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Preface As a rule, people derive considerable pleasure from playing games. After all, games provide intellectual stimulus, diversion and escape, a testing of fate, and the opportunity to just play. But games played for money can be even more enjoyable, exciting, and challenging. The desire to win a contest of wits or luck is reinforced by the desire to win money. Also, even though for many people the primary motivation to gamble is not winning money but rather the entertainment to be derived, money nevertheless still plays an important— often a dominant role. Money is a way of keeping score, as well as a reward for good play, or punishment for bad. Winning is a pat on the back; losing a slap in the face. One definition of "gambling" is the participation in activities involving chance, consideration and prize where—on average—the player will lose. By implication, similar activities where—on average—the player will win could be considered "investments." If one accepts this distinction, then many of the articles presented here are about investing rather than gambling. They are by and large dedicated to the theme of transforming gambles into investments by legal means, by the application of mathematical, scientific, and intellectual effort, under the terms and rules dictated by the organizer of the game. The preoccupation of this book is casino wagers. Most casino gaming opportunities do not lend themselves to successful strategizing, as they are—in the main—"fixed odds" gambles that provide no real opportunity for strategic decision-making either in bet sizing or in the play of the contest. In such wagers, a player's long-term fate is strictly a function of the aggregate amount of money bet and the theoretical expectation of the wagers placed. Thus, whether the player is an astrophysicist, a mailman or a homeless person, performance is determined only by the fundamental probability structures of the wagers, and is insensitive to even the most clever analysis. Intelligence and mental efforts, however diligently applied, cannot make a whit's difference. It was in this spirit that Peter Griffin remarked: "There is no such thing as a 'good' roulette player. Being a good roulette player is like being a good smoker." However, within the casino, there are a few exceptions. Some exploitable opportunities permit the transformation of a game or device that might initially present an interesting or entertaining gamble to one that offers a potentially good investment. Blackjack—a game rich in strategic options in both the sizing of bets and the play of the cards—heads the list. Because blackjack is typically played with a finite number of cards, drawn without replacement, and revealed to players in the course of play, underlying probability changes can be tracked and estimated. That information can then be exploited to a player's advantage. More subtly, non-random variations in the shuffle of the cards can also provide useful information for the player able to spot such patterns. Blackjack has long been the most popular table game in American casinos and much of its popularity can be traced to the intellectual revolution sparked in the early 1960s by Dr. Edward Thorp and his break-through book, Beat the Dealer. Mathematical analysis of blackjack, with its roots in deductive analysis and computer simulation, has evolved substantially over the past four decades, but the insights and framework provided by Dr. Thorp in his seminal work remain the foundation from which virtually all other researchers have built. This collection obviously benefits from the included works of Edward Thorp, who has graciously contributed papers on the Kelly criterion, on the stability of basic strategy blackjack player expectation, and—in a co-authored piece with Peter Griffin—on the consequences of a casino getting the math wrong in their own blackjack games. The editors are honored to bring Dr. Thorp's insights and analysis to a new audience. When Edward Thorp shifted his interest from blackjack to financial markets and other topics awaiting mathematical clarity, the mantle of leadership in probing the mysteries of blackjack was picked up by Professor Peter Griffin. In his precise and clever way, Peter provided the last word on the theory of blackjack in The Theory of Blackjack. In his various contributions from the 1970s until his untimely death in 1998, Peter Griffin became the ultimate authority for the legions of players who had become the modern "wise guys," looking for the edge from the other side of the green baize. In this volume, Griffin offers contributions that dabble with mathematical issues and puzzles in the games of blackjack, Caribbean Stud and Two-Up. These papers represent excellent illustrations of both his precision and his wit. A new generation of analysts with interesting perspectives on casino games and wagers has come on the scene in recent years, and some of their work is reflected here. For example, Vancura uses artificial intelligence—in the form of neural network analysis—as the basis for an experiment to see if a computer can "learn" how to play basic strategy blackjack. Though it is unlikely that computers will soon begin to pull up seats at the blackjack table, order their Heinekens, and attempt to beat the dealer, the implications of this approach go well beyond blackjack. This article demonstrates that computers can discover optimal strategy in a complex game against a fixed set of rules of play. This also suggests that similar methodology can be applied to less structured betting environments, such as horse racing and sports betting, as well as interactive strategic games, such as poker. Blackjack is not the only place to find an edge in a casino, nor is it the only game to attract serious scientific analysis by mathematicians. Other articles to be found herein cover such topics as the game of pai gow, tournament play at blackjack, strategy at video poker, potential new side wagers at craps and blackjack, the new casino game of Double Hand Marquez, and a theory of card room play. There are even attempts to look for exploitable opportunities at roulette and at the craps table. Other discussions look at the randomness of card shuffling procedures, and a general analysis of gambling systems For the most part, the papers that comprise this collection were initially presented at the Ninth International Conference on Gambling and Risk Taking, which took place in Las Vegas in June 1994, and the Tenth International Conference on Gambling and Risk Taking, which was held in Montreal in June 1997. The International Conferences, the first of which took place in 1974, have brought together academics from a wide variety of disciplines, as well as industry representatives, regulators, professional gamblers, and other interested parties, to explore the wide variety of challenging scientific, social scientific, psychological and business dimensions associated with gambling and with commercial gaming industries. This volume is the eighth book that
has been published by the Institute for the Study of Gambling and
Commercial Gaming since 1990. They have covered a wide variety of
topics in the general categories of public policy, the psychology of
gambling, business and economic issues of gaming industries, Indian
gaming, and the mathematics of gambling. William R. Eadington June 1999 |
