Casinos As Spies For The Federal Government

The following notice has not been
approved by any government official.
(In fact, some of them would probably be
unhappy to see this warning published.)


By  Professor I. Nelson Rose

FinCENIf you win big, are a high roller, or do anything that a casino or the government regards as suspicious, you will be reported to the U.S. Treasury Department’s Financial Crimes Enforcement Network, commonly known as FinCEN. The information will be made available to the IRS and your local law enforcement agency. Expect your taxes to be audited. If you are ever involved in a messy lawsuit, your opponent may be able to obtain some of this information by subpoena, to show, for example, how much cash you used for gambling. The casino will not always tell you when it files these reports; in fact, under some circumstances, it is not allowed to let you know that you have been reported to FinCEN.

Scary, isn’t it?

All businesses are supposed to report cash transactions over $10,000. But only “financial institutions” are required to file detailed reports and have compliance programs in place to make sure the reports get filed. And only “financial institutions” have to report “suspicious activities” involving more than $3,000 to FinCEN.

It may come as a surprise to most players and even executives in the gaming industry that large casinos and card clubs have been defined as “financial institutions.”

It will certainly be a shock to most players to learn that they may be the subject of secret reports filed by casinos with the federal government.

All casinos and card clubs with gross annual gaming revenues in excess of $1 million must file Currency Transactions Reports (CTRs) with the federal government every time a player has a cash transaction of more than $10,000. This includes players using currency to buy chips, deposit front money, pay off markers, make large wagers or collect large winning bets.

The last is particularly interesting, because the original purpose of CTRs was to track crooks who were using casinos for money laundering, like a drug dealer who bought gaming chips with $25,000 in small bills, made a few token bets, and then asked for a cashier’s check for his remaining chips.

In the mid-1980s Nevada officials, including its then-powerful Republican senators, convinced the federal government that there was no need for casinos to file CTRs when the cash was paid by casinos. Nevada enacted Regulation 6A, which required casinos to file CTRs only with the state, and only for transactions that might involve dirty money, like cash buy-ins or marker payments.

But Nevada gaming officials, apparently at the request of the federal government, changed the rules in 1997. All currency transactions of more than $10,000, even slot jackpots paid out in cash, now have to be reported. And today CTRs are filed with the IRS, not with the state.

The U.S. Congress, which is supposedly the body that actually makes the laws, had established complicated rules for withholding taxes of gambling winnings, but only under special circumstances. For example, a sports book has to withhold 28 percent of the amount won, but only if it is more than $5,000 and at least 300 times as large as the amount bet.

For years the IRS has gone further by requiring casinos to report big wins at bingo, slot machines and keno, even though no money was withheld for taxes.

Today, a CTR must be filed on every patron who cashes out for more than $10,000 in currency — no matter what the game and even if the player has lost money gambling.

The regulations also used to require that casinos obtain identification from the player before filing a CTR.

Today, a casino does not have to ask for a player’s i.d. if it already has the patron’s name, address and similar information. This eases the casinos’ workload and prevents disruptions. But it also means high-rollers do not have to be told when the casino files CTRs with the IRS.

The reason for the changes is simple: The Treasury Department has admitted that one of its primary goals is to go after untaxed cash transactions that have nothing to do with money laundering.

But Treasury still wants to catch drug dealers. So, it has taken the next step: Suspicious Activity Reports – Casinos or SARCs, to be filed with FinCEN.

As this is being written, only Nevada casinos have to file SARCs, although FinCEN intends to require all casinos and card clubs to report suspicious activities.

What exactly is a suspicious activity?

The amount does not have to be more than $10,000; a total of $3,000 or less can trigger a report. Nor does it have to involve any currency.

FinCEN likes to say the standard is know your patron. But the actual regulation is more vague, including phrases like a casino employee has reason to suspect that the transaction has no business or apparent lawful purpose.

Casinos face large fines if they fail to report suspicious transactions, and they cannot be sued for filing SARCs when players were doing nothing wrong. So, when in doubt, casinos will err on the side of filing reports on their patrons.

