Journal
Guest Blog: Integral Blackjack (by The Pig Barber)
January 09, 2008 11:39

Integral Blackjack

Some Integral theorists know who I am, maybe even Wyatt Earpy Himself knows. But I can’t sign this essay with my real name, for reasons that will become clear. And that is a shame because this is going to be one brilliant essay.

I’ve always felt an annoying pull/push to do things that often make no money, or maybe kinda make a little money, like astrophysics, writing, teaching, spiritual practice, philosophy, etc – all morally degenerate activities in our capitalistically sensible society. Several years ago I told myself enough of that (hopelessly, but I did so tell myself) and that I had to focus at least for awhile on more morally acceptable activities … making money. That led me to professional gambling.

Card Counting:

In the game of casino 21 or blackjack, a skilled player can achieve a small edge over the casino. This is done by watching the cards as they come out of the deck or out of the “shoe” if it is a multideck game, keeping track of an index number, and adjusting your betting and playing decisions accordingly. The edge is not large, up to maybe 1 or 1.5 percent max on average depending on exactly how one implements the method. And the variance (up and down win and loss swings) is large. But as you can imagine, if you play fast and with large amounts of money, compared to other types of investment that one percent can add up to be lucrative. The edge is also called an advantage. Blackjack card counting is thus one form of “Advantage Play”, probably the most common form, and card counters are called Advantage Players or APs. A note here: card counting advantage play is absolutely legal! It is simply thinking while you play, in order to play skillfully, for heaven’s sake. The big corporate casinos have not managed to get thinking outlawed in the United States, yet. And they have tried! – amazingly there have been appellate court cases on it. But also amazingly, they’ve managed to spread the myth that it is illegal. Try telling a friend/relative/acquaintance that you are a professional card counter, and a large percentage of the time one of their first reactions will be something like “isn’t that illegal?” Suffering the health hazards of reacting repeatedly to hearing that kind of absurdity is one of the dangers of pursuing card counting.

Purple Ploppies:

So, where does Integral theory come in? To start with, if we consider the cognitive line of development, a study of blackjack players yields a very clear cut developmental sequence within the game and culture of blackjack. The vast majority of blackjack players in a casino are not card counters or APs, estimates usually run far less than one percent. That vast majority are ordinary gamblers. (Many card counters don’t consider themselves gamblers at all.) The ordinary gamblers fall into several types as to frequency but most of them are regulars who gamble several times or more per year. And the majority of those are largely cognitively pre-rational, of course. Fully rational people do not spend large amounts of time throwing their money at a negative expectation game. And blackjack, if you are not AP card counting, is a negative expectation game. There are some exceptions, some fully rational players know their expectation is to lose but they actually enjoy the game and view it as recreation and know about how much per hour they’ll lose on average. But they are very small in number. The vast majority of casino denizens are rip-roaring purple-red-blue magic-animistic-mythic pre-operational thinkers. And they are there to win, they think, not out of some prissy gentile notion of rationally paying for “entertainment”. And they have all sorts of methods and systems for winning: “play with the ‘flow of the cards’; leave the table when the flow goes bad; don’t let other players ‘take the dealer’s bust card’; have a winning attitude – wish for a win and you will win; leave the table if you lose three hands in a row; play your gut, etc.” APs call these people “ploppies”. The origin of the word ploppy is probably to represent someone who just plops down at a blackjack table and plops their money on the table without thinking about how to play skillfully. A ploppy is anyone in a casino who is not an AP.

Blue Ploppies:

Beyond simple magical “hunch play”, another form of ploppy behavior is “progression betting”. Most bet progression systems are something like the Martingale progression. It simply goes like this, bet X dollars, if you lose bet 2X, if you lose again bet 4X, and so forth until you finally win. Then you win a net X dollars, right? To early concrete operational ploppies it looks like you can’t lose. But any formal operational analysis shows that is mistaken, and your net EV (expected value) is the same (negative and in favor of the casino), and even worse your variance with progressions is so large your probability of going bankrupt (losing your whole gambling bankroll) increases. The key problem is that mathematically the progression needs to be able to run to infinity, in order to guarantee that tiny little win of one X. And you can see the several ways that betting to infinity is impossible – all casinos have table max bet limits, all gamblers have finite bankrolls, and so forth. So, slightly higher on the food chain than magical pre-operational thinking Purple ploppies are early concrete operational –minded progression betting ploppies. But they lose just as much, often more, than the magical purple ploppies. So the fat and happy casinos love them all equally.

