Many people have argued that poker should be considered differently from gambling in general. This argument has been made in discussions of legalization and related topics. Their argument is usually that poker is a skill game, while other gambling games are much less dependent upon skill.

We agree, but believe that they have not gone far enough in explaining many of poker’s unique attributes. Poker does not just require skill. It demands and develops many skills and personal qualities which are essential for making all types of decisions, such as choosing a career, investing money, performing a job, and buying a house.1
POKER IS A GREAT TEACHER.

Research clearly proves that people tend to repeat rewarded actions and to discontinue punished ones. Poker teaches by rewarding desirable actions such as thinking logically and understanding other people and by punishing undesirable ones such as ignoring the odds and acting impulsively.2 Other learning principles also apply to poker.
Learning Depends Upon Feedback.

Rewards and punishments are valuable feedback. The faster and clearer the feedback is, the more rapidly you will learn. Unfortunately, for learning many desirable qualities the feedback cycle is slow or unclear. For example, if you make a mistake with an important customer, you may never know why you lost his business. At the poker table you often get much quicker feedback.

Until fairly recently, most people learned how to play poker primarily from trial and error. Over the past few decades a rapidly expanding body of books, videotapes, DVDs, classes, and coaches has helped millions of players to speed up the learning curve, but there is no substitute for experience. You have to make good and bad plays and get rewarded and punished to learn poker’s most important lessons.
The More Frequently You Get Feedback, The Faster You Will Learn.

Most important real life decisions are made infrequently, and some of them – such as choosing a career – may be made only once. Poker players make and get feedback on hundreds of decisions every session, which greatly accelerates the learning process.
Lessons Learned In One Situation Often Generalize To Other Situations.

If poker’s lessons applied only to how to play games, we would not have written this article. But its lessons apply to virtually every aspect of life. For example, if you are impatient or illogical or can’t analyze risks and rewards, you will lose at poker, and you will make many mistakes in business and personal relationships. If poker teaches you how to control your emotions, you will be much more effective almost everywhere.
Young People Generally Learn More Quickly Than Older Ones.

Poker’s enemies often insist that they are protecting young people from developing bad habits, but they are really preventing them from learning good ones. Young people love to gamble, sometimes for money, often for much more “things” such as grades, pregnancy, and even their lives.

They get a kick from taking chances, and some of their gambles are just, plain stupid. They risk dying or becoming crippled by crazy stunts on roller skates, bicycles, and snowboards. They get pregnant or AIDS by taking easily avoided sexual risks. It is as impossible to prevent young people from “gambling” (in its broadest sense) as it is to prevent them from experimenting sexually.

Life is intrinsically risky, and learning how to handle those risks is an important part of growing up. Poker teaches you to think of risks and rewards before acting. If it taught nothing else, poker would prevent some young people from making terrible mistakes. More generally, most of poker’s lessons will help young people to make critically important decisions.
POKER IMPROVES YOUR STUDY HABITS.

Because you want to be respected, you and nearly everyone else naturally develop high status qualities and neglect low status ones. Unfortunately, status among Americans – especially young ones – is based primarily on physical attractiveness and athletic ability. The highest status people, the ones others envy and want to date, are physically attractive and good at games such as football, basketball, and soccer. Of course, the good looking, athletic children will probably end up working for the more studious ones, but they may not learn that lesson until it is too late.

American students score abysmally on tests of math, science, and verbal skills partly because so many of them think that study is unimportant. They are not stupider than Europeans, Asians, and South Americans, but they are taught from birth that they will be rewarded for looking good and playing athletic games well.

Worse yet, they learn that being studious is often punished. Their parents may be delighted when they get good grades, but young people care immensely about their peers’ opinions. Good students are called “nerds” and “geeks.”

This anti-intellectualism continues indefinitely. Americans reward good looks and athletic ability far more than studiousness. Models, actors, and athletes get paid several times as much and have much higher status than scientists, teachers, and scholars.

Young people resist studying math, psychology, logic, risk-reward analysis, probability theory, and many other subjects they will need as adults because these subjects seem unrelated to their lives. They don’t see how learning them matters in the competitions they care about, the ones for status, popularity, and dates. Since people rarely study these subjects after graduation, many Americans never learn them.

Poker quickly teaches them the value of these subjects. The “nerds” who study poker and subjects such as math, logic, and psychology crush their more attractive and athletic opponents. They even beat smarter people who are too lazy or complacent to study. Winning increases their status and confidence and makes them much more likely to get dates and influence their peers. Poker doesn’t just develop study habits and other important qualities; it also increases the value people place on them.
POKER DEVELOPS YOUR MATH SKILLS.

Americans are terrible at math. Our students get abysmal scores on math tests, and most people don’t even try to learn math after leaving school. Their weaknesses remain uncorrected forever.

Many people are not just bad at math; they don’t even want to get better. They essentially say, “Who needs it?” When they play poker, they quickly learn that they need it. The winners understand and apply it, while the losers either don’t try or can’t perform the necessary calculations. After their children started playing poker, many parents have exclaimed, “I’m amazed. He actually wants to study math.”
POKER DEVELOPS YOUR LOGICAL THINKING.

Many authorities are appalled by Americans’ contempt for logic. Instead of thinking logically, too many of us make poor assumptions, rely on intuition, or jump to emotionally-based conclusions.

Poker teaches you to respect and apply logic because it is a series of puzzles. Since you don’t know the other players’ cards, you need logic to help you to figure out what they have, and then more logic to decide how to use that information well. The same general approach that works in poker will help you to make much more important decisions.
POKER DEVELOPS YOUR CONCENTRATION.

The first step toward solving poker or real life problems is acquiring the right information. Without it you will certainly make costly mistakes. Poker develops information-gathering qualities, especially concentration. Every poker player has missed signals, including quite obvious ones, made mistakes, and then berated himself, “How could I be so stupid?” We can’t think of a more effective way to develop concentration.
POKER DEVELOPS YOUR PATIENCE.

Americans are notoriously impatient, which damages many aspects of our lives. We owe trillions of dollars because we buy things on credit instead of waiting until we can pay for them. Our businesses overemphasize short-term results and lose market share to more patient foreign competitors.

Poker develops patience in the most powerful possible way. If you wait patiently for the right situation, you will certainly beat the impatient people who play too many hands. In fact, for most players poker’s first lesson is “Be Patient.”
POKER DEVELOPS YOUR DISCIPLINE.

Many people lack discipline. They yield to their impulses, including quite destructive ones. Poker develops discipline by rewarding it highly. Virtually all winning players are extremely disciplined.

Their discipline affects everything they do. They fold hands they are tempted to play. They resist the urge to challenge tough players. They avoid distractions, even pleasant ones like chatting with friends or sexually attractive strangers. They don’t criticize bad players whose mistakes cost them money. They control their emotions. They have the self-control to do the necessary, but unpleasant things that most people won’t do.

Television has created a ridiculously inaccurate image of poker. After seeing famous players screaming and trash-talking, viewers naturally assume that such antics are normal. They are utterly mistaken. Television directors show these outbursts for “dramatic value,” and a few players act stupidly to get on TV. You will see more outbursts in a half hour of television than in a month in a card room. Please remember that controlled people are often called “poker faced.”
POKER TEACHES YOU TO FOCUS ON THE LONG TERM.

Impatience is not the only cause for short-sightedness. Learning research proves that immediate rewards have much greater impact on people than delayed ones. For example, most American adults are overweight because the immediate pleasure of overeating is more powerful than its disastrous long-term effects such as heart attacks.

Poker players quickly learn that a bad play can have good results and vice versa, but that making decisions with positive, long-term expectation (EV) is the key to success. If you make enough negative EV plays, you must lose. If you make enough positive EV plays, you must win. It is just that simple.

If people thought more of the long term, some of our most serious problems would be solved or become less troublesome. Because of short-sightedness, millions of children drop out of school or get pregnant, and millions of adults neglect their health and finances.
POKER TEACHES YOU THAT FORGOING A PROFIT EQUALS TAKING A LOSS (AND VICE VERSA).