It is against the law for a casino to tell a player that it has reported his suspicious activity to FinCEN.

This might catch more crooks. But it is hard to picture casino executives as secret police.

Professor Rose can be reached at his Web Site:

#66 ©2000, all rights reserved worldwide. Gambling and the Law™ is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, CA.

What are the top blackjack play variations…

… that yield the greatest gain for card counters?

By Michael Dalton

Illustrious 18 play variationsThe top play variations for blackjack card counters are knowing when to take insurance and stand on 16 versus a dealer’s 10. The top 18 plays, known as the Illustrious 18 are show in the table below in order of importance 1)The gains cited are associated with a player spreading bets from 1 to two hands of 6. These are the average gains for flat betting multiplied by the average bet one has out when he makes the departure.

These top plays were recommended by Donald Schlesinger in an important study published in the September 1986 issue of Blackjack Forum. The study suggested that players might just as well forget all of the other play variations and stick to the top 18 plays since this is where most of your profitable gain is going to come from. In December 1995, Schlesinger continued his study to include the top surrender plays which have become known as the Fab 4:

Fab 4 play variationsThe analysis and discussion that presented the above conclusions can also be found in Donald Schlesinger’s book Blackjack Attack, which was first published in 1997. This book includes some of the most important technical insights into the game of blackjack ever published.

Play variations (variations you make from basic strategy) are what card counting index numbers are all about. They can be very important in single deck and become less important as decks are added to the game. Each card counting system assigns unique index numbers for these plays. For example, in the Hi-Lo system the Insurance index for a 6-deck game is 3.0. This means that the player’s best technical move is to take insurance if the “true” count is 3 or higher. If the player has a 16 versus a dealer 10 the Hi-Lo index number is 0. This means that the player should “stand” if the count is greater than or equal to 0 and “hit” otherwise.

Although these top play variations are technically correct you may have difficulty implementing some of the plays from a camouflage point-of-view. For example, the casino pit will often watch players who correctly take insurance on bad hands and decline insurance on good hands. Splitting ten valued cards is another give-away that you may be counting cards. The saying is that only two types of players split tens — idiots and card counters. If you don’t look like an idiot at the table they may just suspect that you are counting cards. Many counters have given up splitting tens for this very reason. However, insurance is too valuable a play variation to ignore. If you need to mix-up your play I would suggest you consider taking even money on small bets occasionally when the count does not justify it.

When you are ready to add more play variations to your repertoire you may want to consult Peter Griffin’s book, The Theory of Blackjack and the article “The Most Important Plays in Blackjack” published in the Summer 1992 issue of Blackjack Review Magazine.


[ The Illustrious18 ] [ The Fab 4 ] [ The Hi-Lo Count ] [ Blackjack Apprenticeship: What are Blackjack Deviations ]

Copyright © 1994 – 2020 All Rights Reserved
FAQ 12: Originally published in Volume 7 Issue 1 of Blackjack Review Magazine



1The gains cited are associated with a player spreading bets from 1 to two hands of 6. These are the average gains for flat betting multiplied by the average bet one has out when he makes the departure.

What is the best card counting system?

By Michael Dalton

Dealer Dealing BlackjackThere is no such thing as a “best” card counting system unless you are a robot, in which case you would be keeping track of each and every card. Humans, on the other hand, have limitations. For shoe dealt games, all card counting systems perform within a tenth of a percent (or so) of each other. For single deck games, a balanced multi-level count with an ace side-count can show a significant theoretical improvement over unbalanced and single-level counts, however, the player runs the risk of mental fatigue and errors. The bottom line for most players is that “simple is best!” I recommend the Hi-Lo, Red Seven, K-O or Zen for shoe games and the Hi-Opt I, Zen or Omega II for single-deck. What is the best all around count? I like the Hi-Lo because it allows me to concentrate on more important things… like convincing the pit boss that I am a loser!

