Many modern day professional punters have drawn from the works of the great gambling pioneers. Above all of these, it is one man whose name is constantly in the conversation about the very best in the world.

That man is Ed Thorp and he is known worldwide as an influential author and, more recently, a successful hedge fund manager, but above all else he is known as the ‘Grandfather of Card Counting’.

## Maths Guru

Thorp was born in Chicago, Illinois in 1932. His father was a military man and served in both World War I and World War II. As a result a great deal of his youth was spent without his father around.

Thorp was a maths prodigy and upon graduating high school, attended UCLA to pursue a degree in physics. After graduating he then moved onto a PhD in Mathematics from MIT, where he later became a professor.

Thorp’s interest in gambling began when he read an academic paper on the mathematics of roulette. At the time there was a long held belief that games of chance could not be beaten. Thorp didn’t subscribe to the theory and wanted to investigate further.

In a game like roulette, each spin is independent of one another. However, in other games like blackjack, every time a card is dealt the probability of future hands changes. In that Thorp saw the potential for an edge.

As soon as he had the chance, Thorp took his wife to Las Vegas in a bid to better understand the game.

## Finding An Edge

To better understand the maths behind blackjack, Thorp started to use an IBM 708, which was an early computer. Thorp, along with mathematician Claude Shannon, built a pocket sized computer that they would take with them into the casinos to help them track the edge. They then applied the Kelly Criterion to calculate exactly how much they should be wagering on each bet.

At the time, casinos didn’t shuffle the deck regularly and the games was a lot easier to track for advantage players.

From here, Thorp was able to develop his own system to track the running count of the cards.

He studied all areas of the game of blackjack. From the stats behind it, to what the correct strategy was and, of course, the different ways to track the cards that had been dealt.

## Blackjack Pro

With his new system and help from a range of computer programs he had developed, Thorp wanted to get started playing. He firstly needed to get some financial backing and was able to get a \$10,000 loan from a man with alleged mafia links.

After his first weekend of betting he was up \$11,000 and didn’t need any more loans to finance his play.

Thorp continued to be highly successful and eventually moved to Las Vegas. However, the more success he had, the more trouble he had getting bets on.

Casinos quickly started banning him from playing and he was forced to start wearing disguises so he could play at the tables.

## Beat The Dealer

As word of Thorp’s exploits spread, he started getting approached by other professional gamblers.

As his background was in academia, Thorp had no issue sharing his knowledge. The best way for him to do that, in his opinion, was to release a book.

In 1962, the first edition of ‘Beat the Dealer’ was released, covering everything from card counting to various aspects of advantage play. The book went on to sell 700,000 copies and hit the New York Times best sellers list.

The book served as the basis for many professional gambling careers, while in the modern day many have taken his work and improved it.

The now common Hi-Lo counting system was developed based on Thorp’s book and was added to later additions. It’s now the most widely used counting system to beat blackjack still to this day.

## Hedge Fund Manager

As his fame and success grew, Thorp found it increasingly difficult to play at Casinos in the US. Ever the mathematician, he turned his attention to another market all together: the stock market.

Using statistical techniques and computer models, Thorp started his own Hedge Fund and has produced strong returns over the years. His first fund made annual returns of approximately 15% in nearly 20 years of operation, all while he was still teaching at universities.

In 2003, Ed Thorp was inducted into the Blackjack Hall of Fame.

There’s no doubt that his contributions to the game of blackjack have been significant. However, he has also been a leader and inspiration for many of the great gamblers of the modern era who have taken his initial work and built on it.