Economists call lost profits “opportunity costs” and they have written extensively about them. Unfortunately, most people haven’t read their works, and, if they did, they probably wouldn’t agree. They would much rather pass up a chance to make a dollar than risk losing one. They therefore miss many profitable opportunities.

Poker teaches you that lost profits are objectively the same as losses. For example, if the pot offers you 8-to1, and the odds against you are 5-to-1, you should call the bet. Not calling is the same as throwing away money by making a bad call when the odds are against you.
POKER DEVELOPS YOUR REALISM.

You and everyone else deny unpleasant realities about yourself, other people, and many other subjects. You believe what you want to believe. Poker develops realism in the cruelest, but most effective way. If you deny reality about yourself, the opposition, the cards, the odds, or almost anything else, you quickly pay for it.

Hundreds of times a night you must assess a complicated situation: your own and the other players’ cards, what the others are going to do, the probability that various cards will come on later rounds, your position, and many other factors, especially your own and the other players’ skill and playing style. If you are realistic, you win. If you deny reality, you lose.
POKER TEACHES YOU HOW ADJUST TO CHANGING SITUATIONS.

Most people don’t ask themselves, “How is this situation different?” They just do whatever they have always done. Poker demands adjustments because the situation is always changing. One card can convert a worthless hand such as a four flush into an unbeatable one. The player holding the flush and all the opponents should adjust immediately. The player with the winning hand should do whatever will produce the most profit, and the others should cut their losses.

Other things are changing as well. One hand after being in the small blind, the worst position, you have the button, the best position. Every time someone quits and is replaced by a different type of player, the game changes. Every time someone surprises you by folding, checking, betting, or raising you should re-evaluate the situation and adjust to the new information.

Adjusting to real life changes has always been necessary, but it is has become much more important because the pace of change has accelerated enormously. We now experience more changes every year than our ancestors encountered in decades. Technology, the economy, social and moral attitudes, and a host of other factors change so dramatically that Alvin Toffler: “coined the term ‘future shock’ to describe the shattering disorientation we induce in individuals by subjecting them to too much change in too short a time.”3 He argued, “Change is avalanching upon our heads, and most people are grotesquely unprepared to cope with it.”4 Poker can help you to cope with our constantly changing world.
POKER TEACHES YOU TO ADJUST TO DIVERSE PEOPLE.

Most people – especially younger ones – have little experience with diverse people. They live in relatively homogenous towns and neighborhoods and usually relate to people who are fairly similar to themselves.

In online and casino poker games, you have to play with whoever sits down. You must compete against very different kinds of people: aggressive and passive, friendly and nasty, educated and uneducated, quiet and talkative, intelligent and stupid, emotionally controlled and uncontrolled, and so on.

You therefore learn how to understand and adjust to people who think and act very differently from you. The faster you and better you do it, the better results you will get. Since you will certainly meet diverse people in more important situations, learning how to relate to them is extremely valuable.5
POKER TEACHES YOU TO AVOID RACIAL, SEXUAL AND OTHER PREJUDICES.

Prejudice is always wrong, but it is especially destructive at the poker table. It causes you to underestimate your opposition and make expensive errors. To play well, you should be “gender-blind, color-blind, and just-about-everything else-blind, because in the end, winning is based on merit.”6

Poker provides an extremely “level playing field.” In no other popular competition is everyone treated so equally. You can’t play golf against Tiger Woods, but you can sit down at any poker table. You can play against anyone from a novice to a world class player, and you will all be treated as equals. If you get the cards and play them well, you will win, no matter who you are.
POKER TEACHES YOU HOW TO HANDLE LOSSES.

Many people can’t cope with losses. A lost job, argument, or – God forbid -romantic relationship is a massive tragedy. They can’t accept the loss and may even obsess over it. It takes over their lives, making them look backward rather than forward.

Poker teaches you how to cope with losses because they occur so frequently. You lose far more hands than you win, and losing sessions and losing streaks are just normal parts of the game. You also learn that trying to get even quickly is a prescription for disaster. You have to accept short-term losses and continue to play a solid, patient game. You can’t be a winner – in poker or life – if you don’t learn how to get over losses and move on.
POKER TEACHES YOU TO DEPERSONALIZE CONFLICT.

Many people take conflicts too personally. They may want to beat someone so badly that they “win the battle, but lose the war.” Worse yet, if they lose, they may take it as a personal defeat and ache for revenge. Anyone who has seriously played games with painful physical contact (such as football, boxing, and soccer) is less likely to take conflict too personally. Getting hurt teaches some athletes that conflict is just part of the game and life. Alas, many people never learn that lesson.

Poker teaches you to depersonalize conflicts because it is based on impersonal conflict. The objective is to win each other’s money, and everyone’s money is the same. It doesn’t matter whether you win or lose to Harry, Susan, or Bob. Everybody’s chips have the same value, and everybody’s money spends the same.

Poker quickly teaches you that being bluffed, sandbagged, outdrawn, and just plain outplayed are not personal challenges or insults. They are just parts of the game. Poker also teaches you that taking conflicts personally can be extremely expensive.

If you ache for revenge, you may act foolishly and lose a lot of money. Beating “your enemy” can become so important that you play cards you should fold, try hopeless bluffs, and take many other stupid, self-destructive actions. The Chinese have a wonderful saying, “If you set out for revenge, dig two graves: one for him, and one for you.” Poker teaches that principle to every open-minded player.
POKER TEACHES YOU HOW TO PLAN.

Many people don’t plan well. Instead of setting objectives and planning the steps to reach them, they react impulsively or habitually. Poker develops your planning ability for an extremely wide range of time periods:

    * This betting round
    * This entire hand
    * This session
    * This tournament
    * This year
    * Your entire poker career

Planning for all of these periods requires setting objectives and anticipating what others will do. For example, pocket aces are the best possible hand, and you hope to build a big pot with them. In early position in a loose-passive game, you should raise because your opponents will probably call. In a wildly aggressive game you should just call, expecting someone to raise, others to call, so that you can reraise.

Poker also teaches you to plan for the entire hand. You use chess-type thinking (“I’ll do this, they will do that, and then I’ll …”). You may sacrifice some profit on an early betting round to increase your profits for the entire hand.

You can also sacrifice immediate profits for longer-term gains. For example, you may overplay the first few hands to create a “Wild Gambler” image that will get you more action on later hands. Or you may be extremely tight at first to set up later bluffs. Poker teaches you to set clear goals, think of what others will do, plan the actions that will move you toward your goals, and always know why you are doing something.

Good planning requires thinking of multiple contingencies. You should do many “what, if?” analyses. If the next card is a spade, you will bet. If it pairs the board, and Joe bets, you will fold. If it seems innocuous and Harriet bets, you will raise. Most people don’t consider nearly enough possibilities. When something unexpected happens, they have no idea what to do.

Planning in real life is so obviously valuable and so rarely done well that we don’t need to give any examples. You know that you should do these “what if” analyses and plan your work, finances, and life in general, but that you probably don’t plan well.
POKER TEACHES YOU HOW TO HANDLE DECEPTIVE PEOPLE.

Many people are easily deceived. Just look at those late night infomercials that promise you’ll quickly get rich, become thin, or relieve all your aches and pains. The promoters wouldn’t pay for them if naïve people didn’t buy them, and they are only the tip of the iceberg. As Barnum put it, “There’s a sucker born every minute.”

Because poker players constantly try to bluff, sandbag, and generally deceive each other, you learn how to recognize when someone has a good hand, is on a draw to a good hand, or is flat out bluffing Those skills can help you to spot and react effectively to deceptive people everywhere. A lot of people want to deceive you, and you should learn how to protect yourself.
POKER TEACHES YOU HOW TO CHOOSE THE BEST “GAMES.”

“Game” selection is critically important in both poker and life. Poker teaches you how to evaluate yourself, the competition, and the overall situation, and then pick the “games” that are best for you.

