Don Johnson Biography

From the MIT Blackjack Team to Edward Thorpe, many blackjack pros have made a
fortune through card counting. This is what makes blackjack player Don Johnson so unique, because he didn’t
rely solely on card counting to beat the casinos.

Instead, he made special deals with the house that, unbeknownst to the casino
officials, gave him a huge advantage. By the time his incredible blackjack run was
over, Johnson had made over $15 million in profits before casinos caught on and banned him.

How did Johnson do it?

Find out as we discuss Johnson’s background, one of the greatest blackjack
runs in history, rule negotiations, and what Johnson is doing these days.

From Jockey to Casino Executive

Too Tall to Be a Jockey

Born in 1962 in Salem, Oregon, Johnson’s first love was horse racing. He rode
horses that his uncle owned and eventually began racing competitively
as a teenager.

Johnson’s goal was to become a professional jockey. But his dreams were
dashed when he grew to 6’1″ – much taller than the 4’10” to 5’6″ height range
for most jockeys.

Managing Racetracks

Even though Johnson couldn’t ride horses professionally, he stayed close to
the industry by working at the tracks where he used to race. By age 30, he was
hired to run day to day operations at Philadelphia Park, which became Parx Casino
and Racing in 2009.

Before working as a racetrack and casino executive, Johnson had been a gaming
regulator. This combination of jobs gave him the opportunity to watch blackjack
players and examine their strategies.

“I’ve watched them as a regulator. I observed them as an operator of a
racetrack,” Johnson told Bloomberg.

Horse Racing Software Company

While still a casino executive in Bensalem, Pennsylvania, Johnson opened a
Wyoming registered software company called Heritage Development. Ahead of its time,
Heritage Development provided computer assisted programs for horse race bettors.

The programs work by gathering results from horse races and applying results
to real time odds at the tracks. The software then calculates the true odds of a
horse winning.

By comparing these odds with those given by the track, a bettor can find
horses with the most value. Sometimes this value is found in several horses in
the same race, which requires putting a small percentage of one’s bankroll on
each horse.

It’s these advantages that not only allowed Johnson to run a successful
software company, but also make money off horse race betting himself.

Johnson’s Blackjack Beginnings

Starting Out as a Casual Player

Long before he became famous for beating casinos for millions of dollars,
Johnson’s blackjack career started humbly in 2001. As a state gaming agent and
casino agent, he developed an interest in blackjack and played low stakes for fun.

After quitting his casino executive job to become an advantage horse race
bettor, he used blackjack as a relaxation method after pouring over racing
statistics.

“I used to play in casinos before, just recreationally,” said Johnson. “$25
bets, a $100 bet would be a huge bet.”

While he didn’t win long term profits in these $25 games, Johnson did learn
how to play and use basic strategy.

Desperation in Atlantic City

After learning the math behind blackjack and how casinos cater to high
rollers, Johnson noticed that Atlantic City casinos were getting desperate. In
2010, he offered to play for stakes up to $100,000 per hand at these casinos.

“There’s a time when Atlantic City was desperate for business, and I think
they were overpitching some of the games,” Johnson explained.

But rather than asking for lavish comps like most high rollers, Johnson
negotiated for better rules that reduced the house edge. This, as I’ll cover
later, turned out to be his defining advantage.

Johnson’s first victim was the Trump Taj Mahal in the fall of 2010. He won
$220,000, which the now defunct Taj Mahal paid through a check before refusing to
deal any more hands under the agreed upon conditions.

“I called Caesars, located a bit down the block, and they told me to come
over with the [Taj Mahal] check,” Johnson said. “They promised to work something
out for me in terms of cashing it.”

An Offer Johnson Can’t Refuse

As Bloomberg points out in their special The Player: Secrets of a Vegas
Whale, Atlantic City casinos were calling Johnson after identifying him as an
advantage player. They not only agreed to negotiate rules with him, but also
offered up to $50,000 in free blackjack bets.