Obviously, the answer to this question is not as easy as it appears. Several approaches have been used in the past to evaluate card counting systems. One analytical approach is the calculation of several performance parameters (e.g., playing, betting, and insurance efficiencies). The results are then used to approximate the potential of one system over another. Another approach that is used is to simulate each system against typical game conditions on a high speed computer. Simulations can provide an accurate real-world estimate of the advantages and win-rates that are possible in playing a particular system.

However, the problem with coming up with a ‘best’ card counting system is that you can always come up with a ‘better’ card counting system. Instead of a single-level 1) A single-level count assigns point values in such a manner that the non-zero point values are the same in absolute value, namely +1 or -1. The single-level Hi-Lo count, for example, assigns 2 – 6 as +1, 7 – 9 as 0, and Tens and Aces as -1.  ‘unbalanced’ count you could assign more accurate point values to each card and determine true counts by the exact number of decks or cards remaining. You could improve ‘playing’ efficiency by assigning a ‘zero’ to the Ace and side counting each of them. You could also side count other cards such as 7s, 8s, and 9s thus improving your play against specific hands. You could also incorporate play variations (changes to basic strategy) based on specific counts by remembering ‘every’ index number for ‘every’ play possible. To improve the accuracy of your insurance decisions you could also keep a separate count of all the tens in the deck or shoe. Of course, you don’t want to forget all the ‘practical’ advice each system offers in regard to betting, playing, camouflage, and other tips and tricks of the trade.

Peter Griffin, author of the classic text The Theory of Blackjack, wrote “If one’s ambition is to raise overall strategic efficiency beyond the 70% level, perhaps as high as 90%, it is imperative that the primary system be quite simple and hence allow great flexibility for incorporating several auxiliary, independent sources of information.

I believe the above comment was one of the most important suggestions ever made about card counting. Griffin suggested that it may be better to keep your base count simple to allow your brain the ability to perform other tasks and to utilize other sources of information. These other sources of information can often improve the potential of a single-level count over an advanced 2- or 3-level count that doesn’t use this information. This information includes side counts, shuffle tracking, ace location strategies, key card techniques, and dealer errors. My own experience at card counting has shown that Griffin was probably right.

Human error is another reason to keep it simple. The most advanced card counting system in the world is not going to do you any good if you can’t play it accurately. Thus, the best card counting system may be one that perfectly balances theoretical power and your human ability to execute it accurately.


Copyright © 1994 – 2020 All Rights Reserved
FAQ 11: Originally published in Volume 6 Issue 4 of Blackjack Review Magazine



1 A single-level count assigns point values in such a manner that the non-zero point values are the same in absolute value, namely +1 or -1. The single-level Hi-Lo count, for example, assigns 2 – 6 as +1, 7 – 9 as 0, and Tens and Aces as -1. 

Isn’t card counting illegal?

Scales of JusticeBy Michael Dalton

No! It’s no more illegal than using your brain to add up how much money you have in your wallet. But that doesn’t mean they won’t kick you out for trying! In most casinos in this country casino management has the right to bar players for any reason they want. Most casinos are considered private clubs and if they don’t like you they can ask you to leave. In Atlantic City, New Jersey, casinos cannot bar you but they are allowed to implement specific countermeasures that will reduce if not eliminate any profit potential you previously might have had.

If casino management suspects a player is a threat to its bankroll they will usually implement several countermeasures, which include reduced deck or shoe penetration and shuffling up. Psychological tactics are also often attempted to distract the player and to convince him or her to leave. Some less than reputable casinos may even implement cheating countermeasures — such as preferential shuffling. If all else fails, a suspected card counter may be asked to leave and/or to refrain from playing blackjack any further.

In Nevada, the courts have made it clear that card counting is legal. During a cheating case in 1983, which involved a player who was crimping cards to gain an advantage (definitely cheating), the court made an interesting statement: “By way of contrast, a card counter — one who uses a point system to keep track of the cards that have been played — does not alter any of the basic features of the game. He merely uses his mental skills to take advantage of the same information that is available to all players.” As I. Nelson Rose, author of the book Gambling and the Law*, states — “The card counter is playing by the rules of the games, as set up by the casino regulators and the casinos themselves.”

