Penetration in card counting refers to the percentage of the deck or shoe that has been dealt. The deeper the penetration, the more information a card counter has about the remaining cards, allowing for more accurate predictions. With greater penetration, a counter can make better decisions on when to bet more, especially if high cards are still left in the deck. Shallow penetration reduces the effectiveness of card counting, as there's less information available. Casinos often limit penetration to make card counting less profitable.