CHAPTER 11

Let It Ride

The House Money Effect

I hold the Fates bound fast in iron Chains
And with my hand turn Fortune’s wheel about, . . .
—Christopher Marlowe, Tamburlaine

I was eight years old when I lost my lucky aggie shooter marble to Jerry Cutler playing immies. It was streaked with colors. Jerry was one of the older kids. He acted as the owner of a gambling establishment, a rake; his turf was the walls and sidewalks outside our six-story apartment building in the Bronx. On summer afternoons the street smelled of chestnuts and peanuts from a pushcart vendor. A noisy street. If the rag and junk wagon were not clanging pots and hubcaps together, a knife sharpener might be flying sparks at screeching high frequencies over the clamor of unending street games active in uninterrupted concert. The corner of Harrison and Tremont was alive night and day, neighbors chatting about the good old days that seemed to be few but memorable, the hard old days when everything was a challenge, the war days, Depression days, those days—“not like now when children have everything so good”—and these days with the outrageous price of gasoline at twenty-one cents a gallon and the price of a gallon of milk for just about the same amount. These regular symposia happened during bridge games on unsteady card tables or while small groups of mothers met to knit sweaters for the next winter six months away.

The games had variations. To start, each player placed one marble inside a square drawn on the sidewalk. Players took turns shooting marbles from some set distance with the flick of a thumb against an index finger to knock as many marbles as possible out of the square. A player got to keep any marbles he knocked out. Jerry’s take was different. He had a cigar box with three holes cut out, each slightly bigger than the next. If a player shot his marble into any of the holes he would win one, three, or five of Jerry’s marbles, according to the size of the hole. Any marbles that didn’t enter the box through one of the holes was Jerry’s to keep. The odds were always on Jerry’s side and he bankrolled the house as if he were Diamond Jim Brady.

We didn’t only gamble for marbles. We also pitched pennies against a wall—the closest to the wall won all the other pennies of the round. We flipped and traded baseball cards, and sometimes spun playing cards for pennies. But the loss of my aggie was a heartfelt blow. My big brother gave it to me along with a Phil Rizzuto card and a 1939 New York World’s Fair three-cent special issue postage stamp he once traded with Jerry Cutler for a piece of loadstone. So I had to win that aggie back. Jerry offered me a chance. Get a shooter through the smallest opening—about the size of my special issue postage stamp—and I could have my aggie back. I shot and lost another less favored marble. I shot again and again and came closer and closer. One went in and bounced back out.

“That doesn’t count!” Jerry shouted.

“Why not? The rule says you just have to get it in, not that it has to stay in!” I argued.

But Jerry was much bigger and in the Bronx, bigness earned respect.

Those close shots became the teases for more challenges to recoup my losses. I was down to my last two shooters after losing bags full. They were my dullest marbles. With each shot, I thought I had luck behind me. And then it happened. With a crowd of kids watching from the sides, yelling and screaming like spectators at a cockfight, my next-to-last shooter disappeared through the small hole in Jerry Cutler’s box. All I got back was my color streaked aggie shooter.

Now, I was a normal kid, with a normal feeling that something as special as that aggie given to me by my big brother must be a lucky thing, a thing to bring me luck. So what was I to do but challenge Jerry to get my sack of marbles back and break even? It was a lesson in luck, for not only did I lose, but I had to trade my Phil Rizzuto card for five more plain shooters and then my 1939 New York World’s Fair three-cent special issue postage stamp. By the time it was all over, I was behind by fifteen marbles and had lost my other treasures. Quite a lesson for an eight-year-old!

You would think I’d have learned a lesson. No! Soon I felt lucky again and started gambling again, this time for money. The stakes were small, just pennies and nickels, but I wasn’t playing for the value of money. Rather, it was for the testing of luck—my luck. I felt—through an eight-year-old boy’s kind of thinking—that I had a certain power over the odds, a certain control that I couldn’t explain, except to tell myself that if I willed an event to happen, it would by a kind of voodoo control over nature. That feeling would not leave me until much later in life when the boy in me grew up to learn that voodoo contradicts too much of what we know about science.

And yet . . . .

Knowing all that I know, at times I still resort to a sort of reverse voodoo when I’m anxious about some danger that may involve a loved one miles away. I try hard to hold thoughts to prevent any harm. As the watched pot never boils, so the thought of bad events will never happen. Thinking of winning the lottery seems to make that unlikely event even more unlikely.

But shooting marbles is not purely luck. It takes coordination, not any understanding of your opponents the way poker does, but there is another kind of skill involved that uses the force, speed, and spin you put on the marble.

