The Man Who Broke Atlantic City

Don Johnson won almost $6 million playing blackjack in one night, single-handedly obliterating the monthly revenue of Atlantic City’s Tropicana casino. Not long before that, he’d taken the Borgata for $5 million and Caesars for $4 million. But Don Johnson isn’t a card counter. So how did he do it?

Turns out, he is one of those sophisticated (high roller) gamblers who can negotiate with casinos, as explained in this story in The Atlantic:

Sophisticated gamblers won’t play by the standard rules. They negotiate. Because the casino values high rollers more than the average customer, it is willing to lessen its edge for them. It does this primarily by offering discounts, or “loss rebates.” When a casino offers a discount of, say, 10 percent, that means if the player loses $100,000 at the blackjack table, he has to pay only $90,000. Beyond the usual high-roller perks, the casino might also sweeten the deal by staking the player a significant amount up front, offering thousands of dollars in free chips, just to get the ball rolling. But even in that scenario, Johnson won’t play. By his reckoning, a few thousand in free chips plus a standard 10 percent discount just means that the casino is going to end up with slightly less of the player’s money after a few hours of play. The player still loses.

But two years ago, Johnson says, the casinos started getting desperate. With their table-game revenues tanking and the number of whales diminishing, casino marketers began to compete more aggressively for the big spenders. After all, one high roller who has a bad night can determine whether a casino’s table games finish a month in the red or in the black. Inside the casinos, this heightened the natural tension between the marketers, who are always pushing to sweeten the discounts, and the gaming managers, who want to maximize the house’s statistical edge. But month after month of declining revenues strengthened the marketers’ position. By late 2010, the discounts at some of the strapped Atlantic City casinos began creeping upward, as high as 20 percent.

The house has advantage, over long term, with typical gamblers who wager from a few to a few hundred dollars per hand. But when you have elite status and can negotiate with casinos to give you discounts on losses, you can turn the odds in your favor. And that’s what Don Johnson did…

Last question: is Don Johnson the most famous blackjack player in the world? That’s what the article attests.

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