When I play blackjack I sit there and watch the cards. I use my brain to make decisions. I risk hard earned money on individual outcomes that are far from certain. If card counting were considered cheating then casinos would probably have little signs stating, “Thinking in this casino is forbidden! Players found using their brain to make decisions will be asked to leave.”

In a similar vein… if a dealer unintentionally flashes his hole card and a player sees the card, would it be considered cheating for the player to make use of this information? Of course not! The player is still playing by the rules of the house and is simply using all the information that is presented to him. Of course, if the dealer is intentionally flashing his hole card then that would definitely be considered cheating in every court in this country and both player and dealer could be charged with an illegal act. [If the dealer were intentionally flashing it to a third part confederate, an innocent bystander who didn’t know he was flashing intentionally wouldn’t be guilty of anything; but, he might have a hard time proving he wasn’t in on the caper!]

Although card counting is not illegal from a technical point of view, in some countries you still might find yourself behind bars, forced to return monies won, or worse! You are on your own in some of these third world countries where the law is often undefined.

Professional players are at the greatest risk because of the betting level they play at and because of reporting agencies such as Griffin. The Griffin Detective Agency of Las Vegas, Nevada publishes a monthly list of blacklisted players to casinos around the world. This list includes suspected cheats, con artists, card counters, and even card counting team members. If you are in a foreign country and they notice that you are on this list they may just throw you in jail… not bothering to make the distinction between being labeled a cheat and someone who uses legal card counting techniques.

*Editor note:  Since this article was originally written, I. Nelson Rose and Robert A. Loeb had collaborated on the excellent book Blackjack and the Law.  Also, Robert Nersesian’s book The Law for Gamblers is a must read.  Another good article on whether card counting is legal or not is on Norm Wattenberger’s site

Colin and Ben from Blackjack Apprenticeship discuss “Is Card Counting Illegal?

Copyright © 1994 – 2020 All Rights Reserved

FAQ 10: Originally published in Volume 6 Issue 3 of Blackjack Review Magazine


How much money can I expect to win if I count cards?

By Michael Dalton

Money in the HandTo be perfectly honest, you stand a fair chance of losing money in this game! It all depends on your skill level, bankroll, the level of risk you are willing to take, and the quality of games you play. Assuming you balance all of these factors, the theoretical long-run advantage a skilled card counter can obtain is between 0.5% and 1.5%. This is not to say a player can not have a greater advantage on any individual bet or circumstance, however, in the long run a player can expect to win about 1% of the total sum of his “action”. Therefore, if your average bet is about $25 and you play 75 hands an hour you might expect to make about $19 an hour. But be forewarned… your mileage will vary!

I generally tell players that they can expect a winning streak as often as a losing streak in this game. You will often go for days, if not weeks and possibly even months questioning your ability playing blackjack because of losses. But you will also go through periods where you will feel invincible and unable to lose. During both of these periods your discipline will be severely tested. In the long run, if you are a good player, are not being cheated, and can get away with it, you should show a profit.

Basic card counting is not the only legal way to make money at this game. You can milk the comp system. You can use casino coupons. You can shuffle track. You can join a team. You can take advantage of dealer errors and mistakes. You can exploit casino promotions and new variations. I would estimate that it is possible to achieve at least a 2% win-rate in blackjack if you are an advanced player and use some of the above tricks and methods.

Milking the comp system is a true art form. It is getting tougher these days due to computers, however, it is still possible to achieve more than your fair share of comps. According to Max Rubin, author of Comp City, more than half a million dollars worth of complimentaries (free drinks, food, rooms, shows, limo rides, airfare, golf, and more) are handed out every day in Las Vegas. On weekends and holidays, comps climb into the millions.