In my boyhood years it seemed that everyone in my neighborhood gambled at something. My father and friends’ fathers spent Saturday afternoons at Yonkers Raceway betting on trotters. We kids weren’t supposed to know that, and we surely were not supposed to know that fathers bet part of their weekly pay on numbers. But it was hard to avoid the talk on street corners where bookies stood conspicuously receiving envelopes from passersby. Winning at numbers was purely a matter of luck, though many players would deny that. It seemed that players labored at convincing themselves that there was skill at picking numbers.

So, of course, we kids were smart enough to know that gambling was not a privilege reserved for grownups. We couldn’t play the numbers or horses, but by the time I was a teenager, gin rummy was the sport of the neighborhood and money in the form of small coins was rapidly moving between players, and being collected by just one or two players. Some seemed to think that luck was responsible for their success. “He has all the luck!” was the refrain heard at the end of every card game played by Tony Luce—Lucky Luce, we called him. Some said he cheated, others that he had some spiritual gift. The gift was right, but it wasn’t spiritual. He played an intense game and knew how to play it, not just with cards but also with humans and human faces. Rummy, poker, and blackjack were played to blasting music so betting could remain covert and bigger pots of money could exchange hands. After a while nobody would play with Lucky, so he would move on, block to block, to places where his reputation was clean, to where he could muster a blackjack or poker game before being suspected of cheating or hustling. Not everyone was naive and not every neighborhood was as accepting as ours, so he would often return grateful to get away with just a black eye or nosebleed.

We first started playing on a stoop in front of Lucky’s house directly in front of his mother, who sat on a folding chair forever peeling potatoes, never saying a word to anyone but Lucky. At the time, we all thought that Lucky was—well, simply lucky, even though we were suspicious that it was not entirely luck. I know now that playing gin rummy (a card game whose name suggests its original stakes) can be almost entirely skill—almost, because the player still has to have some luck in getting a lucky hand. I know now that a good player could know exactly what cards are in his opponent’s hand without cheating.

Mathematics of dealing from a deck is just one element of a card game. Memory, psychological deception, courage, money management, and analysis of an opponent are five additional essentials. To appreciate the extremes of card-playing skill, take the case of the Stu Ungar story. Stu was a professional, one of the best. As in all poker-like games, the object is to acquire a hand of highest value. In reality, Stu was one of the greatest poker players. The following dialogue is from the movie version of the story of his career. He is at a gin rummy game with casino mogul Leo the Jap.

DEALER: If Stu wins this next game that will be about $8,300 total, Mr. Leo.

LEO: Nice run of luck.

STU: Oh, it ain’t luck.

LEO: What then?

STU: I know you.

LEO: (Snickering) You know me?

STU: Yea, so I know what you got.

LEO: Ah, any good gin player learns that.

STU: Yea, but I know now.¹

The dialogue comes from a movie script, but it is an excellent portrait of the skills of a master gin player. It’s also likely that the actual Stu Ungar had such a skill. A good poker or gin player knows not only the cards but also his or her opponent. A few games are played just to study moves, expressions, habits, hesitations, clothes worn, where drawn cards are placed in the hand, and all those imperceptible, unremarkable movements that to novice card players would be invisible.

LEO: After four discards? Impossible!

STU: Double or nothing says I know.

LEO: That’s a bet.

Real gamblers take risks to place bets within bets. Real gamblers know that their wagers are mixtures of knowledge and luck. They also know that their ratio of luck to skill is usually quite small, something the recreational gambler doesn’t get. Stu knows nine cards in Leo’s ten-card hand—he’s not lucky-guessing, but knows for sure and isn’t cheating.

LEO: So ah . . . talk to me, little master.

STU: Well . . . I know you have a pretty decent hand cause ya always move forward when the cards look good to ya on the deal. Now that means ya got two spreads cause if ya had three when I hit you with the king of diamonds ya would have knocked . . . which ya didn’t. Since I got the queen of diamonds . . . ya got kings.

LEO: (Shows three kings.) Brilliant!

STU: Oh, not really. See, but do ya know you always keep your low spreads on the right side of your hand . . . yea, ya do. But with aces, for some reason, ya start on the left until for some reason ya move them over. Now that’s interesting, right? (Leo shows three aces.) And, I also know ya really, really hate to throw middle cards early, except if you’re protected and fishing. So I would bet that seven of hearts came off a pair of them. Since I got the six of hearts, ya got the eight of hearts. . . . (Leo shows the eight of hearts.) Along with the eight of clubs . . . (Leo shows the eight of clubs.) The six of clubs . . . (Leo shows the six of clubs.) And the seven . . . let’s see . . . it could be spades or diamonds—I’m not really sure, not that it would matter.

