You Remember Don Johnson, right? The actor/singer who appeared in Miami Vice, Tin Cup, Django Unchained and many more, leading to a star on the Hollywood Walk of Fame.
He’s great, but it’s actually his namesake that we’re most interested in for the purposes of this story.
This Donald Johnson, better known as Don, was the man who went from poacher to gamekeeper, swapping various roles working in casinos and industry regulators before becoming a professional blackjack player himself.
It was a move that would prove incredibly profitable….
To set the scene, the financial crisis of 2008, precipitated by the collapse of investment firm Lehman Brothers, was so dire that people had tightened their belts, no longer spending their leisure time – and money – in casinos as they battened down the hatches on their finances.
Casino bosses, seeing traffic on the gaming floor plunge to lows not experienced in five decades, decided to target high rollers in a bid to get some money flowing back into their establishments.
And so they came up with a novel idea: they would allow VIPs and celebrity players to effectively negotiate their own rules of engagement, hoping that they would remain profitable regardless.
But they hadn’t accounted for the shrewdness of Johnson, who managed to persuade casino chiefs to introduce a set of tweaks to common blackjack rules that would net him $15 million (£12.1 million) over a six-month period in 2011.
Here’s exactly how he did it….
Beating the House
As you are no doubt aware, blackjack is a game with a built-in house edge.
This can range from 0.5% to 2.5%, depending on the variant and the experience/skill of the player, and like a bookmakers’ overround ensures that, over an infinite number of bets, the ‘house’ will come out on the right side of profit.
Most blackjack players are fully aware of the house edge, and yet continue to play the game because a) they enjoy it, b) they practice ‘perfect’ blackjack strategies to bring down the house edge or c) they are egomaniacal enough to think that being on the wrong side of the house is of no concern to them.
Don Johnson, being a smart cookie who founded the ultra-successful sports betting software firm Heritage Development, realised that with the casinos desperate to entertain him amid the financial crisis, he had an opportunity to turn the tables on them.
“They began offering deals that nobody’s ever seen in New Jersey history,” he would later say.
“I’d never heard of anything like it in the world, not even for a player like Kerry Packer, who came in with a $20 million bank and was worth billions and billions.”
And so he sat down with three Atlantic City casinos – Caesars, Borgata and Tropicana – and outlined the changes that would entice him to the blackjack table at their establishment:
- Dealer forced to stand on soft 17
- Six decks of cards used
- Ability to re-split aces
- Rebate of 20% on losses over $500,000
Johnson has also negotiated an uplift in the maximum stake to $100,000 per hand, rather than the typical VIP ceiling of $50,000, and he also decreed that he could walk away at any time – he didn’t have to play through a set number of hands or stakes before he could call it quits.
Why were these rules important? Well, a 20% rebate on losses is effectively bonus money, and ensured that DJ would walk away from a losing $500k session with $100k back in his pocket. Evidently, this would assist his bankroll management no end.
Normally, a dealer would have a choice of standing or hitting with a hand of soft 17 (where the ace counts as 11), which given that they play second is a major advantage.
But by enforcing the stand rule, Johnson was able to reduce the house’s edge by taking one form of advantage play away from the dealer.
Some casinos also don’t allow for re-splitting of paired hands, or at least they won’t let you re-split aces anyway. But Johnson managed to convince casino bosses to allow aces to be re-split, and while such instances are rare they can lead to some significant wins in the right hands.
With his unique conditions in place, DJ set to work….and went on to enjoy one of the most infamous winning streaks in casino gaming history.
Betting Big
Knowing that he stood an excellent chance of turning a profit, barring a catastrophic run of cards, Johnson headed to Atlantic City with all guns blazing.
What’s strange about the situation is that Atlantic City actually knew of Johnson already, knew he was an accomplished, advantage player, and knew that at a table with revised rules he could seriously hurt their bottom line. DJ had already been banned from playing at Donald Trump’s Taj Mahal after winning the relatively small sum of $200,000.
But they were either too naïve – or too desperate – to truly appreciate the storm that was heading their way….
Johnson became famous for 12-hour blackjack sessions at the three casinos he had negotiated his playing conditions with, and one of his most famous nights came at the Tropicana, where he would win $6 million in a single evening – singlehandedly wiping out their entire month’s revenue.
At one point, DJ amasses winnings of $1.2 million in just three hands. In a quirk of fate, he was dealt a pair of eights (which he split) and, then was handed another pair of eights. Again Johnson split, leaving him with four active hands that would soon be boosted by low value cards dealt next. He doubled down on each, and profited handsomely.
Word was spreading of the guy in the baseball cap that was wagering $100,000 per hand, and soon spectators were forming around the table alongside pit bosses, who must have been watching with dismay as the action unfolded in front of their very eyes.
In a six-month reign of terror, Johnson walked away from the Tropicana with nearly $6 million in profit, left Borgata with $5 million and took Caesars for $4 million – resulting in a total haul of a cool $15 million.
Unsurprisingly, casino chiefs were not particularly happy that their annual bonuses were destroyed by one man. Caesars banned Johnson outright, while the Tropicana and Borgata said he could return but only under traditional blackjack rules.
With $15 million in his bank account, it’s doubtful that DJ gave two hoots.
The Fallout
Johnson would be accused of card counting and other tricks in the aftermath, but he rejected those assertions and at no point did pit bosses or security step in as they ordinarily would when a counter is identified.
He simply knew that he was playing almost an even money game given his rule variations, and with a bit of luck – such as being dealt those four eights in a row – he could turn the tables on the casinos.
There were victims of DJ’s purge. Mark Giannantonio, the Tropicana CEO that had given the green light to Johnson’s demands, was sacked as the casino’s profits plummeted.
Atlantic City as a whole was feeling the pinch, with fewer tourists stopping by plus extra competition from neighbouring states. Johnson was like the Grim Reaper that merely accelerated the decline of a gambling destination once bankrolled by Donald Trump’s (borrowed) millions.
As for Johnson, he became something of an overnight celebrity, and uses his new-found wealth to wine and dine amongst the elite and society’s movers and shakers. At one point, he and DJ Steve Aoki sprayed a Las Vegas club crowd with a 15 litre bottle of champagne, before taking his splurge of excess to Europe, Australia and elsewhere.
If you’re going to win big, you might as well celebrate in style….