Casino coupons are also wonderful! From those simple lucky buck coupons and free meals to discounts off your room — if you use them often I guarantee they will become like extra cash in your wallet. You can often find good coupons in local newspapers and magazines and through publications such as the monthly Las Vegas Advisor.

Shuffle tracking 1) Shuffle tracking is an advanced form of card counting.   A complete tutorial and expose of shuffle tracking can be found in Arnold Snyder’s 3-issue Shuffle Tracking Series from Blackjack Forum Magazine.   is an advanced area of card counting and if mastered you can expect to easily double or triple your expectation. That is assuming you find “trackable” games of course. Unfortunately, it is becoming harder and harder to find these games.

Some players join teams to allow them to reduce monetary fluctuation and play with a bigger bankroll. Also, non-counters can be used effectively on a team. Theoretically, you can make more money by playing on a team, assuming you trust everyone to accurately report wins and losses.

Dealer errors and mistakes happen occasionally and I would estimate they add a small percentage to my overall win-rate. It may not be much but I will take every edge I can get.

Your greatest expectation can come from exploiting casino promotions and new games and variations. Casinos have offered 2 to 1 on blackjack, early surrender, single deck with an edge, bonuses, jokers in the deck, etc. If you are sharp these games can be a short-time gold-mine.

But most important to how much money you can make in this game is the element of time. If you don’t play they don’t pay! Put in the time and everything else will take care of itself.

Copyright © 1994 – 2020 All Rights Reserved

FAQ 9: Originally published in Volume 6 Issue 2 of Blackjack Review Magazine



1 Shuffle tracking is an advanced form of card counting.   A complete tutorial and expose of shuffle tracking can be found in Arnold Snyder’s 3-issue Shuffle Tracking Series from Blackjack Forum Magazine.  

If blackjack is really “beatable”…?

… then why aren’t you out there making millions of dollars instead of writing about it?

Lots of Money
By Michael Dalton

The fact that a game is beatable does not imply that someone can get rich at it. If you look at blackjack as an investment opportunity you have three factors to consider – Knowledge and skill, Bankroll, and Risk. All of these factors must be considered before you place your first bet. The bottom line is that a highly skilled player with a small bankroll (e.g., $1000) can only hope to make a few dollars per hour playing this game or run the risk of financial ruin.

I enjoy playing this game recreationally and beating the casinos when I do play. But beating the casinos does not mean taking them for everything they’ve got. There are practical limits to how much an individual card counter can win at this game. Each player will have different optimal betting guidelines based on his or her bankroll. Today, accomplished card counters are making anywhere from a few dollars an hour to several hundred dollars an hour playing this game. That is far from winning a million dollars but if you play long enough and can get away with it long enough anything is possible.

Card counting for long hours at a time is not very much fun! If you do it for a living it can become very much a grind. To be perfectly honest, I can make more money, have greater financial security, and enjoy my life better by limiting my blackjack play to weekends and vacations, writing about my exploits, and publishing information about the game I love.

Money in the HandIf I had a large bankroll (i.e., greater than $100,000), I know that I could probably earn a living by playing blackjack, but I would be giving up a lot by doing so. My quality of life would definitely not be better. I wouldn’t have a retirement plan and I would have to pay for my own health insurance. Expenses would be high because I would have to travel a lot to keep the casinos guessing. And eventually, I would get my name in the book — and I would have new problems to consider. Life as a professional card-counter is anything but glamorous.

Recreational card counters, on the other hand, don’t generally have these problems. Indeed, recreational card counters have the best of it because the casinos don’t see them as often. If you are a half decent player, barrings should be infrequent, although you will probably receive some heat at times. Recreational players generally enjoy their time in the casino because it is a break from a regular job or profession.

“There are practical limits to how much an individual card counter can win at this game.”

As I have stated many times before in Blackjack Review Magazine, knowledge about the game and the skill to implement a valid counting system go hand in hand. Both take time to master. But even after you have mastered the game the rewards are dependent on the number of hours you are willing to put in playing, the bankroll at your disposal, the amount of risk you are willing to take, and any unique opportunities that may come your way.