Now Leo is also a brilliant poker strategist who can find his opponent’s weak points. He knows Stu. Thinking fast, he offers Stu an alternate bet, a bet he knows Stu would not refuse.

LEO: All right, all right, kid you made your point. How about we just call it an even ten grand and be done with it?

At this point Stu could have walked away from the table with ten thousand dollars. But greed grabbed him and he felt sure that he knew that Leo had a seven of diamonds and wanted to complete the original bet of doubling the $8,300. This is another point where Stu thinks he knows Leo—in reality, he is guessing, using luck. He’s not thinking, I’m feeling lucky so I’ll take a guess. After all, he’s narrowed it down to even odds that he’s right. It’s either spades or diamonds. He could have flipped a coin, the kind of thing the amateur would have done. No! He knows it’s a coin flip, but he has more information up his sleeve. He needs to know the bias in the coin flip. He hesitates. “I’m not really sure,” he says while trusting his keen character judgment skills to determine the bias.

STU: No. Nah, I don’t think so Mr. Leo. You’re kind of a diamond guy with your suit and ah rings and stuff. So I’m gonna say diamonds . . . yea, seven of diamonds. Now personally I would have kept the 7, 7-8 nutcracker together and risked the six . . . but that’s just me.

LEO: I really admire your courage kid, but this makes us even. (Shows seven of spades.)

One may think this is fiction. We know that rummy requires the usual skill of keen surveillance of cards in play. But how could someone know his opponent’s cards simply by observing characteristic behavior? Perhaps one card could be determined—but two? Three? Four? Five? Stu Ungar was phenomenally gifted. But we should not think the skill impossible. Inexplicably gifted humans are capable of performing the most astounding feats. Just watch Serena Williams play tennis, Francis and Lottie Brunn speed-juggle, or Philippe Petit walk the high-wire, or listen to Van Cliburn play Tchaikovsky. Stu Ungar also had a gift.

Despite winning millions during his poker career, Ungar died at age forty-five in a Las Vegas motel room on November 22, 1998, with no assets to his name.

In this dialogue we see a mysterious mixture of skill, greed, and luck—all woven into an illusionary control of destiny. And it is that kind of control that drives the forces of the game. It is the same control that comes from the feeling that luck is a matter of defeating destiny, that games of pure chance are games of out-and-out skill. Such control was well understood in much of Dostoyevsky’s writing but it was most particularly relevant in The Gambler where Antonida Vassilievna Tarassevitcha, the Grandmother, a rich, seventy-five-year-old invalid and grande dame of Moscow, comes to Roulettenberg, a fictitious German spa town with a casino, and makes a commotional grand entrance into the roulette-salon where she is wheeled to the roulette table. She plays with her peculiar notion of luck by repeatedly giving Alexis Ivanovitch, the narrator, ten gulden coins to stake on zero. When he tells her that the number of chances against zero is thirty-six and that zero had turned up just moments ago, she retorts, “Rubbish! Stake please.”²

Alexis Ivanovitch is the tutor in the entourage party of the Russian general Zagoryansky. The entire story takes place in the mythical town of Roulettenberg, where we find some traces of reminiscent reflections of Dostoyevsky’s own gambling escapades at the tables of Wiesbaden with the beautiful Polina Suslova and borrowed money from the Fund for Needy Authors.³

Alexis Ivanovitch warns her that zero is not likely to turn up again that night. To this, she insists, “Rubbish, rubbish! Who fears the wolf should never enter the forest. What? We have lost? Then stake again.” A second and then a third stake of ten gulden were lost. By that time the Grandmother could not sit still. And when the fourth stake was lost, she was fuming at the croupier, “To listen to him! When will that accursed zero ever turn up? I cannot breathe until I see it. I believe that infernal croupier is PURPOSELY keeping it from turning up.” This time she gives Alexis two gold pieces (twenty gulden). When he protests, she exclaims, “Stake, stake! It is not YOUR money.” So the two gold pieces are bet. The ball goes spinning round the wheel before settling into one of the notches. The Grandmother sits petrified, with Alexis Ivanovitch’s hand rigidly clasped in hers.

“Zero!” calls the croupier.

Now I have to tell you about my dream. It is a story of control similar to that of the Grandmother in The Gambler. In the dream I win eight million dollars on a promotional quiz game after answering the question, “Who is the author of a book published in 1900 called The Interpretation of Dreams?”