Serious poker players recognize that the main reason they win or lose is the difference between their abilities and those of the competition. If they are better than the competition, they win. If they are weaker, they lose.

A secondary consideration is the fit between their style and the game. Let’s say that two poker players have equal abilities. Player A will beat a conservative game, but lose in an aggressive one, while Player B will have the opposite results. Obviously, they should choose different games.

Both factors affect your real life results. If you are less talented or have weaker credentials than your competitors, you should switch to a softer game. You should also select a game that fits your style. For example, you and a friend may have similar abilities and credentials, but different temperaments. Perhaps you should work in a large organization, but he should join a small company or start his own business.

Most people don’t know how to evaluate themselves and how well they fit into various “games.” So they make huge mistakes that they may not realize for many years. Just think of how many people have changed “games” in their thirties and forties. They finally realized, “I don’t belong here.”
POKER TEACHES YOU THE BENEFITS OF ACTING LAST.

If you act last, you have a huge edge. You know what your opponents have done before acting, but they acted without knowing what you will do. Position is so important that any good player would raise with some cards in last position that he would fold in early position.

Poker is an information-management game, and there are many similar games such as selling and negotiating. The primary rules of all these games are:

    * Get as much information as possible.
    * Give as little information as possible.

For example, when negotiating, you want the other person to go first to learn his position before expressing yours. Let’s say you have to sell an unusual house quickly. A licensed appraiser has said that it is worth approximately $250,000, but that it is so unique that he can’t put a precise value on it.

Before offering a price, you want to know how this potential buyer feels. He may love, hate, or be indifferent to its unique features. If he makes the first offer, you get some inkling of his feelings. He may even offer $275,000! Since he seems to love its uniqueness, try for an even higher price.

Job interviewers know the value of acting last. Most employment applications contain a question such as: “Approximate starting salary expected.” If you answer, you have given the interviewer your position without knowing what he is willing to pay. Since you are unlikely to get more than you ask for, try to avoid making that first offer.
POKER TEACHES YOU TO FOCUS ON THE IMPORTANT SUBJECTS.

Focusing on unimportant subjects causes expensive mistakes at the poker table and in real life. Serious poker players know that all mistakes are not created equal. Trying too hard to avoid small mistakes can cause much bigger ones.

Overreacting to any opponent’s small mistakes can cause the deadly mistake of underestimating him. For example, you may see that an opponent overplays a mediocre hand such as queen-jack offsuit. It’s a mistake, but a relatively harmless one, especially because he will get that hand only a few times a night. If he plays the other hands well, don’t conclude that he is a weak player.

Your own mistakes should also be analyzed, and some of them can be quite subtle, but very important. For example, you may be so intent on playing “properly” that you seem too serious for the weaker opponents who just want to have a good time. So they avoid you, which reduces your share of the money they give away.

Another error is taking a “by the book” approach that can cause strategic mistakes. For example, you could play your cards in a technically correct way, but almost never bluff. You would lose the profit you could gain from good bluffs, and your opponents will not give you much action on your good hands. The same principle applies to always playing hands the same way. The predictability costs you more than you gain by always being technically correct.

A business analogy would be running your organization so rigidly that all the ordinary decisions are made well, but:

    * Your employees are not motivated to be creative when the usual routines won’t work. In fact, they may fear being punished for violating procedures.
    * Your organization can’t respond effectively to the inevitable surprises.
    * Your good employees quit.
    * Your organization becomes a typical bureaucracy, filled with deadwood and unable to achieve its goals.

POKER TEACHES YOU HOW TO APPLY PROBABILITY THEORY.

If you are like most people, you don’t think in terms of probabilities, or you do so very crudely. You think something:

    * will happen
    * won’t happen
    * probably will happen
    * probably won’t happen

You are unlikely to make finer distinctions such as between 30%, 20%, and 10% probabilities.

Poker teaches that these distinctions are important and develops your ability to calculate them. You learn that you should sometimes call a bet if you have a 30% probability of winning, but fold with a 20% probability. You also learn how to estimate probabilities quickly and accurately.

This neglected skill can be applied to many real life decisions. For example, if you have to fly to Los Angeles for a sales call or job interview, it may be worth the time and expense if the probability of success is 30%, but not if it’s 20%. Hardly anyone thinks that way which causes many poor decisions.
POKER TEACHES YOU HOW TO CONDUCT RISK-REWARD ANALYSES.

These analyses are a more formal way to use probability theory. Since life is intrinsically risky, you probably can’t win at poker or life without accurately assessing risks and rewards.

Risk-reward analysis is a form of cost-benefit analysis which also includes the probabilities of each possible result. Let’s say that the pot is $100. You have a flush draw that you expect to win if you make it, but lose if you miss. It will cost you $20 to call the bet. The odds against making your flush are exactly 4-to-1. If you make it, you will win another $20 because you are sure your opponent will call one last bet. You are sure you cannot bluff. Should you call the $20 bet?

You will certainly lose more often than you will win, but the potential gains may outweigh the potential losses. Because we are concerned only with the long term, let’s do it 100 times:
You will win $120 twenty times for a total win of    $2,400
You will lose $20 eighty times for a total loss of    -1,600
Your net gain for 100 times will be    $800
Your expected value for each call is    $8
You should obviously call the bet.

Poker players constantly do risk-reward analyses, and these analyses are often much more complicated. For example, in deciding whether to semi-bluff7, you should estimate the probabilities, gains and losses of:

    * winning the pot immediately because your opponent(s) fold
    * winning because you bet again on the next round and your opponent(s) fold
    * winning because you catch the card you need to make the best hand
    * losing because you get called and don’t catch your card.

The math can get difficult, but advanced players learn how to make these analyses quickly and accurately.

The same sort of analysis should be done whenever you have a real life risky situation. Unfortunately, most people don’t do it. They buy stocks or real estate, take a job, open a business, or take personal risks without identifying all the outcomes and estimating the probabilities that each will occur. So they make many bad decisions.

Poker is such an excellent teacher for risky decisions that Peter Lynch, former manager of The Magellan Fund and Vice Chairman of Fidelity, once said that a good way to become a better investor was to “Learn how to play poker.”8
POKER TEACHES YOU TO PUT THINGS IN CONTEXT AND EVALUATE ALL VARIABLES.

People often ask poker experts, “How should I play this hand?” They are usually frustrated by the standard answer, “It depends on the situation.” The expert then asks them about the other players, their own position, the size of the pot, the action on previous hands and betting rounds, and many other subjects. Most people don’t want to hear, “It depends on the situation,” and they definitely don’t want to answer questions.

In fact, they usually can’t answer them because they have not counted the pot, thought about the other players, and done all the other things that experts do. They want to know the two or three simple rules for playing a pair of aces, or a full house, or a flush draw, and the experts won’t tell them because there aren’t any simple rules.

If you play seriously, you will learn that the KISS formula (Keep It Short and Simple) does not apply to poker. More importantly, it does not apply to most significant real life decisions. It has become popular because people want to believe that life is much simpler than it really is. Poker teaches you to ask the same sorts of questions about investment, career, and other decisions that you ask at the poker table so that you make much better decisions.
POKER TEACHES YOU HOW TO “GET INTO PEOPLE’S HEADS.”

Poker teaches you to understand and apply psychology because understanding others is absolutely essential. In fact, poker has often been called “a people game played with cards.” If you don’t understand the other players, you can’t win.

We have already discussed psychological subjects such as avoiding prejudice and selecting the right games. We will end this long essay by briefly discussing poker’s most important psychological lesson: teaching you what other people perceive, think, and want.

