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FOLLOW-UP INTERVIEW WITH $15M WINNER DON JOHNSON

by Mark Gruetze

 

Mark Gruetze writes the weekly "Player's Advantage" gambling column for the Pittsburgh Tribune-Review in Pennsylvania. He has been a skilled recreational casino player for more than 30 years, focusing on blackjack, video poker, and poker. E-mail questions or comments to: players@tribweb.com.

 

Don Johnson catapulted into the national gambling spotlight by using casino loss-rebate deals to gain the edge over the house in $100,000-per-hand blackjack.

After he won $15 million from three Atlantic City casinos Ė including $5.8 million in one day from the Tropicana Ė you might think casino managers would refuse to even think about again offering to eat a portion of his losses.

Not so, Johnson said. Rebate offers are still available, he said, although not necessarily the ones he said he negotiated between December and April Ė 20 percent off a loss of $500,000, which could be redeemed whenever he reached that threshold.

I interviewed Johnson by phone as he was leaving Atlantic City after Labor Day weekend. He had been at the Trop, where he was host for a $100,000 winner-take-all blackjack tournament. In return, the Trop donated $10,000 in his name to the Jon Bon Jovi Soul Foundation, a charity founded by the 1980s rocker, whoís a Johnson buddy.

Rebates continue to be a hot topic in the gaming world.

Mathematicians figured Johnsonís rebate deals gave him a substantial edge over the casino, especially in the first few hundreds hands.

"I think the advantage to it was a bit blown out of proportion," Johnson said of his deal. "Itís valuable, but thereís a little bit too much hype. The valuation wasnít as much as everybody is making it out to be."

He said a big part of his streak came from "over performance." Putting it more simply, he said: "A lot of it had to do with luck. Iíll take luck over skill any time."

With the new rebate offers, "itís not the same game as when I played there before," added Johnson, who said he agreed not to reveal details. Casinos make discount deals with high rollers on a case-by-case basis, he explained.

He said Caesars Entertainment Corp. has banned him from all its properties -- 52 casinos in seven countries -- even though some of its casinos continue to make discount deals with other players. Johnsonís winnings earlier this year included $4.8 million from Caesarís Atlantic City.

Casino management consultant Jim Kilby, who has 40 years of gaming experience and has co-authored three textbooks on running casinos, said discount deals are "rampant" in the industry because too many executives simply donít understand the risk they pose to the house.

"People who donít know anything about gaming think that surely these guys (in charge) are experts," said Kilby, who has argued publicly against loss discounts for more than 10 years. "That could not be further from the truth."

Kilby said gaming executives mistakenly focus on what they "can beat a player out of."

"There is no such thing as beat," Kilby said. To him, the proper term is "earn" Ė as in what the casino should expect to win based on the mathematics of the game.

A player who gets on a lucky streak will give back the profit as he continues to play and the built-in house advantage takes hold.

"If a player loses a half million dollars, casino managers feel like they won a half million," Kilby said. "You didnít win a half-million, you earned X amount.

"Whenever you have a discount on loss, youíre actually changing the mathematics of the game. Forget that Ďbeatí stuff. You need to figure out exactly how much did you earn from the player."

Kilbyís advice to casino operators is simple: Donít let the players get the edge.

"You need to draw the line in the sand and say the best weíre going to do is to have no casino advantage," he said. "I canít even get them to do that."

Kilby said ill-advised deals with high rollers arenít limited to the blackjack pit. He said he was hired to analyze a deal between a Las Vegas casino and a well-known poker player who enjoys craps.

The player received an appearance fee and promotional chips. The player bets $5,000 on the pass line, takes full odds and has up to five come bets with full odds. A bettor taking 10-times odds in craps can cut the house edge to less than 0.2 percent Ė a smaller house advantage than a strong basic-strategy player faces in a good blackjack game.

Kilby said the player would have to play at least 12 hours of craps for the house to expect to break even. However, the player never stayed for more than two. Kilby said he calculated that the player had a positive expectation of about $20,000 per hour.

Competition drives casinos to make less-than-favorable deals, Kilby said. If the poker player couldnít get his deal with one casino, he could swing it with another. If the player happens to lose, heíll lose big and the first casino will regret its "loss."

"Players are much smarter than management on the discount," Kilby said. "If a good poker player is willing to accept this deal, that should be enough reason on the face of it for (the casino) not to do that."

Kilby said card counters have become less of a threat to casinos because of continuous shuffling machines.

"Card counters are out there. Theyíre just not making anything," Kilby said.

CSMs negate card counting and shuffle tracking because essentially every hand is dealt from a fresh shoe.

"My thoughts have always been if youíve got a card counter, just get rid of them, because youíre not going to make anything off of them,í Kilby said.

"The Ďearní is going to be tiny with a card counter. Itís just not worth the headache."

After Johnsonís big score, he became something of a tabloid star. Gossip columns said he paid $192,000 for a bottle of champagne at a party in London. Johnson said he didnít remember how much the bar tab was but it "wasnít even close to that number." He said he was among about 14 people who split the bill.

"We were all joking around, taking pictures with the bottle. I didnít expect to it to wind up in the international press," he said.

"I donít even drink champagne."

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