The incredible offers led Johnson to realize that Atlantic City was in worse
shape than anybody realized.

deal any more hands under the agreed upon conditions.

“I think Atlantic City, they’re losing too much of their business now,” said
Johnson. “There’s just too much competition in surrounding states.”

The Start of an Incredible Blackjack Run

$4.2 Million Win at Caesars

What Johnson won at the Trump Taj Mahal would be small stakes compared to his
future profits.

He immediately went to Caesars with an entourage that included two friends
and a couple of beautiful women. This entourage, combined with expensive
alcohol, sold the image that Johnson was a rich playboy looking to gamble.

The revelry distracted the pit boss from seeing the following:

• Johnson was counting cards.
• One of his friends was trying to spot the dealer’s hole cards.
• The other friend was helping Johnson count cards and signaling when the
  deck was rich in high cards, or a favorable count.
• The girls only stepped in to make small bets when the deck was low in
  high cards.

Johnson and his crew didn’t tell the girls what was going on. He only
instructed them to play hands for small stakes when the three men wanted to step
out of the game.

It was the perfect way to fool Caesars’ staff into thinking that Johnson and
his friends were taking breaks – rather than waiting for a more favorable count
to start betting big again.

Sometimes betting three hands simultaneously at $25,000 per hand, Johnson
earned a $1.5 million profit after playing for just two and a half hours. By
this point, the high stakes blackjack pit was getting calls from management.

A Comped Dinner Break

Johnson and his crew took a break to escape the heat of management, eating a
comped meal at Morton’s Steakhouse worth $4,000.

Despite talking over how Johnson was beating them, Caesars management was
still unable to figure out how he was winning. With expensive French wine and
Louis XIII cognac flowing heavier than before, the party atmosphere confused the
dealer, pit boss, and surveillance.

The Winning Continues

At one point in the blackjack session, Johnson saw that Caesars reloaded the
chip tray and said, “I want to win every chip in the tray.”

He not only executed his strategy to perfection, but also took advantage of a
good run of cards. When it was all over, he’d accumulated $4.23 million.

Capping Off a $15 Million Blackjack Run

$5 Million Profit at the Borgata

One thing that makes Johnson unique from many high stakes gamblers is that he
doesn’t wear the flashiest suits or designer shoes. Instead, he has an
unassuming look that includes windbreaker pants and hoodies.

This is one reason why more casinos continued to underestimate Johnson,
despite his $4.2 million win at Caesars.

Next up was the Borgata, which let Johnson beat them in three sessions before
calling it quits.

He won $998,000 in a December 2010 session, $1.8 million in a March 2011
session, and $2.25 million the following April.

By the time the Borgata finally stopped offering Johnson the advantages he
requested, the “Beast of Blackjack” had won over $5 million.

$5.8 Million Win at the Tropicana

While Johnson’s wins at Caesars and Borgata were impressive, the win that
skyrocketed his fame was one involving the Tropicana.

During a 12 hour session, he booked a $5.8 million profit while betting up to
$100,000 a hand. At one point in the session, Johnson won a combined $1.2
million on three consecutive hands.

One of these hands – where he made $800,000 – saw Johnson receive two eights,
which he split, only to receive another eight in each new hand.

Johnson split both of these hands and doubled down on his original $100,000
bet on all four of the hands.

The dealer busted, giving Johnson a $200k win on each of his four hands.

By this point, a number of spectators gathered around to see the man in an
Oregon State hoodie dominating the blackjack table. They also witnessed the same
party atmosphere that Johnson had used to distract dealers and pit bosses at
Caesars and the Borgata.

The one noticeable change in this session is that Johnson wasn’t counting
cards, but rather taking advantage of the incredible deals he’d negotiated for.

Hurting the Casinos

After crushing blackjack games at the Borgata, Caesars, and Tropicana,
Johnson had earned a $15 million profit. This brought instant fame and
recognition to an advantage player who’d previously flown under the radar.