Orange Ploppies:

These are rare, but some do exist as described near the beginning of this essay – playing for fun, knowing how much they’re expected to lose on average, enjoying the statistical swings up and down. Many of them at least use “basic strategy” which is the playing method that minimizes the casino advantage to as low as it can go with out card counting AP (down to about -0.5% or even -0.25% on the best games).

Note: the Spiral Dynamical color coding was devised mostly for “value memes”, here I am using the color for the analogous structures on the cognitive line of development. But I’m also mixing in some same-stage values aspects, as follows.

Green Ploppies:

These are very rare, because casinos are so disgusting to them – all those grimey little people, everyone focused on money, drinking alcohol, some of them smoking for god’s sake!, prostitutes walking around. Green ploppies just want to get OUT of the casino, and secretly want to take a flame thrower to the place, ridding the world of all these nasty people because they are not working for the pluralistic good of all people.

Card Counters:

Basic card counting really only requires concrete operational thinking. You have to learn and memorize a playing strategy chart, how to measure and keep track of the count index, and how much to bet when. For advanced card counting AP, you also need to memorize a few dozen strategy variations. But it is all concrete operation, a computer could be programmed to do it perfectly.

But most successful card counting APs, especially those who play professionally, seem to be firmly centered in formal operational rationality. I think that is because to have a really deep understanding of how and why card counting works, to really feel it in your bones, enough to stick to it through the hair-raising swings long enough to make it really work, requires formop. Conop can learn the rote method, but without the deep understanding may fall from the path or freak out at a big downswing. And pure conop is likely to not come to the rigorously correct method in the first place, falling prey instead to one of the many bogus systems (like progressions) that are being peddled around.

Clearly the developers of card counting AP theory were operating firmly at least at formal operational. Edward O. Thorp was a math professor at MIT when he wrote Beat the Dealer, published in 1962, revealing the first rigorous complete card counting method to give the player a clear advantage. Thorp published the book after proving the method on the ground in Reno casinos, together with two investing partners. Later, Thorp went on to found one of the first large successful quantitative hedge funds, Princeton/Newport Partners. Thorp was involved in developing and applying a fundamental mathematical finance technique, called “Kelly betting criterion” to both blackjack AP and the stock market hedge fund. That was essentially the origin of the quantitative fund trading method that now makes up a large part of the equity markets institutional trading on Wall Street.

Of course Thorp’s book drove the casinos nuts. Casinos do not like to lose. Over the years since then, the casinos have implemented various counter measures, like not dealing all the cards before shuffle, using several decks of cards shuffled together, slight rules changes, and especially trying to find and eject card counters. And over the years, APs have refined their state of the art methods and techniques such that AP opportunities still exist, though they are more difficult to learn and implement on an advanced level than they used to be. One of those who advanced the art was Stanford University finance Ph.D., “Stanford Wong” (pen name of a tall white guy) who first published Professional Blackjack in 1975. Ken Uston left his job as vice president of the Pacific Stock Exchange to card count professionally, and invented blackjack team play. The now famous “MIT blackjack team” employed state of the art refinements and methods on top of ordinary card counting to win millions from casinos. It is the subject of best selling books, and a film staring Kevin Spacey scheduled for 2008 release. The credentials of these characters suggest independent evidence of formal operational rationality.

Yellow APs?

Most very successful, professional level, card counters are firmly grounded in formop on the cognitive line of development. And I think a significantly higher than usual portion of them also have a touch of yellow – especially vision logic in the cognitive developmental like, and even yellow vMeme in the values line. This is probably due to all the barriers to actually implementing successful card counting, far beyond simply understanding betting and playing decisions.