The first step is shifting your focus from yourself to them, and poker forces you to make that shift. If you focus on your own cards, you can’t win because poker hands have only relative value. The important issue is not how good your cards are; it is how they compare to the other players’ cards. A flush is a very good hand, but it loses to a bigger flush or any full house or better. So poker quickly teaches you to think of what other people have. It also teaches you to think about what they think you have. And even what they think you think they think.9

We and others have written extensively about these subjects, but space limitations allow us to give only a few examples. Good players always consider the other player when making any decision. With the same cards and situation, they would fold if Charley, a very conservative player, bets, but raise if Mary, a very aggressive player, bets.

Good players would also think about how their opponents think about each other. For example, if a perceptive opponent bets into someone whom he believes is very likely to call, he is probably not bluffing. If a good player reraises a maniac, he probably has a much weaker hand than if he reraised a tight opponent. Understanding his perceptions of these other players greatly improves your decisions when you are contesting a pot.

Understanding other people is vital in virtually every area of life. You can’t have good personal relationships or succeed in business without being perceptive about people. Since its value in personal relationships is so obvious, we will discuss only two subjects, negotiating and investing.

“The absolutely essential step toward negotiating effectively is to shift your focus from your own position to their position. Unfortunately, most people focus on their own position. Their actions say, in effect, ‘If I could just get them to understand MY facts and MY logic and MY needs, they would make the concessions I need.’ The other side is saying exactly the same thing.

“They therefore have parallel monologues instead of a genuine dialogue. Both sides repeat themselves again and again, hoping to convince the other to accept their position. But eloquence is no substitute for understanding, and you cannot gain that understanding without shifting your focus and sincerely wanting to understand the other side.”10

All good poker players know and apply David Sklansky’s “Fundamental Theorem of Poker.”11 Less well known is his “Fundamental Theorem of Investing:”

“Before making any investment … you must be able to explain why the other party is willing to take the other side of the deal… if you cannot come up with a good explanation, your buy, sell or bet is almost certainly not as good as you think.”12

Unfortunately, most people don’t seriously analyze the other party’s reasons. Their attention is focused primarily on themselves, their economics, their analysis, and their reasons for buying or selling. If they thought about the other party’s motives and perceptions, they might realize that they are making a disastrous mistake.

The principle is very clear. You should always determine as accurately as you can why the other party is willing to sell, buy, or do other business with you. If you don’t understand his reasons, “all the statistics, income statements, balance sheet data, or analysts’ recommendations mean little. There is still some reason they are taking your bet – and, if you don’t know it, you don’t like it.”13

We could quote many other authorities on the value of understanding other people, but there is no need to do so. Instead, we will close with a quotation from one of the best selling books of all time: How To Win Friends And Influence People by Dale Carnegie: “If there is one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as your own.”14

Since you can’t win at poker without seeing things from other people’s angle, you will learn this valuable lesson. You will then become much better at winning friends, influencing people, and making decisions about virtually everything.
CONCLUSIONS

We have described many – but certainly not all – of the skills and personal qualities that poker develops. Most of poker’s lessons are variations on one theme: Think carefully before you act. That principle applies everywhere, and far too many people ignore it.

The government’s attempts to outlaw poker are based upon a misconception of its nature and value. It is not “just gambling,” and it should not be subject to the same rules and penalties as other gambling games. Instead, the government should allow you to play poker in regulated and taxed places because poker is good for you and good for America.
SUMMARY OF POKER’S BENEFITS

Because this essay is so long, you may not want to reprint all of it. We believe that a good summary is simply a list of the headings. Please feel free to reprint as much or as little as you wish.

   1. Poker Is A Great Teacher.
   2. Poker Improves Your Study Habits.
   3. Poker Develops Your Math Skills.
   4. Poker Develops Your Logical Thinking.
   5. Poker Develops Your Concentration.
   6. Poker Develops Your Patience.
   7. Poker Develops Your Discipline.
   8. Poker Teaches You To Focus On The Long Term.
   9. Poker Teaches You That Forgoing A Profit Equals Taking A Loss (And Vice Versa).
  10. Poker Develops Your Realism.
  11. Poker Teaches You To Adjust To Changing Situations.
  12. Poker Teaches You To Adjust To Diverse People.
  13. Poker Teaches You To Avoid Racial, Sexual And Other Prejudices.
  14. Poker Teaches You How To Handle Losses.
  15. Poker Teaches You To Depersonalize Conflict.
  16. Poker Teaches You How To Plan.
  17. Poker Teaches You How To Handle Deceptive People.
  18. Poker Teaches You How To Choose The Best “Game.”
  19. Poker Teaches You The Benefits Of Acting Last.
  20. Poker Teaches You To Focus On The Important Subjects.
  21. Poker Teaches You How To Apply Probability Theory.
  22. Poker Teaches You How To Conduct Risk-Reward Analyses.
  23. Poker Teaches You To Put Things In Context And Evaluate All Variables.
  24. Poker Teaches You How To “Get Into People’s Heads.”

1 We assume, of course, that you will not become obsessed with poker or play for higher stakes than you can afford.

2 These rewards and punishments may not be instantaneous. It may take a while for things to average out.

3 Future Shock, New York, Random House, 1970, Page 4

4ibid, page 14

5 Adjusting to varied players was the primary theme of Alan Schoonmaker’s book, The Psychology of Poker, Henderson, NV, Two Plus Two Publishing, 2000.

6 Barbara Connors, “Poker Play” in Maryann Morrison’s Women’s Poker Night, New York, Kensington Publishing, 2007, p. 26.

7 “A semi-bluff is a bet with a hand which, if called, does not figure to be the best hand at the moment, but has a reasonable chance of outdrawing those hands that initially called it.” David Sklansky, The Theory of Poker, p. 91.

8 “Ten lessons poker teaches great investors,” by Christopher Graja, Bloomberg’s Personal Finance, June, 2001, p. 56

9 See “Multiple level thinking” in David Sklansky and Ed Miller, No Limit Hold ‘em: Theory And Practice, Henderson, NV, Two Plus Two Publishing, 2006, pp. 168-175.

10 Alan N. Schoonmaker, Negotiate to win. Englewood Cliffs, NJ, Prentice-Hall, 1989, p. 76

11 “The Fundamental Theorem of Poker” is explained on pages 17-26 of The Theory of Poker.

12 David Sklansky, “The Fundamental Theorem of Investing,” Card Player, August 16, 2002, pp. 34-36

13 ibid.

14 Dale Carnegie How To Win Friends and Influence People, NY, Simon and Schuster, 1936, copyright renewed 1964, P. 37. The italics were in the book.

The owner of Big Bear Lodge in Brookline wants to expand
gambling operations and needs the planning board’s approval to do it.

New
Hampshire Charitable Gambling LLC is poised to enter a lease agreement
with the lodge, owned by Paul Andres, to use space there to run Hold
‘Em poker games, according to a site plan application.

The
planning board will hold a public hearing at 7:15 p.m. Wednesday on the
hours of operation of the lodge, which need to be adjusted to allow for
the games.

The lodge already received permission to hold bingo
and has hosted games since 1999, according to a report prepared for the
planning board by town planner Valerie Maurer.

According to state law, the games could take place from 11 a.m.-1 a.m. Monday through Saturday and noon-1 a.m. Sunday.

The lodge’s hours now are 11:30 a.m.-11 p.m. Monday through Saturday and 9 a.m.-11 p.m. Sundays.

New
Hampshire Charitable Gambling President Jim Rafferty said the Big Bear
Lodge proposal is different than recent proposals his company has made
in Nashua. Andres approached him, he said, about running poker games in
Brookline.

New Hampshire Charitable Gambling is a new company
Rafferty runs and is backed by eight investors. When he’s able to nail
down a space to begin hosting games, he’ll hire a poker manager and
dealers, he said.

“We have a plan that would put 15 tables in operation relatively quickly,” if the plan is approved, Rafferty said.

He
declined to estimate how much local charities might be given from the
games, but said the Brookline Fire Department is one nonprofit that
could benefit.

Andres and Big Bear Lodge Manager Deb Lefebvre
have been in charge of lining up other charities, he said. Neither was
available for comment.

