The history of the BlackJack card game itself is still disputed but was probably spawned from other French games such as “chemin de fer” and “French Ferme”. BlackJack originated in French casinos around 1700 where it was called “vingt-et-un” (“twenty-and-one”) and has been played in the U.S. since the 1800’s. BlackJack is named as such because if a player got a Jack of Spades and an Ace of Spades as the first two cards (Spade being the color black of course), the player was additionally remunerated.

Gambling was legal out West from the 1850’s to 1910, at which time Nevada made it a felony to operate a gambling game. In 1931, Nevada re-legalized casino gambling where BlackJack became one of the primary games of chance offered to gamblers. As some of you may recall, 1978 was the year casino gambling was legalized in Atlantic City, New Jersey. As of 1989, only two states had legalized casino gambling. Since then, about 20 states have had a number of small time casinos sprout up in places such as Black Hawk and Cripple Creek, Colorado and in river boats on the Mississippi. Roughly 70 Native American Indian reservations operate or are building casinos as well.

In addition to the United States, countries operating casinos include France, England, Monaco (Monte Carlo of course) and quite a few in the Caribbean islands.

The first recognized effort to apply mathematics to BlackJack began in 1953 and culminated in 1956 with a published paper. Roger Baldwin wrote a paper in the Journal of the American Statistical Association titled “The Optimum Strategy in BlackJack”. These pioneers used calculators and probability and statistics theory to substantially reduce the house advantage. Although the title of their paper was ‘optimum strategy’, it wasn’t really the best strategy because they really needed a computer to refine their system. I dug up a copy of their paper from the library, it is ten pages long and fairly mathematical.

Professor Edward O. Thorp picked up where Baldwin and company left off. In 1962, Thorp refined their basic strategy and developed the first card counting techniques. He published his results in “Beat the Dealer”, a book that became so popular that for a week in 1963 it was on the New York Times best seller list. The book also scared the hell out of the casinos.

Thorp wrote “Beat the Market” in 1967, in which he used mathematics and computer algorithms to find pricing inefficiencies between stocks and related securities. Currently he is using an arbitrage formula to exploit undervalued warrants in the Japanese stock market.