Your bankroll is what determines your theoretical win-rate. It is also your bankroll that determines how much you can safely bet without chancing going bust. Severe losing sessions will occur whether you have an advantage or not! As a player, I am content on winning enough (in the long run) to help pay for my major trip expenses and to add a few more dollars to my bankroll every trip.

Copyright © 1994 – 2020 All Rights Reserved

FAQ 8: Originally published in Volume 6 Issue 1 of Blackjack Review Magazine


Are single-deck games better than multi-deck games?

By Michael Dalton

WARNING: This article assumes blackjacks pay 3 to 2.  Most, if not all, single deck blackjack games currently offered pay only 6 to 5 on a natural.  This makes the game unplayable.   For more information check the Numbers of 21 section.

The Theory of Blackjack by Peter GriffinYes… and no! A multi-deck game has an inherent 0.5% – 0.6% 1) According to Peter Griffin’s Theory of Blackjack, the player’s basic strategy expectations in a standard Las Vegas Strip rule game are as follows: 1 deck = +.02%, 4 deck = -.48% and an infinite number of decks = -.65%.  disadvantage over a single deck game with the same rules. Much of this difference is due to the effect of removal of cards (i.e., removing one card in single deck has a big effect, whereas its removal in a shoe game is negligible). On the other hand, it is much easier to find good rules and conditions in shoe games. The bottom line is that although single- and double-deck games are inherently better than shoe games they are also easier to manipulate in the casino’s behalf.

Almost half of the 0.5% difference mentioned above is due to the reduced favor-ability of doubling down in more than one deck. Additional decks, however, make busts less likely, since you can draw to hands like 2,2,2,2,2,2,2,2,2 (for 18) which are impossible in single and double deck. Busting less often helps the dealer’s hand more than yours, since the dealer is forced by the rigid rules to hit more often than you. Blackjacks are also less frequent, which is bad since you get paid 3 to 2 for those. The 0.5% cost to the basic strategy player is more than all but the very best package of favorable extra rules will give you. 2) This paragraph summarizes part of Michael Hall’s explanation on the subject found in rec.gambling’s FAQ file available at

Many of today’s card-counters have avoided the single-deck game. Although beatable single-deckers may still exist in the world it is hard to find games that will tolerate heavy action (i.e., bets of several hundred dollars and up) for very long. Low stakes players, however, can often find good games in places such as Reno and Las Vegas but players have to be careful and understand what a beatable single deck game is! Single deck penetration is directly related to the number of other players in the game and the rounds being dealt.3) See the Winter 1996 issue of Blackjack Review, page 7 for a chart outlining the minimum requirements for beating the single deck game.  Also, it is much easier for the dealer to cheat in a hand dealt game.

Beatable two deck games can be a lot easier to find. Casinos are usually not as paranoid about the double decker and you will often find yourself in a position to get money on the table without being shuffled up on.

“I will take a good cut and lousy rules any day!”

Of course, the shoe game can be found everywhere and given the right conditions these games can be beat as well. Many of the shoe games are better suited for team play and some can even be beaten with shuffle tracking.

The most important criteria to beating any game are the penetration level and rules, however, I will take a good cut and lousy rules any day! Each of these games must be approached differently and they require unique skills if you want to have any chance of bringing home the money.

Yes, the player probably should have hit that A7

Copyright © 1994 – 2023 All Rights Reserved
FAQ 7: Originally published in Volume 5 Issue 4 of Blackjack Review Magazine



1 According to Peter Griffin’s Theory of Blackjack, the player’s basic strategy expectations in a standard Las Vegas Strip rule game are as follows: 1 deck = +.02%, 4 deck = -.48% and an infinite number of decks = -.65%. 
2 This paragraph summarizes part of Michael Hall’s explanation on the subject found in rec.gambling’s FAQ file available at
3 See the Winter 1996 issue of Blackjack Review, page 7 for a chart outlining the minimum requirements for beating the single deck game. 

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