The biggest barrier is of course casino management. Casinos appear as a schizoid lot to card counters. On the one hand if you bet large enough and long enough to make significant amounts of money, the casinos will give you lot’s of comps – free gourmet meals, free 5 star hotel suites, sometimes airfare, even free cash, and friendly schmoozing “casino hosts”. As long as they think you are an ordinary sucker, ploppy, like 99 plus percent of gamblers are. But the minute they realize that you are playing with an advantage over them, you become a bag of dirt. Card counters are banned from playing, or ejected from the property and told they’ll be arrested for trespassing if they ever return. Professional players have been rousted from their hotel suites in the middle of the night and put out on the street, when the casino measured their play on video tape review and determined they are a counter. They are sometimes forcibly detained, handcuffed in a backroom, while the casino tries to think of some crime they can have their police buddies charge them with. Casinos are by far the largest consumers of all sorts of surveillance systems in the world, especially automatic video face recognition systems (hint for practitioners, these are very easy to foil). And casinos share lists, photos and even identifying habits of known professional players. So players often have to use multiple names and disguises. Getting physically “roughed up” is not as common as in the mobster days, due in part to casinos losing some big lawsuits for that, but is still a possibility.

The ability to navigate that environment with those threats looming, and to avoid being ejected long enough to apply your playing skills on a long term basis, definitely benefits from some very advanced situational awareness abilities. Having a sense of when the casino is starting to suspect you is an art. When you are under suspicion, the pit boss or manager will order a tape review or real time measurement of your play. If you give them enough time at this point they will find you out and eject you. The casino knows that you know that if they are scrutinizing your play you will be toast, so they do not make it obvious. When it becomes obvious it is too late. The ability to keep in mind several real-time perspectives – the pit boss, the dealer, the surveillance guys upstairs, the shift manager, the other players, the cocktail waitress – and real-time analyze how they are viewing you so as to modulate your actions in such a way as to minimize getting ejected may involve some second tier functioning.

I was once detected by a “counter catcher”. Counter catchers are people who know all the details of blackjack advantage play and often have been professional players themselves. The big casinos employ them and deploy them to “catch” APs in real time, because by the time the casino does a video tape review and measurement of the play, the AP is often long gone. I was playing at a snazzy top end five star joint. A small crowd, like three people, had gathered to watch my play. I was playing black chips which is not large for this casino, but any black chip player often attracts spectators. One of the spectators was a Mexican dwarf. He was standing directly behind me watching my play. He even had a little notebook that he would occasionally scribble in (my peripheral vision is very good). Twice I turned around to glare at him, and there was this dwarf with a moronic grin looking straight back at me. Something felt “not right” about it to me. But my prejudices made me think he had to be just some moronic ploppy spectator admiring my play. If I had let my vision-logic really kick in I would have realized it really was not right and left sparing myself the result. When the dwarf left, almost immediately a shift manager in expensive suit came to tell me I would never be allowed to play blackjack there again, and also remind me that they have ways of finding out if I try to use other names. The “moronic grin” was a brilliant act on the dwarf’s part.

Professional players inevitably have to employ some sort of an “act”, in order to look and present themselves like a ploppy. And because there are some “resonances” between the second tier stages and the first tier stages, a yellow AP might more easily convincingly act like a purple-red magic-mythic gambler. And a second tier player might even employ transrational “intuition” in a way that is carefully circumscribed within a fully rational strategy and so is vastly more effective than the pre-rational magical attempts of the purple ploppy. And meanwhile the yellow AP improves his “act” for the pit boss. Well known professional blackjack player Ian Andersen (not his real name of course) has written two top selling books on the game and long ago appeared on the Merv Griffin show (disguised like fried chicken mogul Colonel Sanders). His two books seem also to suggest a stage-like development of himself as he functions in his profession. His recent book Burning the Tables in Las Vegas seems to contain several hints of second tier aspects. Andersen talks about very successful APs employing “soft focus attention” in their play. An example of that given by Andersen is knowledge of the cards that have been played. Card counting systems only keep track of one or two indexes that measure the “goodness” or “badness” of the remaining pack of cards, not all the specific cards like in the movie Rainman. Andersen suggests that highly proficient APs may use “soft focus attention” to employ semi-conscious awareness of more detailed information, like exactly how many 8s are left in the shoe. And the AP, in order to use that soft focus awareness information in such a way as to truly increase his expected win rate needs to only employ the semi-conscious information in decisions where value is added to the fully rationally calculable information, and he needs to employ this decision (which might be something like whether to double a $1,000 bet or not) in an instant. Doing that effectively seems to be a vision-logic-like function to me. Another example might be something like this. Suppose you are playing with black chips ($100 chips). As a very proficient AP, before each round you have calculated rationally the exact optimal bet for maximizing your bankroll growth, the “Kelly criterion” bet. Now suppose in a rapid heads-up game with the dealer running 200 rounds per hour, you’ve calculated the optimal bet is exactly $250 but you only have black chips in your stack (thus units of $100, $200, $300, etc.). You have about 3 seconds, what do you do? A purely rational player could ploddingly ask for change for smaller denominations slowing down the game and thus slowing down the expected win per hour detrimentally. Or, a purely rational player could think, “I don’t want to slow down the game so I’ll mentally flip a coin if heads bet two blacks if tails bet three blacks”. Or, a second tier mind self-witnessing could tune into “soft focus attention” and other “intuition” to choose whether to bet 2 or 3 black chips. And perhaps in the long run the second tier “intuitional” choice, though in some sense essentially the same as the rigidly rational flip-a-coin choice, may come out significantly better.