Charitable gaming is regulated by the
state’s parimutuel commission and has been legal for a decade. Recent
changes to state law allow a professional company, like New Hampshire
Charitable Gambling, to run the games.

State law requires
charitable fundraising firms to put up a $20,000 performance bond to
ensure that funds are available to reimburse charities if an
organization is not able to meet its obligations.

Recently, the
state suspended the gambling license of New England Fund Raising Co.
Inc. after claims it had stolen up to $90,000 intended for nonprofit
groups across the state.

Private companies can keep 65 percent of the money made at the games with the remainder given to charities.

This
summer New Hampshire Charitable Gambling attempted to start poker games
in downtown Nashua at the former ArcLight store on West Pearl Street
and at St. Stanislaus Hall. That plan was quashed by a 2-2 vote by the
Nashua Zoning Board of Adjustment that denied the variance the company
needed.

As recently as July the company was looking at buying Avery Furniture on Avery Street for gaming operations, Rafferty said.

The Telegraph (09/04/07)

A year after he pushed a bill to eliminate wagering limits at card
rooms, state Sen. Dean Florez is seeking to loosen gambling laws some
more — this time with legislation that would make it easier to add
tables at small card rooms.
Florez, D-Shafter, says the change is needed to accommodate the growing popularity of Texas Hold’em.

The
card game is often featured on televised poker tournaments, spurring
many gamblers to try their hand at their local card room. It’s so
popular that many customers “have to wait several hours to play or
leave to go home and perhaps play poker on the Internet, which is
prohibited by federal law,” Florez said in the bill analysis.

Senate
Bill 152 has drawn less attention than last year’s wagering limit
measure, which anti-gambling groups strongly opposed. But activists are
still worried that the bill would further erode a 12-year-old
moratorium on card-room expansion.

The more gaming tables, the
worse it is for gambling addicts, said Fred Jones, a lawyer for the
California Coalition Against Gambling Expansion, an organization
representing mostly churches.

“You can’t give them the
temptation because almost by definition they cannot handle it,” he
said. “This continuous slide into more and more gambling is just going
to exacerbate that problem.”

Thanks to the Texas Hold’em craze,
card-room business is booming, even with competition from tribal
casinos, which operate under fewer restrictions.

Statewide,
card-room revenue grew each of the past four years, rising to $794
million last year, according to the state attorney general’s Division
of Gambling Control.

Still, smaller card rooms are having a
hard time because they can’t add tables, said Kermit Schayltz,
president of the Golden State Gaming Association, which represents card
rooms.

“You can’t expand your business,” said Schayltz, owner of
a small card room in a Sacramento suburb. Yet “costs go up year after
year after year. Give us a break.”

SB 152 applies to card rooms
that are prohibited by local ordinances from having more than 12
tables. About 60 of the state’s 91 card rooms could be affected. In the
central San Joaquin Valley, seven small card rooms would be covered by
the bill — in Tulare County, Madera, Porterville, Merced and Lemoore,
according to the Division of Gambling Control.

The bill would
allow cities and counties with card rooms to raise the limit on tables
by 45% at each room — allowing up to five more tables — without voter
approval. Today, local governments don’t need a vote to expand gaming
by 25% above the limit in place on Jan. 1, 1996.

SB 152 has passed the Senate and is expected to soon be taken up by the Assembly.

Fresno’s
Club One Casino would not be affected because it is allowed by the city
to operate 49 gaming tables. The six-table 500 Club in Clovis would not
be affected either because it can have up to 15 tables, according to
the division.

A state law enacted in 1995 prohibits new card
rooms and limits expansion at existing rooms. The moratorium has been
extended several times and is now set to expire in 2015. But over the
years, lawmakers have eased some of the restrictions.

Last year,
for instance, Gov. Schwarzenegger signed a Florez bill that allows
local governments to do away with wagering limits, freeing gamblers to
bet as much as they want on Texas Hold’em, Pai Gao and other games.
Fresno’s City Council quickly took advantage of the law, removing the
$200-per-bet Texas Hold’em limit at Club One.

Jones, the anti-gambling activist, accused the Legislature of bowing to pressure from card rooms.

“When
they rub up against [gambling limits], they simply change the law for
their own benefit,” he said. “You get these well-heeled [gaming]
interests paying off public officials.”

Florez is chairman of the
Senate Governmental Organization Committee, which oversees gaming
issues. Card rooms this year have contributed $12,000 to his campaign
account. Last year, a group of Los Angeles-area card rooms made a
$25,000 donation to an account that Florez uses to advocate against Los
Angeles County dumping treated sewage in Kern County.

Florez said
there is no connection between the donations and his bills. SB 152, he
said, is a “reasonable” way to make room for larger poker crowds
without allowing for a major gaming expansion.

“The best way to
keep growth under control is to make these very small modest changes to
the moratorium,” he said. “If you go from 12 tables to 16 that’s not
really that big of a deal.”

And, he added, local governments would still have to approve any increase.

Even
so, Jones said the bill “undermines the ability of voters to be able to
control the expansion of gambling in their communities.”

A report
last year by the California Research Bureau questioned the ability of
locally elected officials to regulate card rooms because some small
cities are dependent on card rooms as a major source of revenue –
mostly from locally negotiated taxes.

One of those small cities,
Colma in the Bay Area, was behind last year’s effort to do away with
wagering limits. Card room revenue accounted for about a third of the
1,500-population town’s budget, according to a 2005-06 budget
projection.

Small towns in the Valley are less dependent on
gaming revenue because none have larger card rooms. For instance, The
Mint, a three-table card room in Porterville, pays the city $150 per
table per quarter. That comes to $1,800 a year, a tiny fraction of the
city’s $21 million general fund budget.

A Little Rock poker room will open despite warnings from city officials.

The National Poker Challenge markets itself as legal poker–and it is now set to open in Little Rock in September.

The National Poker Challenge, or NPC, delayed the opening of its poker room here in Arkansas after city officials told them the games would be in violation of state gambling laws.

While city officials maintain that point of view, the NPC now says it will hold tournaments.

The National Poker Challenge calls itself the nation’s only non-gambling legal poker tournament–and with no pay-to-play, the NPC says they maintain casino-style action without breaking the law.

(Youtube Video)”NPC holds a strict no-gambling policy. Most players do, however, pay a monthly fee for statistical tracking of their performance.”

Players can also compete in tournaments for cash prizes.

But, while other NPC franchises exist in Memphis and Portland, Little Rock officials say this type of poker room is in violation of Arkansas gambling laws.

That news delayed the opening of the Little Rock National Poker Challenge earlier this month. But now the NPC website confirms that after working on their relationship with Little Rock city officials, the NPC will be holding promotional free tournaments in Little Rock.

Free or not, Little Rock officials maintain this type of poker is illegal.

(Lt. Terry Hastings, Little Rock Police Dept.)”The Little Rock Police Department has not told them they cannot open the business. But anytime you win things–whether it be money or prizes or whatever–it’s illegal.”

Little Rock police also say they will make arrests if there is any alleged gambling.

The Poker Players Alliance is the first really serious effort at a political membership group for poker players. Launched in 2005, it’s designed to take the fight for poker freedom directly to Washington and politicians. The PPA has had positive support from around the poker world and is endorsed by major players. Though the organization was not able to prevent the UIGEA from happening, the PPA is doing everything it can to undo the damage. To this end, it has recently packed up and moved to Washington DC; promoted John Pappas, formerly vice president of government affairs, to executive director, and, earlier this year, signed on former senator Alfonse D’Amato as its chairman. Here’s a conversation with the aforementioned executive director, Pappas, and his leadership vision for this important group in poker politics.

PokerNews: Tell us a little about the Poker Players Alliance and its purpose.

John Pappas: Well, the Poker Players Alliance is a non-profit membership organization comprised of online and offline poker players. Essentially our membership has joined together to speak with one voice, promote the game, to insure its integrity and protect the right of people to play poker.