Soon, articles and TV specials were featuring the Beast of Blackjack and his
remarkable run. Bloomberg came calling, The Atlantic ran a lengthy column on
Johnson, and online publications dissected the terms he negotiated for.

Not lost in all of this was the toll that Johnson’s run took on struggling
Atlantic City casinos.

The Tropicana, which already had the city’s second lowest table game
revenues, was hammered by the $6 million loss to Johnson. Mark Giannantonio,
president and CEO of the company, was fired because he approved the $100k per
hand betting limit.

While Caesars and the Borgata didn’t fire their CEOs, they too felt Johnson’s
sting, having already dealt with three years of declining gambling revenue.

How Did Johnson Beat Blackjack for $15 Million?

Profile of an Amateur

Any good casino will research high rollers to determine what comps they
deserve and if they’re an advantage player. Borgata, Caesars, and Tropicana used
the same diligence in dealing with Johnson.

They all came to the same conclusion: he was a good recreational player who
bet in the high roller range. But he wasn’t considered an advantage blackjack
player who could overcome the house edge and burn casinos.

The Borgata, for example, saw that Johnson hadn’t played a blackjack hand
with them for over a year. Mired in a gambling revenue slump, the Borgata and
other casinos started calling Johnson and competing for his business.

Johnson had created a profile that allowed him to negotiate with casinos for
better rules. And the profile was accurate because, despite his attempts to beat
blackjack for years, he hadn’t figured out how to do it.

But Johnson finally saw the light after sensing the desperation of Atlantic
City casinos and their willingness to make deals.

Negotiating a Winning Price

In the past, Johnson received a lifetime discount of 20% on blackjack losses.
But the catch is that a player has to lose all the winnings from the previous
trip, plus another $500,000 in the current session.

Based on these conditions, Johnson knew that he couldn’t win long term with
the 20% discount rate. But the Borgata was the first to change this and offer
the discount on a per trip basis.

Caesars and the Tropicana followed suit by giving Johnson the deal he was
looking for.

Technically, a casino should be able to maintain their long term edge through
calculations that include comps and special rules. Tony Rodio, who took over for
Giannantonio as Tropicana’s CEO, explained the process that they currently use.

“Once a customer comes in, regardless of the game they may play, we plug them
into the model so that we know what the house advantage is, based upon the game
that they are playing and the way they play the game,” Rodio told The Atlantic.
“And then from that, we can make a determination of what is the appropriate
[discount] we can make for the person, based on their skill level.”

All three casinos ran the numbers, but somewhere along the line they messed
up.

What Conditions Did Johnson Negotiate for?

During a speech at the 2013 World Game Protection Conference, Johnson said
that his negotiated rules lowered the house edge to 0.263%.

Here’s a look at the rules that he asked for:

• A 6 deck, hand shuffled shoe.
• Splitting up to four hands per turn.
• Doubling down on any hand – including split hands – regardless of the
  total.
• Dealer stands on a soft 17.
• 3:2 natural blackjack payouts.

Although a 0.263% house edge is incredibly thin, it still adds up to $263 in
expected losses per hand. Over the course of an hour (approx. 50 hands), that’s
over $13,000 in losses.

But this is where the other conditions that Johnson requested kick in:

• The maximum table bet was $100,000 per hand.
• There was no minimum play requirement before Johnson could quit.
• He received a 20% loss rebate any time he lost $500,000 or more.
• The loss rebate reset after the session was over.

Johnson had to provide a $1 million stake to get in the game. But his $1
million was never at risk because if he lost $500k, he could quit, recoup his
20% loss rebate, and only lose $400k.

Considering that Johnson was already dealing with a 50 / 50 proposition, he
gained a slight advantage from the loss rebate. Unlike the casino, he could quit
the game after a few hands and get 20% of his losses back.

Thanks to the rebate, he was effectively playing with a 0.26% long term edge
over the casinos. Under this condition, he didn’t even need to count cards,
which he did against Caesars anyways.