Further, in Andersen’s Burning the Tables book, he even includes a sort of partial “integral life practice” – suggesting specific healthy vegetarian diets, exercise, yoga, meditation, as part of how to optimally play blackjack professionally. Andersen also emphasizes relationships and understanding perspectives – the casino manager’s , the pit boss’s, the host’s all their perspectives and relating with them in a holistic manner so as to prolong your ability to play (not get ejected), and rationale for such relating that is holistically inclusive not just manipulative. Many APs participate in Stanford Wong’s web forum at bj21.com, especially the members only “green chip” pages. There I find a higher than usual portion of second tier perspectives, along these lines, articulated, especially on their very active “politics and debate” page. Some APs talk about quitting the trade due to a post-conventional moral sense. A player who wins more than he loses, and appears comfortable and confident can be good advertising for the casino, drawing in purple ploppies who want to do that too but who will lose even more. On the green chip pages APs have written about how they are concerned this may be anti-evolutionary and they intend to quit as a result. Myself, I’m not so sure it is anti-evolutionary any more than yellow-turquoise functioning successfully out in the broader society is. Purple-to-orange isn’t going to “see” the second tier aspects anyway.

This is not to say that all APs are yellow. Many are firmly only grounded in formal operational rationality. And many have a healthy does of orange athlete or chess-player type competitiveness and strive-drive. An interesting thing, which we’ve discussed on the green chip forum, is that very few ploppies transform into APs. That gives some real world evidence that stage transition in adults (especially from pre-op or con-op to form-op on the cognitive line) is not all that common, and not that easy. The majority of serious APs did not start out as ploppy gamblers; they usually eschewed casino gambling as “stupid” because they thought the house had a mathematical edge, as did I. Then at some point for some reason they become aware of or have cause to study the game and discover the AP opportunity. An example is Ed Thorp, author of Beat the Dealer, started studying the statistics of blackjack as part of his math professor job. Similarly, Peter Griffin, author of Theory of Blackjack, writes of how he disliked casinos so much that he used to sit in the parking lot while his friends would gamble, until he was asked to teach a course on the statistics of gambling. Stanford Wong seems to have grown up studying the math of gambling as a sort of child AP prodigy.

The denizens of a casino certainly provide a highly varied laboratory for human nature, and all sorts of interior aspect functioning. A Chinese woman friend of mine is a very successful commercial real estate broker. She had no interest in gambling. But once when she was doing business in Las Vegas, she decided to try some gambling. Being very business minded, she wanted some “help”. So she contacted a supposedly very advanced psychic in rural China. The plan was that she would contact the psychic by phone at an arranged time, and the psychic, in trance, would tell here how and when to play a certain slot machine to win a jackpot. When the contact was made, the psychic was in a sort of pain claiming there were two blinding bright lights/energies in the subtle realm preventing her from “seeing” anything in Las Vegas. The implication was that the big casinos hire psychic “ringers” to protect them from such efforts. So, what to make of such a story? Purple pre-op ploppies would swallow it whole-heartedly. Conop and formop would dismiss it as gullible magical thinking baloney. Yellow/turquoise might think hmm that’s pretty wild, but maybe if you’re running a multi-billion dollar casino you might want to protect your assets from all possible threats even if they don’t seem very plausible. And that may be even more reason why pure “hunch play” does not work. Only rationally calculated methods like card counting definitely work, and if you want to augment the counting method with “intuition” be careful to only apply it within the bounds of the rational parameters – on top of, or in addition to, the fully calculable aspects.

