Retiree re-invents himself as professional blackjack gambler
In what is surely the most unlikely of "encore careers," Dravot works as a professional gambler.
For 33 years Dravot often gambled in real estate development to keep his 250 employees at work. "There were times I had to remortgage my house on a Thursday to make payroll," he says. But he only set foot in a casino a handful of times.
By 2004, Dravot saw the recession coming and closed his business. "I got out whole," he says, "though not as whole as I wanted to be. At 30 you think you're going to conquer the world. At 60 you realize the world has conquered you."
Bored with TV, Dravot searched his bookshelf for something to read and came across a book on blackjack strategy he'd bought 25 years earlier. He studied card counting, the system by which you assign a plus or minus value to cards in order to keep track of them. Soon he was making money at it.
And even though card-counting is perfectly legal, casinos don't like losing. "The casinos are there to take the money from the foolish and the stupid," he says. "They frown on people using their brains." Which is why Dravot's been thrown out of dozens of them. And uses a pseudonym.
Dravot's system is actually no different than the one used by hedge-fund managers to calculate risk. Indeed, billionaire Bill Gross, founder of Pimco, the world's largest bond fund, started his career playing blackjack professionally. And Beat the Dealer author Ed Thorpe, the MIT mathematician credited with creating the system of blackjack card-counting, went on to make a fortune in the securities market.
Now Dravot has simplified that system, taking out all the heavy division to provide a methodology for the average person.
Here are some of the tips you'll find in his book The Color of Blackjack. They apply equally to business as well as cards.
1) Make sure you're adequately financed. Dravot says to measure your bet size by your bankroll. For instance, with a table minimum of $5, you can't possibly make any money if you've only got $50. You'll need at least $500 so you can lose a few hundred before you start winning.
2) Get the best deal. Some blackjack tables play with a single deck while others can play with as many as eight, which favors the house. That is, unless the single-deck table is paying 6 to 5 instead of the traditional 3 to 2. "It's like a restaurant offering two different sets of prices," Dravot says. In other words, perform due diligence.
3) Pay attention. Unlike dice, which have no memory, blackjack depends on a "sequential event." The more cards the house deals, the fewer there are in the deck. So you should start with small bets, then increase as you gather information.
"Blackjack's taught me to stop and think, 'Where's the edge and who has the advantage?'" Dravot says.
Nowadays, Dravot lives on the road 250 to 300 days a year. After being single for 25 years, in June he married a woman who worked for his company for 28 years.
"I could be spending my money on greens fees every day," Dravot says. "Instead we're out having fun."
And that, my friends, is The Upside.