On beating roulette: part 2

The second team I know of were physics students at the University of Santa Cruz in the late 1970s. I read about this before I went to college; the book is called Eudaemonic Pie. This group used the same technique, but instead of an analog computer, they used an early 6502 based microcontroller. There are many advantages of microcontrollers over analog circuitry. For one thing, it’s theoretically easier to change or calibrate the algorithm. For another, you can make more complex interfaces and change them dynamically. They also tend to break less often: a bug free algorithm will run more or less forever on an integrated circuit, wheras there are all kinds of bad things which can happen over time to hand soldered analog circuitry. Their project had a lot of problems, however.

Their biggest obvious problem: microcontrollers were new technology in those days. Things like emulators, assemblers, compilers and debuggers: things we take for granted today, these were nonexistent. Imagine trying to program your PC using flip switches … and having no output but a couple of voltage levels. That’s hard stuff. They also had too many people working on the project who didn’t materially contribute to the outcome; artists are fun people to have around, but they’re also distracting, and don’t really help you to get stuff done. Finally, there was an obvious lack of focus on solving the problem: this is a pathological engineering cycle I’ve been involved with myself. It’s easy to get distracted by things like computers. Really, the computer isn’t important: the solution is the important thing. As such, it took their team many years to reach the point where Shannon and Thorp got with 12 transistors and 5 months worth of work. In the end, the same problem which bedeviled Thorp and Shannon ended up sinking this project before they made significant profits. Home made electronics don’t work well when encapsulated into shoes and such. Many of the same team moved on to become important Scientists at the Santa Fe institute and followed Thorp’s lead in becoming Financial engineering gurus. The Santa Fe group ended up being an important influence on my personal researches, and so, even though I am a bit critical of the book that chronicled their roulette adventures, I’ll always think highly of these folks.

There are other teams who did this with varying degrees of success over the years. In fact, this sort of technology is well established enough you can buy things which do this on the internets. Don’t ask me which ones are legitimate and which ones are bunk: it’s simple enough, such computers can certainly be purchased or built without too much trouble. Supposedly UNLV professor Harry Fechter developed a device in the late 70s, though he never tried to deploy it. There was an interesting patent filed in 1982 which appears to be more along the lines of an analog computer, but same basic concept as Thorp’s idea. Professional gambler Billy Walters used an as yet undisclosed technique to pull from the wheels in the early 80s. It was probably the same technique. I found this group on the internets. They used a similar approach to that of the Eudaemons, though they appear to have been more serious people (they also did a blackjack computer), and they had rather more advanced technology available to them. The PC-2 they used, for example, was excellent, and programmable in a high level language. Others have done more or less the same thing over the years. Sleight of hand expert Steve Forte claims that he can do the whole thing visually under certain circumstances. Frankly, the effort required even with the shoe computers seems close to superhuman to me, so I didn’t even consider trying to become a mentat.

The most recent team I know of one who was very successful in (allegedly; the reports are mixed) using a laser range finder in a cellular telephone. They made a over a million pounds in London. While they were arrested, there are (or were at the time) no laws in Britain against forecasting roulette, so the judge ruled the casino had to pay up, and the team was released. You can download a short video about them here. These guys were my inspiration for giving this sort of thing a bit of thought. Where they went right: obviously their system worked extremely well. One of the reasons I think it worked so well is it probably didn’t rely on humans to take the data. If indeed they used a laser range finder, this is probably a good reason for their success. They may also have simply divided up the measurement tasks to optimize efficiency, which is another approach. If one person practiced a lot with measuring ball trajectory, and another got good at measuring rotor speed, with the third specializing in making the bets, I’m sure some efficiency could be gained in this way. One of the daunting things to me about the original Thorp/Shannon system was the idea of doing everything at once. It seems too much work for one person to manage. I’m pretty sure if they used a laser range finder, the IR might show up on a security camera. That’s a good way to get caught. Another good way to get caught (as far as I can tell; the way they actually got caught): winning lots of money on one table.

Legal issues: beating roulette using a computer is completely illegal in the United States, or at least in Nevada, where most of the roulette wheels are. This is apparently the result of a team finding using some variant of a timing system in the early 1980s, though it is unclear what team was responsible for this. This fact is not true in other countries, as we learned from the story of the folks who took the Ritz for over a million pounds. In addition to the fact that the house edge in the US is double what it is in the rest of the civilized world, I had figured on attempting this in other countries. The ideal situation is one in which the casino never notices that you are winning too much money. A hand waving back of the envelope calculation gives a number in the low tens of thousands as an fairly undetectable take.  Obviously the casino will notice when you walk away with $40k, but they won’t notice it as much as $100k or a million take; it’s something that happens often enough it shouldn’t raise too many red flags. This isn’t a wonderful amount of money like the Ritz team brought home, but it is a sustainable amount of money, and there are plenty of casinos, and one could envision doing some pleasant travel over the course of a year. Beats consulting. Doesn’t beat trading, of course, which is one of the reasons I’m talking about this instead of making it work.