An Esoteric Society:

Early in my development as a card counter, I heard about secret online forums where trusted professional players shared information about how to beat the casinos legally and ethically, by sharing the sort of information that cannot be given in public forums (because the casinos read those forums looking for how to catch APs). So, in one of the public forums I enquired about a secret forum that I had heard about. And I got back somehow to my personal email a very abrupt “f-…off” message using the email equivalent of shouting, ALL CAPITAL LETTERS. That gave me some pause, as I am a sensitive sort of guy. Then years later, I’d learned just about everything there is to know about card counting AP from the public forums and books, and been ejected numerous times from top end casinos and even arrested and handcuffed and back-roomed and threatened by police with felony charges, though of course NOT charged because nothing I did was illegal. That was developing into an emotional low point in my AP career as I felt unsupported and isolated by those colleagues whom I felt were out there but not available for communication. Then I received out of the blue an email inviting me to join just such a private/secret group that had shunned me when I was a newbie. When this happened, I was pleased, and separately I couldn’t help thinking about the analogy to esoteric religious/spiritual groups: the tradition (at least in the old authentic) Zen monasteries of when a novice came to join as a monk. The temple head monk would say, “no, go away” and close the door on the wanna-be monk. The ritual was then that the novice would kneel before the temple entrance, maybe for days, before the priest might open the door and let him enter. Or, the stories of advanced spiritual seekers discerning and writing to a teacher requesting a student relationship and getting no response. Then twenty years later, the teacher writes to them saying thanks for your message I think you’re ready to communicate now…

Those analogies may be extreme to simple casino play, but it does seem reflective of the fact that the casino blackjack culture can be seen as a microcosm of the larger whole culture, with specific well-defined stages and lines of development that are more easily isolated and defined for study as an integral laboratory. There are also aspects of living life as a blackjack AP or professional gambler analogous to functioning as second tier in general society. Especially there is the aspect of having to function in hiding. Many second tier thinkers feel a need to hide their true values and life aspects because they’ve learned that they just don’t fit in first tier cultures. So they develop a “cover story” and sometimes “cover job” and “cover career” that looks first tier when what they’re really doing in life is much different. As an AP blackjack player, when the pit boss starts chattily pumping you for information – what do you do for a living? You know to never say “I’m a mathematician”, or physicist, and certainly not a professional gambler. Even when friends and family outside the casino ask, many APs stop telling them also, because the outsiders will just assume one is a degenerate gambler as they have no concept that a mathematically rigorous positive expectation investment-like activity could exist in casinos.

This need for discretion is an analogy to second tier thinkers in general, not a direct correlation. First tier pro gamblers need to be discrete about their profession too. But the analogy is interesting, and perhaps even further suggestive. Casino games are considered legally “games of chance”. But we find with careful application of formal operational rationality the game of blackjack has enough skill involved alongside the chance as to become a positive expectation game. We are now finding that it is the chance or probabilistic aspect of modern physics theory of matter that seems to re-open a new role for mind/consciousness or metaphysical realities in a post-postmodern world. (Of course the new physics does not explain or prove metaphysics, it just reopens a broader space for it.) And it is only after we’ve gone through formal operational rationality that we can make real use of these new understandings of ontological reality by moving into integral aperspectival vision logic and beyond. I do not recommend casino advantage play as a business, maybe like the Zen priest does not recommend the life of a monk. But the next time you think about the casino gambling culture, think through the eyes of an AP and you will see a lot more.

And by the way, I hear Integral Institute is looking for ways to raise funds. I have a very high yield investment opportunity for you … email me ;-)

-aka The Pig Barber

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Who is this Pig Barber, anyway?!


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