The inside story of the man who beat Atlantic City casinos for $15 million
In 2011, a man wearing a black cap and an Oregon State hoodie wagered $100,000 a hand at blackjack inside the plush high-limit pit at the Tropicana casino. Twelve hours later, he quit with nearly $6 million in winnings. Four months prior, he had won $4 million from Caesars casino and another $5 million from the Borgata. What follows is an interview I conducted with the man — Donald Johnson — and the inside scoop on how he made history by beating three Atlantic City casinos for $15 million.
How did you first come up with the idea to approach a casino in Atlantic City and negotiate a deal with them to play blackjack?
I was at a Monday night football game in Washington, DC, and a casino host was pitching a “deal” to several big players. I had heard about loss rebates before but not at the level that he was describing. I thought his deal was too good to be true so I contacted some math-professional friends and asked them to “fact check” the deal to be sure it was worth the risk. (“Their math was solid; these guys don’t make mistakes.”) I then contacted the host and asked if he would honor the deal for me. He said “Yes” and that’s how I got started.
What happened next?
It took a few weeks, but I negotiated a deal with the host to play blackjack with these conditions: They gave me $50,000 in promo chips just for walking in and playing (I tried for $100,000 but they balked, and I had to settle for $50,000), and I had to put up one million dollars in front money and wager $100,000 a hand. I was able to negotiate a higher rebate on my losses (than what they initially proposed) to 20%, and a reduction in the threshold at which I could take the 20% rebate from one million to $500,000. The game would be played in the high roller pit with rules that were standard for their high-limit games: six-deck shoe game with hand shuffling (no continuous or automatic shuffler), dealer stands on soft 17, blackjack pays 3 to 2, doubling down allowed after pair splitting, late surrender, resplit aces, and you could resplit pairs up to four hands. These playing rules were offered only in the high-limit pit (i.e., you couldn’t play this game with these rules in the main casino).
What type of promo chips did you receive?
There were different kinds. Some were like match plays where I could use them only once. They were worth roughly 50% of the face value. With other promo chips, I could continue to play them until I lost. These were more valuable and worth about 99% of the face value. In either case, this was free money given to me by the casino.
Why do casinos offer these types of deals?
In the industry it’s called “buying the business.” They offer deals like the loss rebate and the promo chips as an incentive to get high rollers to come in and play at their property, with the caveat that they must bet a large sum of money on each hand. However, it’s a risky business for them, and the Tropicana has since decided to abandon this business model and now caters more to the mid-level player.
What was the house edge against a basic strategy player for this game?
The house edge was 0.26 percent against a basic strategy player; however, if you applied some other unique methods and techniques and changed your style of play you could wind up with a positive edge over the house. A few other things also had to happen in order for you to maintain that edge, which you couldn’t predict until you started playing.
Was there anything else about this deal?
Yes, the player had the edge with the deal as it was negotiated, but as you played more and more hands, there was a high probability that the edge would eventually swing in the casino’s favor. I knew this beforehand so I never intended to play every hand. I brought along some female friends with me to be at the table when I played. Whenever the edge was not in my favor during the playing of a shoe, I didn’t want to be in those hands so I would take a break (went to the bathroom, got a drink, whatever) and my friends would continue to play (at lower stakes, $25 to $100). I wanted to avoid jumping in and out of a game during mid-shoe, so I usually waited for the start of a new shoe to resume betting. Therefore, I didn’t play every hand, as most people thought (and I knew beforehand I didn’t want to play every hand); I only played hands where I had a positive expectation (and that’s when my lady friends knew not to make a bet).
Can you explain what the “other unique techniques and methods” were that you were using when you played?
No, I really can’t go into the details because they were not methods and techniques that I developed. Let’s just say that besides these proprietary techniques there were several “elements” of the game that we were tracking and changing, and when two or more elements were favorable, it was worth taking the risk at $100,000 a hand. But look, the casinos offered the game with their rules knowing the theoretical edge was razor thin in their favor but here is what they missed: they were counting that their edge would actually be greater than 0.26% due to player mistakes (i.e., house edge would increase from 0.26% to 0.75% to 1.5 % in their favor). What they hadn’t considered is that often on graveyard shift, tired, bored, and less-experienced dealers were dealing the games and they tend to make more mistakes (especially when the table has “talkative players, a party atmosphere, and a high-roller betting more per hand with splits and doubles than the value of the dealer’s home”), and if you challenge those mistakes when the results of the hand don’t turn out in your favor, you essentially get a free bet (at $100,000 per pop).
Look, dealers are human beings, not machines, and they make mistakes. Moreover, I didn’t make the rules of the game; if dealers don’t follow casino rules and procedures, it’s not my problem or fault; it’s the casino’s problem. It doesn’t take very many of these “mistakes” every hour to swing the odds in your favor in a game with a razor-thin house edge. (In addition, when dealer mistakes occurred in my favor, I could play a lot more hands maintaining an edge.) Essentially, if you don’t make mistakes on your side of the table and are playing accurately (which I was) but the dealer is making several mistakes each hour on her side of the table, in a game this close, and betting $100,000 a hand, the casino is vulnerable.
Can you give me an example of a dealer mistake that occurred?
What the hand was is immaterial. Suppose I had a 17 and the dealer had a 9, 10, picture card, or even an Ace showing. The casino rules specify that she must wait for a hand signal from the player. If I’m talking to my friends and the dealer assumes I’m going to stand and doesn’t wait for my hand signal and passes me up, she isn’t following the rules. Maybe I wanted to surrender the hand or even take a hit. How I wanted to play the hand is irrelevant; the point is that the dealer made a mistake and didn’t follow the rules.
