Has anyone ever invented a system for gambling that has been 100%
successful? If so did the gambler continue to win long term or did the
industry change their rules and / or ban them?

Hello Womblecasserole,

There are two basic methods described that can be effective at casino
games. Both of these methods depend upon playing "live" - an online
casino is usually set up to be immune from these methods. Most other
methods have a variety of problems - the Martingale system
  http://en.wikipedia.org/wiki/Martingale_system
for example runs into problems with the casino's minimum and maximum
bet limits. I assume you don't want a method that requires
modification of casino equipment (e.g., loaded dice in craps). Please
make a clarification request if you need more information on "failing"
systems or modifications of casino equipment.

Depending on the location, when the casino detects someone using the
methods described below, the way the game is played can be changed or
the person will be banned (or arrested for cheating). The rules for
"cheating" or "banning" are different in each country (or even each
state in the US), this is something you should research fully prior to
using any of the systems described below.

The one most commonly described is card counting in Blackjack. There
is a general explanation of the concept at
  http://en.wikipedia.org/wiki/Card_counting
which includes several methods, history (starting in 1962), methods
used by casinos to mitigate the problem, and a number of links to
other sites with further information.

Some of variants include "team based" betting as described in the books:
  "Bringing Down The House" by Ben Mezrich or
  "Million Dollar Blackjack" by Ken Uston
which describe methods where the counters make relatively small bets
and help guide the "big spenders" to the table they are at when the
count is in favor of the bettor.

The second method depends upon the physics of a Roulette wheel. One of
the first "wearable computers" (analog - not digital) was a Roulette
predictor and described in
  "Beat the Dealer" by Ed Thorpe
which was developed in the 1960's. The general approach is to record
when the wheel & ball passes a specific location & predict the
specific number (or range of numbers) that the ball will land.

The main way the casino avoids problems with card counters is to
reshuffle the deck more frequently (even every hand). Use of two
separate decks w/ an automatic shuffler is one way to implement this
while maintaining the speed of the games.

A digital version was developed in the late 70's, early 80's and described in
  "The Eudaemonic Pie" by Thomas A. Bass
This version was successful in tests, but apparently had difficulty
with electronic noise in the casino and worked poorly in real life.

More modern methods of predicting Roulette are described briefly at
  http://en.wikipedia.org/wiki/Roulette
[scroll down to betting strategies and tactics]
which mentions both methods above as well as a more recent camera
based method that was used in the United Kingdom to win over £1.3M (UK
pounds - well over US $2M). Another method described there is watching
one or more wheels, recording the results & using a computer to
correlate the high frequency numbers to bid (used in Spain for over
$1M in winnings). As a side note - there is a humorous story by Nick
the Greek in "Gambling Secrets of Nick the Greek" where Nick won three
times in a row on Red with Einstein watching & the quote from Einstein
at that point was
  "I was wondering if you would be kind enough to wash my mouth out with soap?"

There is also a nice article describing the more recent use of a
roulette computer at
  http://www.guardian.co.uk/gambling/story/0,,1873910,00.html
which indicates the devices are for sale for £1000 (UK Pounds).

An overview of wearable computers in general is also at
  http://en.wikipedia.org/wiki/Wearable_computing
[describes roulette predictors as well as a number of more modern systems]

Other than banning, the only way a casino can stop this kind of system
is to stop betting before starting the ball motion (or to change the
game from Roulette to Craps).

A number of additional resources can be found on line by searches such as
  blackjack card counting
  roulette prediction
  casino make money
[though the last one also refers to methods you may not be able to use]

In general, the gamblers using these systems were detected (though in
some cases only after several millions were won) and banned from the
Casino.

  --Maniac

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Request for Answer Clarification by womblecasserole-ga on 30 Oct 2006 15:25 PST

i heard that two people invented foolproof systems and won loads about
one hundred years ago - the arena was then changed to prevent them
from competing - anyone know what that might be?

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Clarification of Answer by maniac-ga on 30 Oct 2006 17:28 PST

Hello Womblecasserole,

Hmm. Its hard to say for sure without any further information. Let me
provide a pair of examples that may answer your question.

There is some good historical information on gambling and one incident
that comes to mind is
  http://en.wikipedia.org/wiki/The_man_who_broke_the_bank_at_Monte_Carlo
Charles Wells who "broke the bank" at Monte Carlo in the late 1800's.
Note the article I refer to indicates he used the Martingale system -
which I already referred to in the original answer. The casino's
solution for the Martingale system was to introduce both minimum and
maximum betting limits. You can find further information related to
this incident with a search with a phrase like
  break the bank monte carlo wells
  gambling history

As another example, I already mentioned Nick the Greek. He was born in
1883 and from the book had won / lost over $500,000,000 in 60 years of
active gambling. When 18 he got his first large stake by investing his
inheritance of $50,000 through betting on horses (over four months)
and ended up with $1,200,000 (but couldn't recall how he accomplished
it - he was drunk most the time). His largest winning was about $50M.
He certainly did not have a 100% successful method - he was
essentially broke over 70 times in those 60 years. The book I refer to
is apparently out of print - it is available from several used
bookstores - and I heartily recommend it as a good read.

  --Maniac

Wanted more of a technical/historical answer rather than a 'how to'
guide but helpful

Another good way to win is to be the casino.

I have been very successful in Black Jack using card counting.  It is
fully legal in the US, but the casinos do look down on it if you are
making much money.

The first thing to learn is what to do in any situation (your 2 cards
vs the dealers 1 showing card).  It is easy to find a chart that shows
what you should do given any cards showing (and after play a while you
can learn remember to do in any situation).
Using the chart, you will lose about $.50 per $100 bet in the long run.

To turn that $.50 loss into a slight gain, you must also count cards. 
The theory of basic card counting is that 10s are bad for the dealer
since the dealer is forced to hit on a 12-16 (where a 10 would make
him bust).  So you want to track how many 10s are left in the deck vs
low cards (3s-6s).
To do this, simply keep 1 count... +1 for every 3,4,5,6 and -1 for
every 10,J,Q,K.
Most casinos today (in the US) use 8 decks in Black Jack, and
reshuffle about 3/4ths of the way through the cards.  Getting towards
the time when the reshuffle happens, sometimes the deck is VERY
lopsided (there are many more 10s than low cards or many more low
cards than 10s)... this is when you change your bet.  If there are
many more 10s left then greatly increase your bet.  (do it very
casually and never say anything about it... to help avoid suspicion) 
You are now betting alot more when the dealer is more likely to bust
(and you are slightly more likely to get blackjack that pays 1.5 to
1).  If there are many more low cards left then lower your bet to the
table minimum and ride out the rest of the deck losing as little as
possible.

This strategy brings you into a slightly positive long term result. 
Of course you will see big ups and downs in the short run, so never
bet more than a very small portion of what you're able/willing to lose
or you could run out of money before the long run positive result
takes effect.

I seem to recall that in the 1800's (?) before the science of
statistics was well developed, casinos and other purveyors of games of
chance would sometimes set their payout tables incorrectly, which
would allow a canny gambler to "beat the house."  Sorry that I don't
have any good reference for this; I don't recall ever hearing that
anyone exploited it in any systematic way.  If you do some searches on
the history of statistics, you might come up with something.  (The
science of statistics was largely developed for analyzing games of
chance.)