We have near 700,000 members nationwide, all spread out throughout the country. Our ultimate goal is to clarify federal laws, and state laws when necessary, to insure that poker players have a secure, safe, regulated place to play poker.

PN: One of your goals is at least a million members; is that correct?

JP: It is. Our goal by the end of the year is to reach a million members. We are optimistic that we can still reach that goal. We are engaging in some new and creative ways to partner with a bunch of different affiliated poker organizations, et cetera, in order to raise awareness and recruit members.

PN: How did you come to be associated with the PPA originally?

JP: I was a consultant when the PPA was first formed in the summer of 2005. They brought out a PR firm in Washington DC to help them, and it happened to be the first I was working at. I was the lead on the account, and have basically been with the organization since its inception.

PN: How are your duties different as executive director from when you were vice president of government affairs?

JP: Well, I’ll be overseeing and managing the overall operations of the organization rather than strictly looking at the lobbying activities, lobbying and grassroots – so that’s the real difference. This goes everywhere from member communications to board member relations to recruitment of new members – kind of being a more public face for the organization when appropriate, when Sen. D’Amato’s not available, et cetera.

PN: Will you be doing things differently than Michael Bolcerek did as president?

JP: I wouldn’t say I’m approaching things differently, but I’m putting the focus on things where I think there needs to be a focus. I think we need to beef up our grassroots efforts, and I think there needs to be a better line of communication with our membership. And then also, I really see the value of aligning the PPA with so many in the community that are already established. The poker community can help build awareness to our organization. So those are the areas that I’m going to really focus on for the next several months. And of course, we have a really serious fight here in Washington that we’re working on as well. We’ll working on a couple fronts.

The reason for relocating the organization to DC was so that we could concentrate these efforts in one place rather than being bifurcated.

PN: There are four separate pieces of federal legislation involving poker. How can the PPA divide its resources enough to support all four, and do any of them seem to have a greater chance of success at this point?

JP: Well, to be clear, there’s really only one piece of legislation that’s specific to poker and games of skill. That is the Wexler bill, and that is the bill that the PPA promised to deliver to its members. As soon as the UIGEA passed in the dark of night last year, we were going to get an exemption. And that’s exactly what the Skill Game Protection Act, HR 2610, introduced by Robert Wexler, seeks to do. So that is the only bill that’s specific to poker.

The other – probably the best vehicle for movement at this point in time is the Barney Frank bill, and that is HR 2406. It look at not just poker, but all forms of Internet gaming. It creates a license and regulatory regime for Internet gaming to become a legal, U.S. regulated industry. I think that’s a very positive development, and it also opens the door for potential taxation of the industry, which can reap in the billions of dollars annually to the federal government.

The other two bills – one is a tax bill, which could be, essentially – if the Barney Frank bill, or the Wexler bill, amended, ever became law, the tax bill would eventually become part of that, as kind of the revenue component to it. And then the fourth bill is Shelley Berkley’s bill, which looks at a study for Internet gaming. We support Shelley’s bill, but we believe it’s the most conservative of the approaches, because it does not seek to legalize or clarify the laws, it only says to Congress that we should study the issue.

PN: Are there any presidential candidates that would create a more positive environment for poker, and are there any that would definitely make it more hostile?

JP: Well, one would only have to look at Ron Paul, who’s a cosponsor of the Barney Frank bill and is running for President. Now, I think his presidency is a long shot. The PPA is not in a position, nor will it be endorsing any presidential candidates. I think the real goal here is to continue to educate all sitting members of Congress and those running for public office that there is a true and growing poker constituency out there and that they vote, and that their rights and opinions must be taken with the same weight as someone who is pro-Second Amendment, or pro-environment, or any other issue.

PN: Other than joining the PPA, what can poker players do as citizens to help fully legalize poker, especially online poker?

JP: Of course, them joining the PPA, contributing to the PPA and getting their friends to join and contribute is the first step, but it’s not just about that. It’s about talking about this issue with members of Congress given the opportunity, either by using the tools that we provide on our website, letter writing – it gives you all the information about your members of Congress. You can get the phone numbers and addresses and set up meetings, and try to seek out who your members of Congress are, when they’re back home in their districts, and meet with them.

It’s also about talking with other friends and neighbors and letting them know that this is an issue out there, and that it’s not just about poker; it’s about freedom. I think we’ve fallen into a trap of making people believe that this is just about poker players. This is really a freedom issue; it’s about freedom of the Internet, and it’s been the greatest assault, I believe, on the Internet that we’ve seen thus far. I think once we start broadening this issue, we’re going to get more support for it. Members of Congress and elected officials will realize that this isn’t just about poker – this is about freedom.

Law Will Require Casinos to Take 25 Percent of $5,000 or More

A new tax code has been released that spells out just how much money the government will take from those who are lucky enough to cash for $5,000 or more in poker tournaments.

Starting March 4, 2008, casinos and cardrooms are supposed to start withholding 25 percent of any poker tournament winnings of $5,000 or more. This will particularly affect the poker hobbyists who go deep in tournaments with buy-ins that range from  $100 to $550, and of course those who make their living humping the tournament poker trail.

Language in the new tax code pointed to a tax court ruling that took place earlier this year. The ruling held that tournament poker is not a skillful competition and should be considered a gambling activity, at least for the purposes of taxation.

The law requires casinos and cardrooms to withhold and report the winnings from a player if it amounts to $5,000 or more in a tax year. The code does not address winnings from online poker sites or from casinos off U.S. soil.

Here’s an example of how much money the government will be making off of poker tournaments after March 4, 2008. If the law was in effect earlier this month, the top seven finishers of the $500 event that took place Aug. 7, at the Legends of Poker would have paid a total of $40,221 in taxes.

The runner-up of this tournament, which attracted a healthy 460 entrants, would have taken home $27,972 after taxes ($37,295 before). The winner received $74,585. If the law was in place, that amount would’ve been $18,646 less.

The notice that was released to accounting firms this week follows:

Background. Under Code Sec. 3402(q)(3)(C)(i), payers must withhold 25% on proceeds of more than $5,000 from a sweepstakes, wagering pool, or lottery (other than a state-conducted lottery, covered by another withholding rule). Proceeds from a wager are determined by reducing the amount received by the amount of the wager. (Code Sec. 3402(q)(4)(A))

Facts. A poker tournament sponsor charges an entry fee and a buy-in fee for each participant. In exchange for paying the buy-in fee, a participant receives a set of poker chips with a nominal face value for use in the specific poker tournament. The sponsor pays amounts, which exceed a participant’s fees by $5,000, to a certain number of tournament winner(s), out of a pool made up of all the participants’ fees.

Poker tournament sponsors must withhold. Rev Proc 2007-57, which is effective for payments made on or after Mar. 4, 2008, says poker tournament sponsors (including casinos) paying amounts to winners in a manner substantially similar to the facts above, must under Code Sec. 3403(q) withhold and report on payments of more than $5,000 made to a winning payee in a tax year. They must furnish a copy of the information return to the IRS on or before Feb. 28 (Mar. 31 if filed electronically) of the calendar year following the calendar year in which the payment is made. Rev Proc 2007-57 cites legislative history for the proposition that the term “wagering pool” includes all pari-mutuel betting pools, including on- and off-track racing pools, and similar types of betting pools. It also cites a non-tax case (U.S. v. Berent, (CA 9 1975) 523 F.2d 1360, 1361), holding that in common usage “pool” means “a particular gambling practice, an arrangement whereby all bets constitute a common fund to be taken by the winner or winners.”

The IRS said it won’t assert any liability for additional tax or additions to tax for violations of any withholding obligation relating to amounts paid to winners of poker tournaments under Code Sec. 3402, as long as the poker tournament sponsor meets all of the requirements for information reporting under Code Sec. 3402(q) and its regs.

RIA observation: Earlier this year, the tax court held that tournament poker is a wagering activity for purposes of the Code Sec. 165(d) limit on gambling losses. See Federal Taxes Weekly Alert 03/01/2007.

