Edward Oakley Thorp is widely regarded as the creator of card counting, a popular gambling technique in which players keep track of which cards have been played and which cards are still in the deck.
His book, Beat the Dealer, published in 1962, unveiled the revolutionary Ten Count system. It was not only the first winning blackjack system made available to the public, but also the first published successful mathematical system for beating a major casino game (shifting the house advantage from 5% to about 1% for the player). All modern card counting systems in use today are some variation of Thorp's Ten Count.
Thorp has an M.A. in Physics and a Ph.D. in Mathematics (obtaining the latter from UCLA in 1958). He has taught mathematics at UCLA, MIT (1959-1961), NMSU and UC Irvine(1965-1977), where he also taught Quantitative Finance (1977-1982).
Early in his career, when he was professor of mathematics at MIT, he met Claude Shannon, and brought him and his wife as partners on weekend forays to Las Vegas to play roulette and blackjack. In 1961, he and Claude even went so far as to invent the first wearable advantage-play computer. Thorp found that he was very successful, and, after using $10,000 of an underground organization's money to positively test his theory in major casinos, he felt he was ready to write one of the most definitive card counting texts ever produced.
After Thorp's book was published, the Vegas casinos tried to change the common rules of blackjack in order to thwart practitioners of Thorp's system, but customers refused to play the newer version of the game. The casinos were left with no choice but to go back to the old rules, but switched from hand-held one-deck games to four-deck shoe games, a change that the players finally agreed to accept.
In 1966, Thorp's revised second edition of Beat the Dealer was published, presenting the High-Low Count technique. Developed by computer whiz Julian Braun, it was a more potent and practical counting system for players wishing to take on these new games.
In 1967, Thorp published his next book, Beat the Market, and then started (with J. Regan) the first market neutral derivatives-based hedge fund. By exploiting a number of pricing anomalies in the securities markets, he has made a significant fortune. Princeton-Newport was Thorp's first hedge fund and it achieved an annualized net return of 15.1 percent over 19 years. In May, 1998, Thorp reported that his personal investments yielded an annualized 20 percent rate of return averaged over 28.5 years.
Thorp wrote a column for Gambling Times magazine for many years. Many of the columns were collected in a book titled The Mathematics of Gambling, published in 1984 by Lyle Stuart.
He is the founder and current president of "Edward O. Thorp & Associates" in Newport Beach, where he lives with his wife Vivian. He is also a member of the Blackjack Hall of Fame, having been one of the first seven inductees chosen.
More Blackjack Players: Stanford Wong - Hollywood Dave Stann - Sam Vaughn - Edward Thorp - Cathy Hulbert - Michael Konik - Keith Taft - Anthony Curtis - Peter Griffin - Ken Uston - Richard Munchkin - Ken Einiger - Tommy Hyland - Al Francesco - Eleanore Dumont - Ken Smith - Lawrence Revere - Steve Forte - Barry Meadow - Brian Zembic - Big Chuck Gorson - Erica Schoenberg - James Grosjean - Max Rubin - Henry Tamburin - Russ Hamilton - Jimmy Pine - Joanna Wlodawer - Joe Pane - Kevin Blackwood - Blackjack Hall of Fame - MIT Blackjack Team