Add in the $50,000 in free bets per session, and Johnson’s advantage only
increased.

Forcing Dealer Mistakes with a Party Atmosphere

Distracting the Dealers

In a normal blackjack game, any time the dealer makes a mistake, the bet is a
push.

But one more stipulation of Johnson’s game is that he wanted a free bet any
time the dealer made a mistake.

At $100,000 per hand, this meant that Johnson could get $200k to $300k in
free bets with a few dealer mistakes. And this give him extra incentive to
create the party atmosphere described before.

“You need to be better than the dealer,” he explained to Bloomberg. “There
aren’t enough players that come in that they’re going to deal $100,000 a hand to
– they’re nervous.”

Johnson used complicated side bets and hand gestures during his high stakes
games. If the dealer didn’t notice one of the gestures, such as split or double
down, he received a free bet.

“So a lot of the dealers aren’t used to dealing these rules, they often make
mistakes. They make a mistake that’s in your favor, you’re going to collect on
it – those are free bets.”

Johnson forced the issue by using all kinds of distractions to make the
dealer’s job harder.

“I’ve had all kinds of distractions for dealers,” he said. “I’ve had porn
stars play with me during the AVN Awards in Las Vegas. I’ve had five, six,
seven, eight different girls that would pose as a girlfriend… there’s always a
circus going on. To them, the more it looks like one giant party, the better it
is for my side of the table.”

You Can’t Beat Me

Even with the conditions he sets forth, Johnson still assumes risk in any
individual blackjack session. But he also believes that no casino can beat him
when free bets are riding on dealer mistakes.

“You make too many of those mistakes in a night, then you can’t beat me.
Especially if you’re giving me a 20% discount. Especially if you give me $50,000
walking in in free bets to start off with.”

Despite the liquor flowing around and fake girlfriends by his side, Johnson
has an acute ability to pay attention to the game.

“I think I’ve caught every mistake that they’ve made, that was not in my
favor. And [I] made them give me the free bet because those are the rules of the
game.”

The Casinos’ Attempts to Thwart Johnson

According to Johnson, beating high rollers begins with the courting process,
where casinos offer comps and other perks to lure big players.

“The catering to high end players starts before they even think of coming
here,” explained Johnson. “They’ll bring a player from the East Coast to Las
Vegas. The MGM property has The Mansion, which is 29 villas under a climate
controlled dome.”

Once a high roller is on the tables, the casino plays a game of cat and mouse
with them.

“The dealer is empowered to do many things,” said Jim Murren, CEO of MGM
Resorts. “They can slow down the game, call in a supervisor, [call] other
dealers.”

Despite casino tricks, Johnson maintained the discipline and focus needed to
use perfect basic strategy and spot dealer mistakes.

Conclusion

While Johnson knew that he was set for big profits with his blackjack edge,
he never guessed that it would become front page news.

“I guess for the first time in 30 years, a group of casinos actually had a
huge setback on account of one player,” he said to The Atlantic. “Somebody
connected all the dots and said it must be one guy.”

Following his $15 million blackjack streak, Johnson celebrated by partying in
nightclubs from Vegas to London. One infamous night saw him spend €168,118 on
liquor at London’s Park Lane Club, while newfound friends Jon Bon Jovi and
Charlie Sheen looked on.

Johnson also had the honor of hosting Pamela Anderson’s birthday bash in Las
Vegas.

As for blackjack, casinos aren’t keen to invite him to the tables – at least
not under the same rules.

The Tropicana invited him back to play under the same rules, minus the 20%
rebate. He still won $2 million with some luck on his side.

Beyond the partying and recreational blackjack play, Johnson hasn’t gotten
out of control with his winnings. He still lives in the same house in Bensalem
and hasn’t splashed on fancy cars or luxury items.

Based on the fact that he’s beaten horse race betting and blackjack, it seems
entirely possible that Johnson could strike again someday. But unlike with his
blackjack streak, Johnson won’t be surprised if it becomes big news again.