In the excitement, I half wake from that dream into a dream one level up toward real consciousness. Very disappointed that I actually won nothing, I withdrew a hundred thousand dollars from my bank account and hopped on a Greyhound bus to Atlantic City where I took a seat at a roulette table. I put $5,000 on zero (supposedly the house limit) and calmly watched the croupier spin. The ball spun smoothly, whirring, around the rim and landed in notch 27. With another $5,000 on zero I sat, eased by the thought that I could continue betting on zero another eighteen times. The croupier called out 6. I staked another $5,000 on zero, rightly thinking any number is as good as any other, so why not leave my chips on zero? Again I lost and placed another bet on zero. I again lost. But on the seventh stake, the ball seemed to hum more silently around the rim before spiraling into a pocket and I thought I saw that it had fallen into the zero pocket, though I could not be sure before the wheel slowed down.

“Zero!” cried the croupier with a glance toward me.

I was ahead by $40,000 and should have quit at that moment, but, I think, the $40,000 is extra money to play with, so what the hell! A crowd gathers as I put my entire winnings on zero once again. (Somehow the dream forgot that the house limit was $5,000.)

The croupier gave me a quick glance, probably thinking, what a fool. The wheel was spun and ball tossed to whirr, as it always does, around the smooth rim before it finally came to rest in one random pocket of the silent spinning wheel.

“Zero!” called the croupier in astonishment.

And behold, the lucky man in this gambling sea came up with a $1.4 million fish in his mouth.

Now, let’s take a momentary break from this story to think about what the average person would do at this moment. One choice would be to just walk away from the wheel. But wait: Why not play with some small part of the house money? Say, $400,000? This is falling into a gambling trap called the house money effect, the impression that money in the pocket given away by the house is free to be gambled at high risk. Or, perhaps more cautiously, $40,000? After all, the chances of the ball falling on zero again are the same as they always were—1 in 38. What can be done once, can be repeated. And that’s exactly what my dreaming sleep brain thinks. I can make thirty-five $40,000 stakes with the house’s money, so surely I have a reasonable chance.

But this dreamer made stake after stake of $40,000 all night. Croupiers changed guard and by the thirty-fifth wager I had wiped out all my gains. My next bet would have to be with my own money, and being accustomed to $40,000 stakes, just three would wipe out the $100,000 I had when I arrived in Atlantic City. But a real gambler keeps a history of his winnings in mind, and I could not forget that just hours earlier I had $1.4 million in my pocket. I had to retrieve what I once had, even though what I once had was house money. So, again, I staked $40,000 on zero.

“Fifteen!” the croupier called, careful to avoid a noticeable glance at my eyes.

And once again, I put down $40,000 worth of chips.

“Twenty-one, red!” yelled the croupier.

I had lost $80,000 of my money and was entrapped by a break-even effect. So I continued to gamble and lose until I was so much in debt that I could no longer retrieve my losses without borrowing. But borrowing put me more in debt to my lenders. We see how things can turn so quickly. I would forever chase my losses. Fortunately for me it was all just a nightmare. But not everyone is so fortunate to learn so much from a dream.

Chasing losses to break even is the gambler’s peril. Studies show that novice gamblers track their account balances mentally with a tendency to update winnings and not losses.⁴ Excessive gamblers tend to recall long strings of losses ending in wins and thereby disregard their losses as means to ends. Frequent and prolonged gambling inevitably involves frequent losses, losses that generally outweigh gains by a sizable margin. But the losses are forgotten and the big gains not. The mind tends to discount losses in the face of possible wins. In everyday life such discounting may be necessary for survival, or at least protection against discouragement. Biased memories adhere to the illusion of control to rear the kind of behavior that favors omnipotence, the feeling that luck is a matter of beating chance, the imprudent belief that even games of pure chance, such as slot machines, roulette, and lotteries, are games of skill.⁵

That fantasy of controlling chance—the overconfident belief in one’s personal luck—is the gambler’s illusion. It is the daring that confuses chance with skill. The psychologist Ellen Langer experimented with the notion of confidence in gambling games. According to her, even in games of pure chance and no skill, the well-dressed gambler feels more confident and wagers more aggressively against disheveled opponents than against the better groomed. Langer’s experiments involved a game of simply drawing cards from a well-shuffled deck—highest hand won. The more dapper gambler took riskier chances under an illusion of being better at controlling chance than his or her opponents. Such exaggerated confidence does seem to increase the probability of winning when the game involves skill; for example, in poker, the self-assured bluffer is better at deception than the timid bluffer who reveals him-or herself through uneven performance.

Casino corporations have researched gambling preferences and habits to learn which games, machines, and environments encourage further play. They have tweaked the environment to influence everything from the number of gambles per minute to jackpot sizes in order to affect the illusion of skill and arouse moods of impending good fortune to entice further gambling.⁶ These corporations understand that the attraction is the rapid payout, the broad range of odds, and the high degree of emotional involvement. One wonders why they don’t just give away a few coins to hook punters.