Weren’t these mistakes picked up by the dealer’s supervisor?
You would be shocked at some of these blatant mistakes that occurred even with a pit boss, a shift manager, and surveillance watching the game. For example, I played for two to three hours where the dealer offered me (by mistake) early surrender instead of late surrender (meaning, I could surrender my hand before the dealer peeked at her down card, which is a very favorable rule for players).
What was one of your concerns with the negotiated deal?
My biggest concern was that if I didn’t get out in front of them early, the casino would pull the deal. Fortunately for me, this didn’t happen and I got ahead of them initially and I never had to play catch up. (Yes, this was stroke of luck.)
Did you win on all of your trips to the Tropicana?
Not all of them. First time I played there, I beat them for about $1.2 million and I stopped playing. The next trip, I was down about $400,000 early on but then I got a hand where I split and doubled down several times, lost all the hands, and went down $800,000 (which was over the $500,000 threshold so I took the 20% discount). I was still ahead, however, for both trips. The next trip I was up over a million, and the following trip, is when I beat them for six million dollars in one night.
Does the Tropicana still offer these types of deals to high rollers?
These deals are known in the industry as “buying the business,” where they offer incentives to high-rollers (like the promo chips, lose rebate, etc.) in order to get them to come in and play for high stakes. The Tropicana decided to stop offering these types of deals to high rollers to minimize their risk. Nowadays, they cater more to mid-level players.
Wasn’t the CEO of the Tropicana fired after the news of your big win went public?
I don’t think I was the sole reason that he got fired. I think it was a combination of things, and my big win was just the tipping point for his firing.
Why do you think the bosses at the Tropicana offered you such a sweet deal?
I wasn’t part of their meetings so I don’t know for sure why they agreed to the deal. I can only speculate that someone from the Tropicana thought that based on their experience, their house edge would be greater than 0.26% due to player mistakes; however, they didn’t see the risk.
Are you allowed to play at any casinos nowadays?
Many have cut me off including casinos in Las Vegas. However, I can still play in several casinos and, in fact, I host a blackjack tournament for one of them, shake hands, take photos with players, sign autographs, do whatever the casino wants me to do, and they let me play blackjack but by very specific rules.
At the last Blackjack Ball, you came up one vote short of being inducted into the Blackjack Hall of Fame (BJHOF). Were you disappointed?
Look, Bill Benter, who was elected into the BJHOF, has been at this a long time and he certainly deserves to be in the Hall. In fact, I was shocked he wasn’t in it before now. He also does a lot of stuff like we do with horse racing (he is actually a competitor). I’m happy that Bill got in and whatever happens at the next Blackjack Ball happens, and if I have to wait longer, that’s OK.
In your opinion, is there someone else in the world of blackjack that did what you did?
From what I read, I would say the late Kenny Uston. I’m not a mathematician (neither was Ken). I’m smart and I did the logic behind it but I didn’t do the optimization models; I had other guys do that. I was just the guy that executed the play (like Kenny Uston did), and I put up the bankrolls. I really enjoyed the working relationship and the camaraderie I have with the blackjack guys.
You organized a rather large engraved 15-liter bottle of Luc Belaire “Rare Rose” Champagne that was given to the winner of the Blackjack Ball competition at the last Blackjack Ball. What do you have planned for next year’s Ball?
I’m sponsored by several vineyards, so I did the 15-liter bottle of champagne as a token of my appreciation to the many blackjack guys who attend the Ball and have helped me. At next year’s Ball, we are going to do an extra special bottle; a masterpiece, a beautiful white bottle, engraved in gold. It will be really, really nice. We are already working on it. I’m friends with the Berrish family vineyards that produce the product. (I went to Mr. Berrish to produce the 15-liter bottle, specifically for the Blackjack Ball.)
You’ve done quite a lot of work for different charitable organizations. Which ones were they?
I’ve raised money for the Bon Jovi Soul Foundation for the homeless, Cole Hamels Foundation, St. Ephram School, Steve Aoki Fund, Med Share, and Child Mind Institute.
You are the CEO of Heritage Development, a company that uses computer-generated wagering programs for horse racing. How long have you been involved in this industry?
Horseracing will always be my first love. I’ve always worked in horseracing. I was born into it and I love it. I used to be a state regulator; I operated and managed race tracks from coast to coast; and I still work in the industry. I really enjoy the partnerships, friendships, and relations I have inside the racing industry. It is what I cherish most in life.
Are there any big projects on the horizon for you?
Just one; I’m in the process of planning one last big party with Steve Aoki. (He is a famous American electro house musician, record producer, and music executive.) It’s a charity event for children, and we are hoping that we can break the world’s record for a string of bottles (the current record is four hundred 750 ml bottles long). Right now we are working on the details of this event that will happen sometime next summer. (To be truthful, I’m getting too old to stay up all night in the club scene, which is why this will probably be my last big event.)
Thank you for taking the time for this interview, and for sharing with readers the details on how you beat the Atlantic City casinos. I wish you all the best in your future endeavors.
Henry Tamburin, Ph.D. is the author of the Ultimate Guide to Blackjack www.blog.888casino.com/casino-guides/blackjack), editor of the Blackjack Insider e-Newsletter (www.bjinsider.com), lead instructor for the Golden Touch Blackjack course, and host of smartgaming.com. For a free three-month subscription to his blackjack newsletter, go to www.bjinsider.com/freetrial. To receive his free catalog, call 1-888-353-3234 or visit www.smartgaming.com.