CardPlayer (08/31/07)

TheEngineer’s Congressional Scorecard has moved to his PPA blog.

Click here to go there now.

When I first arrived in
Ramadi, Iraq in September of 2006, I experienced a range of different
emotions. Anxiety. Excitement. Fear. Not fear of death, but fear of
change and the unknown. Being In Iraq for a year changes you; some of
us for the better and some for the worst. It makes you tougher, hardens
you to deal with bullsh*t, and makes you appreciate the smaller things
in life.

In Iraq, each day of your life is precious; it is measured by the
hour and minute, literally. Not only for the military, but for the
people who live here and are just like you and me. The people who wake
up each day and try to make a better living for themselves and their
children. Their hopes for their kids’ future are the same as any
parent. The kids there are a wonderful sight. They’ve endured more
hardship than most people stateside will ever see in their lifetime,
and yet they smile, wave, and ask for candy as if oblivious to the
world they are living in. Their innocence is the bright spot for this
war torn country. Hopefully they will make the changes necessary for a
brighter future to live in, for themselves and future generations.

Over the last twelve months I’ve done my best to keep in touch with
family, friends, and current events. Unfortunately our communication
methods are pretty primitive. Even with the slow internet, I was able
to follow news events, most of which were irrelevant to our current
situation. There were three key events that took place over the last
year that had a big impact on me. The troop surge, mandatory
active-duty extensions, and of course the Unlawful Internet Gaming
Enforcement Act were the most prevailing:

1. The decision to boost the forces was understandable, but seemed
overdue. Time will tell if this decision was the best for the situation
and timing.

2. The active-duty extension from 12 months to 15 months was
agonizing. The Army already serves the longest tours of any military
branch, and that puts strains on the soldiers and their families. The
leaders, however, believe boosting the months will ease that strain,
because the families will know the exact date their loved ones will
return. These decisions look good and sound good on paper, but I doubt
they ever consulted the average military family. I keep my fingers
crossed that one day soon we will find an end to all of this.

3. The UIGEA being passed was a bit unsettling. Everyday as service
members, we’re reminded that we are in Iraq to protect freedoms back
home. The passing of this bill was a direct contradiction. Poker is a
game that has deep roots in America’s past and present culture. It’s a
game in which anyone can pick up the cards and play, regardless of
their level of skill.

On any given night this past year, you could find poker games being
played around our numerous living areas. It’s where life long
friendships were made, where we escaped reality, and for a few hours we
were reminded of life back home. It was our choice to play, a personal
freedom we could enjoy, a decision that was made by us and no one else.
Playing poker should always be a personal choice and a personal
freedom. Without the power to change things on my own, I’ve joined the
PPA in hopes they can make a difference and restore some faith in our
already unstable government.

No matter how the world was changing around us, we had a job to do.
No one ever let decisions made back home affect the overall mission,
myself included. When you’re deployed to a combat zone, you have ONE
goal. That is to make sure to look after the buddy next to you and
bring everyone home safely. Unfortunately, we lost some really good
people this last year. I will always be grateful and appreciative for
the sacrifices they have made.

What I’ve learned overall this past year is that life is short. I
don’t regret the time I spent in Iraq, and I will cherish the
experiences and memories, such as the many nights spent in hundred
degree heat playing poker and talking about life outside Iraq. Everyone
coming home, as well as those who couldn’t make it back, had dreams,
passions, and goals in life. If playing poker is your passion, then
pursue it to the fullest. If your goals and dreams lay elsewhere,
follow them. I made a promise to myself, as well as to those who were
lost this past year and the years before. I would pursue my dreams and
live life each day to the fullest in honor of them. I hope you do the
same for you.

We had a saying we believed in: “It’s not what we are here for, it’s who we are here for,” and that was each other.  Please try to appreciate this about these troops, regardless of your feelings about the war itself.

I would like to thank some people who have been very supportive this
last year. Platinum Entertainment, who donated the chips that we put to
good use, Ari for sharing his knowledge and support, and of course
PocketFives.com and its members, whom I could always count on for a
good morale boost. Last but not least, I want to thank all the fallen
heroes.

Moses Rob

BRUSSELS — The Bush administration, pressured by an unfavorable ruling by the World Trade Organization, plans to push for legal changes that could make it easier for European service companies, from engineering firms to law firms and shipping companies, to do business in the U.S., officials say.

The U.S. is required to offer trading partners greater access to the American market because in May it lost a long-running dispute at the World Trade Organization over laws that banned foreign firms from offering Internet gambling services in the U.S.

Europe’s online gambling firms were hit particularly hard and complained to the European Union’s executive arm in Brussels. EU trade officials took up the matter with the WTO, seeking compensation for billions of euros in lost income. The EU invoked a rarely used WTO rule that requires a country that closes one market to foreign companies to open others to compensate trading partners.

A host of countries, including India, Japan and Canada, have filed similar claims for compensation, but the talks with the EU and its $8 trillion service sector promise to have the biggest financial impact. As a result, while any affected sectors would be opened to all 150 WTO members, European companies stand to gain the most.

The Office of the U.S. Trade Representative this month began talks with EU officials on opening some sectors of the U.S. services market to greater foreign competition.

To be sure, the issue will be contentious and subject to fierce lobbying. Congress and state legislatures would have to sign off on changing laws that now protect American service concerns. States generally control access to sectors like insurance, engineering and legal services. The federal government controls foreign access to activities like shipping, telecommunications and postal services.

The U.S. Internet gambling market is valued at more than $15 billion, so the outcome of the U.S.-EU negotiations will likely be worth billions of euros to European companies. “We have to offer something substantive,” says a senior U.S. official.

Global trade in services is growing quickly. U.S. consumers bought $314.6 billion of foreign services in 2005, twice as much as in 1997, including banking, insurance and airplane trips. The areas in which European companies hope to gain greater access include insurance, legal services and mail delivery, says Pascal Kerneis, secretary-general of the European Services Forum, a Brussels lobbying group.

One example of the kind of practice the EU could seek to change: Today, a foreign lawyer or law firm can’t practice law in New Jersey without residing in the U.S. (though they can in Maryland). Foreign companies are also prohibited from offering some forms of legal services in Delaware, a lucrative market because of the high number of corporate registrations in the state.

This means U.S. trade officials have to include states in their negotiations. Setting policy on trade in goods, by contrast, is relatively simple because the federal government controls tariffs on all imports.

According to several legal experts, the states might not be easy to win over. “Frankly, I’d be very surprised if the Bush administration pushes for federal legislation that would affect access to U.S. markets for foreign lawyers,” says Laurel Terry, a professor at the Penn State Dickinson School of Law and an expert in the regulation of the legal industry. “The issue of lawyer regulation is very sensitive and has traditionally been handled by the state judiciary.”

The U.S. is required to submit a formal offer of market access to the EU by Sept. 22. If the sides disagree, a WTO panel will arbitrate. That has never happened in a case on services, so the outcome would set a precedent. In the end, the U.S. could hope to mollify the EU by offering trade concessions in other protected areas where the EU and U.S. disagree, including agriculture, military contracts or subsidies to aircraft makers.

British gambling companies such as 888 Holdings PLC and Party Gaming PLC — which drew more than half their revenue from the U.S. — lost billions in stock-market value after a new U.S. law banned credit-card companies from receiving payments from foreign gaming Web sites.

The USTR could be bailed out by Congress were it to change the law to again allow foreign firms to offer online gambling. Several such bills are on the table.

“The U.S. could make this all go away by passing legislation,” says Nao Matsukata, a former senior U.S trade official and a policy adviser at Alston & Bird, which represents clients on online-gaming issues.

So far, none of the bills have garnered enough support. European gambling companies say they have given up hope of doing business in the lucrative U.S. market for now.

The forced concession to the EU on services marks the end of a losing battle the U.S. has fought at the WTO, mainly with the Caribbean nation of Antigua and Barbuda. In 2003, the country challenged U.S. prosecution of foreign online-gambling companies. The U.S. argued it was entitled to ban foreign gambling companies because it couldn’t have foreseen the rise of the Internet when it first pledged to open part of its services market in 1994.

