TEXT OF INTERVIEW
Kai Ryssdal: We heard a lot about risk during the financial crisis. How there was too much of it on Wall Street and not enough respect for it in the rest of the economy. Risk does have its more common applications, though. It makes entrepreneurs take the chances they do, for instance. It's why some people love to ski those double black diamond runs on the backside of the hill where nobody's patrolling. And it's why, in the final analysis, why Las Vegas exists.
When he was playing and winning at the blackjack tables Josh Axelrad used to write commentaries for us. He's got a new book out about his former life. It's a memoir called "Repeat Until Rich: A Professional Card Counter's Chronicle of the Blackjack Wars." Josh, welcome to the program.
Josh Axelrad: Thank you for having me.
Ryssdal: It bears mention right at the beginning that you started on Wall Street and somehow wound up as a professional blackjack player. How did that happen?
Axelrad: Well, honestly, the thing that I was most confounded by was the fact that I started on Wall Street. It was not where I was trying to end up. It was an accidental situation. And needless to say I was not embracing it so much, I was dreaming of other things. Although it was very hard for me precisely to find what those things were until I met a person at a party with some friends who had counted cards.
Ryssdal: And you meet a guy at a party, you start talking, you find out more about this blackjack thing, and then you wind up at a very sort of parallel place in the blackjack world, right? You were a Wall Street analyst, and you wind up on this crew of professional blackjack players doing very much that thing, sort of entry level, right? Describe that for me.
Axelrad: One thing that happens in blackjack is that over time you become known to casinos. So over time it becomes more and more difficult to play. And one solution to that problem for organized blackjack players is what my team chose to do, which was to bring together experienced players who had bankroll with less experienced people like I was at the time who have clean faces but not necessarily bankroll or much know how. So that's how I came in, I was a clean face.
Ryssdal: So give us the thumbnail then of how card counting works because that is sort of relevant to this whole thing.
Axelrad: In this particular game there are certain cards in the deck that are disproportionately favorable to players, and what that means is that if you happen to run into a situation where because of the random permutations of the way the cards were combined during the shuffle, you wind up with a deck, or in casinos these days they usual play with multiple decks combined into what are usually called shoes, either six decks or eight decks. So you wind up with a shoe, in which there's an abnormally high concentration of those good cards -- the player favorable cards -- the house edge will actually disappear. And what card counters do is that they attract that concentration, and they win money by increasing their bet size dramatically when they find a favorable deck.
Ryssdal: So what's it like in the casino as this is happening?
Axelrad: We would play in different styles, but in the classic play that we used a good bit, there would be a group of us, maybe three or four counters sitting at different tables, and they would be betting table minimum trying to blend in. And there would be one additional figure known as the big player, the BP in blackjack parlance, whose job was to place large bets. And the counters when they found a favorable shoe, they would signal that big player through some conventional gesture like lighting a cigarette, something that would look normal in a casino, and the big player would be looking for that signal from those individuals and would swoop down on the table and start throwing in very large bets.
Ryssdal: So you have these setups in the casinos, and then behind it, the thing that was interesting to me was, you have almost a syndicate, you have investors who put up money, you have folks who aren't even within 5,000 miles of the casino, but they're sort of backing you guys, bankrolling you guys.
Axelrad: One of the things that turns out to be the case is that investment and well-run blackjack operations is reasonably desirable. Because the returns are decent. They're not stellar, you don't typically become a millionaire from counting cards, but you can earn expected returns of 4 percent or 5 percent for a few days of play. And when you annualize that figure it turns into something that's very hard to beat.
Ryssdal: And so there is a career path. You work your way up until eventually you in the book become a BP, right, a big player.
Axelrad: That's true. And in the beginning that opportunity was not available to me in part because early on I was the youngest player they had on the team. And I looked a little bit odd. My character was odd. I wasn't actually a normal casino goer. I was growing dreadlocks at the time, I was a little bit of a freak, so they didn't think I could sort of fill the role. But over time I did step up to that role, and as a result of that become increasingly hot myself, so that I, too, saw my playing opportunities begin to diminish. So there was a career path but over the very long run, it is difficult to stay ahead of the casinos all the time.
Ryssdal: Josh Axelrad. His book is called "Repeat Until Rich." Josh, thanks a lot.
Axelrad: Kai, thank you very much.