial by fire," consisting of playing through 8-10 six-deck shoes with almost perfect play, then undergoing further training, supervision, and similar check-outs in actual casino play until they could become full stakes players.

The group combined the individual player advantages with a team approach of counters and players to maximize any opportunities and disguise the betting patterns card counting produces. In a 2002 interview in Blackjack Forum magazine, John Chang, an MIT undergrad trained by JP and Kaplan in the early 1980s (and MIT team co-manager in the late 1980s and 1990s), reported that, in addition to classic card counting and blackjack team techniques, at various times the group used advanced shuffle and ace tracking techniques. While the MIT team's card counting techniques can give players an overall edge of about 2 percent, some of the MIT team's methods have been established as gaining players an overall edge of about 4 percent. In his interview, Chang reported that the MIT team had difficulty attaining such edges in actual play, and their overall results had been best with straight card counting.

The MIT Team's approach was originally developed by Al Francesco, elected by professional gamblers as one of the original seven inductees into the Blackjack Hall of Fame. Blackjack team play was first written about by Ken Uston, an early member of Al Francesco's teams. Uston's book on blackjack team play, Million Dollar Blackjack, was published shortly before the founding of the first MIT team. Kaplan enhanced Francesco's team methods and used them for the MIT team. The team concept enabled players and investors to leverage both their time and money, reducing their "risk of ruin" while also making it more difficult for casinos to detect card counting at their tables.

Team history, 1980-1990

The MIT Blackjack Team continued to play throughout the 1980s, growing to as many as 35 players in 1984 with a capitalization of as much as $350,000. Having played and run successful teams since 1977, Kaplan reached a point in late 1984 where he could not show his face in any casino without being followed around by the casino personnel in search of his team members. As a consequence in 1985, he decided to fall back on his growing real estate investment and development company, his "day job" since 1980, and stopped playing for and managing the team. He continued on for another year or so as an investor in the team, now being run by Massar, Chang, and others, but interest in the team waned through the late 1980s when casino conditions, player exhaustion, and other factors caused the group to stop playing.

Strategic Investments, 1992-1993

In 1992, Bill Kaplan, JP Massar, and John Chang, a player who joined the team in 1982, decided to capitalize on the opening of Foxwoods Casino in nearby Connecticut, which they planned to use as a training ground for new players. Acting as the General Partner, they formed a Massachusetts Limited Partnership in June 1982 called Strategic Investments to bankroll the new team. Structured similar to the numerous real estate development limited partnerships Kaplan had formed, the limited partnership raised a million dollars, significantly more money than any of their previous teams. Coincident with this new funding, the three general partners ramped up their recruitment and training efforts to capitalize on the opportunity.

The MIT Team grew to nearly 80 players, including groups and players located in Cambridge, New York, New Jersey, Pennsylvania, California, Illinois, and Washington. At various times, there were nearly 30 players playing simultaneously at different casinos around the world, including Indian casinos throughout the country, Las Vegas, Atlantic City, Canada, and island locations. Never before had casinos throughout the world seen such an organized and scientific onslaught of their game. While the profits rolled in, so did the "heat" from the casinos and many MIT Team members were identified and barred. These members were replaced by fresh players from MIT, Harvard, and other colleges and companies, and play continued. Eventually, however, investigators hired by casinos realized that many of those they had banned had addresses in or near Cambridge, and the connection to MIT and a formalized team became clear. The detectives obtained copies of recent MIT yearbooks and added photographs from it to their image database.

With many of the top performing players banned, less time on nights and weekends to devote to managing the enterprise, and opportunities in the real estate market that made blackjack team profits pale in comparison, the General Partners decided to end Strategic Investments. On December 31, 1993, they terminated the limited partnership and paid out the winnings to investors and players alike.

Bringing Down the House and Busting Vegas

After the end of Strategic Investments a few of the players split off into two independent groups; the Amphibians who were primarily led by Semyon Dukach and Andy Bloch and the Reptiles who were led by Mike Aponte, Manlio Lopez and Wes Atamian. Each group claims to have done better than the other with additional millions being won from the casinos overall and whilst the nature of their relationship was very competitive, a mutual respect for playing ability always kept them at a level of communication that was at least civil.

A variety of stories, about a few of the players from the MIT Blackjack Team formed the basis of the New York Times bestseller, Bringing Down the House written by Ben Mezrich. Bringing Down the House focused on the exploits of the Reptiles. Mezrich wrote a follow-on book, Busting Vegas, that focused on the Amphibians.

A movie, 21, inspired by Bringing Down the House and produced by and starring Kevin Spacey and Jim Sturgess, was released on March 28, 2008 by Columbia Pictures. Jeff Ma and Henry Houh, former players on the Team, appear in the movie as casino dealers and Bill Kaplan appears in a cameo in the background of the underground Chinese gambling parlor scene.

Several members of the team have used their expertise to start public speaking careers as well as businesses teaching others how to count cards. Members of the two teams, whilst now defunct in any playing sense, continue their competitive history by each offering their own blackjack training courses. Mike Aponte of the Reptiles co-founded a company with former MIT Blackjack Team member David Irvine called the Blackjack Institute. Semyon Dukach of the Amphibians founded Blackjack Science.

In the media

The story of the MIT Blackjack Team in its incarnation as Strategic Investments was told in the documentary Breaking Vegas on The History Channel. The Bringing Down The House period has been featured on an episode of the Game Show Network documentary series, Anything to Win, and HBO Real Sports with Bryant Gumbel (episode 116), and the BBC documentary Making Millions the Easy Way, as part of the renowned 'Horizon' strand directed by Johanna Gibbon. This documentary not only told the story of a Strategic Investments breakaway group, but revealed the science behind the winning formula. Further stories of the team and subsequent playing activity woven together over time are creatively told in the book Bringing Down the House. Bringing Down the House was written by Ben Mezrich, and is now a New York Times Bestseller. The Columbia Pictures film 21, based on the story of the MIT blackjack team, was released on March 28 2008. . A previous film from 2004, The Last Casino, is loosely based on this premise and features 3 students and a professor counting cards in Ontario and Quebec.

The private investigation firm referred to as Plymouth in Bringing Down the House was Griffin Investigations.

External links

• "Newton Man, Bill Kaplan, Provides Inspiration for Kevin Spacey's Character in 21"
• "Chet Curtis Report on NECN: Interview with Bill Kaplan" - video
• "Mike Aponte Talks 21" Raw Vegas - video
• "Math Whiz Breaks The Blackjack Bank" Fox News DC - video
• "Interview with MIT Mike" BlackjackInfo.com
• "The MIT Team's $500,000 Weekend" Midwest Gaming and Travel
• Wired Magazine: Hacking Las Vegas
• BrianX.com article on the team and card counting
• BBC documentary about card counting and the Team
• USA Today Q&A with Bill Kaplan (with photo)