With long blond hair reaching his shoulders and dozens of cloth bracelets peeking out from under his sleeves, Mark E. Mendel hardly conjures up the image of a typical lawyer.

But then there is nothing run-of-the-mill about the case that Mr. Mendel, a Texan who was born and raised in Southern California, has been waging against his own government before the World Trade Organization, the body in Geneva that sets the ground rules for global trade. It is a clash that at once challenges Washington’s effort to prohibit online gambling while simultaneously testing the ability of the W.T.O. to enforce its own standards.

The dispute stretches back to 2003, when Mr. Mendel first persuaded officials in Antigua and Barbuda, a tiny nation in the Caribbean with a population of around 70,000, to instigate a trade complaint against the United States, claiming its ban against Americans gambling over the Internet violated Antigua and Barbuda’s rights as a member of the W.T.O.

Antigua is best known to Americans for its pristine beaches and tourist attractions like historic English Harbor. But the dozens of online casinos based there are vital to the island’s economy, serving as its second-largest employer.

More than a few people in Washington initially dismissed as absurd the idea that the trade organization could claim jurisdiction over something as basic as a country’s own policies toward gambling. Various states and the federal government, after all, have been deeply engaged for decades in where and when to allow the operation of casinos, Indian gambling halls, racetracks, lotteries and the like.

But a W.T.O. panel ruled against the United States in 2004, and its appellate body upheld that decision one year later. In March, the organization upheld that ruling for a second time and declared Washington out of compliance with its rules.

That has placed the United States in a quandary, said John H. Jackson, a professor at Georgetown University Law Center who specializes in international trade law.

Complying with the W.T.O. ruling, Professor Jackson said, would require Congress and the Bush administration either to reverse course and permit Americans to place bets online legally with offshore casinos or, equally unlikely, impose an across-the-board ban on all forms of Internet gambling — including the online purchase of lottery tickets, participation in Web-based pro sports fantasy leagues and off-track wagering on horse racing.

But not complying with the decision presents big problems of its own for Washington. That’s because Mr. Mendel, who is claiming $3.4 billion in damages on behalf of Antigua, has asked the trade organization to grant a rare form of compensation if the American government refuses to accept the ruling: permission for Antiguans to violate intellectual property laws by allowing them to distribute copies of American music, movie and software products, among others.

For the W.T.O. itself, the decision is equally fraught with peril. It cannot back down because that would undermine its credibility with the rest of the world. But if it actually carries out the penalties, it risks a political backlash in the United States, the most powerful force for free-flowing global trade and the W.T.O.’s biggest backer.

“Think of this from the W.T.O.’s point of view,” said Charles R. Nesson, a professor at Harvard Law School. “They’re this fledgling organization dominated by a huge monster in the United States. People there must be scared out of their wits at the prospects of enforcing a ruling that would instantly galvanize public opinion in the United States against the W.T.O.”

In April 2005, the trade body gave the United States one year to comply with its ruling, but that deadline passed with little more than a statement from Washington that it had reviewed its laws and decided it has been in compliance all along. The case is now before an arbitration body charged with assessing damages.

“The stakes here are enormous,” Professor Nesson said.

If anything, the Bush administration raised those stakes in May when it announced it was removing gambling services from existing trade agreements. John K. Veroneau, a deputy trade representative, said that the federal government was only “clarifying our view” that it had never meant to include online gambling in any free trade agreements.

“It is truly untenable to think that we would knowingly bargain away something that has been illegal for decade upon decade in this country,” Mr. Veroneau said, adding that Washington is not defying the W.T.O. but simply pursuing its case through all legal channels.

The W.T.O. allowed that Washington probably had not intended to include online gambling when it agreed to the inclusion of “recreational services” and other similar language in agreements reached during the early 1990s, when the W.T.O. was first established. But the organization says it has no choice but to enforce the plain language of the pacts.

“Geneva is certainly buzzing about this case,” said Lode Van Den Hende, an international trade lawyer with the firm of Herbert Smith in Brussels.

One reason for all the interest is the David-and-Goliath aspect of the case. Another is that the dispute, as the trade organization’s first to deal with the Internet, is likely to serve as a major precedent in establishing rules of commerce in an online age and dealing with such prickly issues as China’s attempts to block online content it finds offensive.

Yet another reason the fraternity of trade lawyers and experts are so closely watching the case, Mr. Van Den Hende said, is “that the U.S. is not behaving as one would expect.”

“One day they’re out there saying how scandalous it is that China doesn’t respect W.T.O. decisions,” he said. “But then the next day there’s a dispute that doesn’t go their way and their attitude is: The decision is completely wrong, these judges don’t know what they’re doing, why should we comply?”

It’s not clear that Mr. Mendel knew just how much of a hornet’s nest he would stir up with this case. But he certainly seems to be enjoying the attention.

In 2002, Mr. Mendel — who does not gamble and knew little about international trade — was little more than a corporate lawyer in El Paso specializing in securities law. His law partner, though, was friends with Jay Cohen, an operator of an offshore sports betting operation in Antigua who had been sentenced to 21 months in prison for taking bets over the Internet from Americans. Mr. Cohen asked his friend to see if there was anything his firm could do.

“I had not done any trade law whatsoever, but for whatever reason this issue really struck my curiosity,” Mr. Mendel said. Beyond the intellectual challenge, the case also offered the prospect of a set of deep-pocketed clients — the online casinos doing business out of Antigua.

So Mr. Mendel, 51, who recently moved his family and his practice to Ireland to be closer to Geneva, jumped in enthusiastically.

Washington responded to Antigua’s complaint by claiming it was within its rights to seek to block online gambling on moral grounds, just as any Muslim country would be within its rights under international trade agreements to ban the import of alcoholic beverages. The W.T.O. rejected this argument as inconsistent with American policy.

The general rule in the world of international trade agreements is that a country must treat foreign goods and services in the same manner as it treats domestic ones. The United States, the trade body found, permits online wagering through sites like Youbet.com, a publicly traded company that allows visitors to place bets at horse racing tracks around the globe.

And, of course, some form of casino gambling is legal in more than 30 states, and even local governments advertise gambling services when states encourage people to buy a lottery ticket.

“This isn’t a case of forcing gambling on a population that has decided they don’t like it,” Mr. Mendel said. “This is the world’s biggest consumer and exporter of gambling services trying to prohibit a small country from developing its economy by offering these same services. And we find that deeply hypocritical.”

Indeed, despite all the obstacles Washington has imposed, including making it a crime for banks and credit card companies to handle Internet gambling payments, millions of Americans still manage to play poker and place sports bets online. Many more would certainly do so if the obstacles were removed.

The United States has exhausted its appeals, so Mr. Mendel and lawyers for the United States are arguing over the extent of damages that Antigua has suffered.

Antigua presents a particularly thorny challenge. To balance the scales, a country that wins a W.T.O. case typically demands trade penalties equal to its losses as compensation. But Antigua is so small that any ordinary trade sanctions would barely register in the United States.

“Compensation is not a check in the mail,” Professor Jackson of Georgetown said. “It’s the right to raise trade barriers against the country in violation.” Whatever trade barriers Antigua imposed, he said, “would feel like a pin prick.”

To get around that limitation, Antigua is seeking the right under international law to violate American intellectual property laws.

Only once has the trade organization done so, with Ecuador, though Ecuador never actually took advantage of that power. It was used instead as a cudgel to force Ecuador’s opponents to back down.

“This is all new territory,” said Simon Lester, who worked in the appeals unit of the W.T.O. before helping to found WorldTradeLaw.net, which provides legal analysis of trade law disputes.

Mr. Lester expects Hollywood, the music industry and software makers like Microsoft to press Washington to work things out with Antigua.

“But the question,” he said, “is whether that would be enough to make Congress do something.”