note: the following was excerpted from the Economist article.
The skill-versus-luck debate has crackled back to life because of the passage of a law last year, sneakily tacked on to a port-security bill, which sought to bolster existing legislation against internet wagering by blocking Americans’ access to accounts that can be used to gamble online. All games that are “predominantly” subject to chance were covered by the ban. Poker was included. For reasons best explained by lobbyists, horse racing, fantasy sports and lotteries were exempted. This discrepancy had already landed America in hot water at the World Trade Organisation, thanks to a case brought by tiny Antigua, home to several online gambling sites.
America’s Department of Labour has given a nod to the element of skill, in some eyes, by last year recognising “professional poker player” as an official occupation. Courts, however, tend to view poker as a game of chance. That, Mr Lederer is convinced, is only because the opposing arguments have been botched at the bench.
As he concedes, it is hard to argue that a seasoned professional will beat a first-timer in any given hand. But there is evidence aplenty that, over the long run, a player with a head for calculating odds and a feel for the psychology of the game, such as bluffing, will always overcome an untalented opponent.
The skill, Mr Lederer argues, is in the betting. And it is apparent in the fact that you can win without the best hand. More than half of all hands end without the cards being shown, not because one player got lucky but because he managed to persuade the others, given their analysis of the available information and the size of the pot, that it was sensible to fold. When no one declares their hand, can it really be argued that the outcome was determined by luck?
At the highest level, decisions about betting, bluffing and folding are based on the complex juggling of probabilities. “What drew me to poker is that it is essentially an academic endeavour,” says Ms Duke. She is one of a growing group of full-time players who came to poker through game theory and mathematics, not through any love of a flutter. (Indeed, she never plays craps or roulette.) Others include Mr Lederer (her brother) and Mr Ferguson, who has a doctorate in computer science and writes academic papers on probability theory with his father, a statistician at UCLA.
Thomas Bihl, winner of a recent HORSE tournament, in which players have to show mastery of five different styles of poker, thinks the game has more in common with finance than it does with basic forms of gambling, because it requires the constant pricing and repricing of risk. Mr Bihl, a former stock trader, says the move from his old job into poker was a natural progression. Though his £71,000 win was “a huge lift”, he says that he is motivated not by money but by the chance to use his brain to outfox opponents. This is a common refrain among regular players. As Ms Coren put it in a recent article: “Cash is nothing more than chips, just the tools of the trade, like fishing rods to an angler. The game is all about money, and nothing to do with money.”
Those who think skill predominates also point to the fact that some players excel at the game while others don’t. Dan Harrington made the final table of the WSOP in both 2003 and 2004, the odds of which would be 25,000 to one if it were down to chance. Stu “The Kid” Ungar, a brilliant player with a self-destructive streak, won three times in not many more attempts before succumbing to drugs.
Moreover, when wealthy amateurs pit their wits against professional players steeped in poker theory, more often than not they lose their shirts. In a number of sessions beginning in 2001, Andy Beal, a Dallas-based banker, locked horns with a syndicate of pros, including Mr Lederer, convinced that he could come out on top. He did not.
After two weeks of poker, with daily sessions lasting up to 16 hours, Jerry Yang, a psychologist, went home $8.25m richer
Nevertheless, luck is important. It blends with skill to produce a game that is “much like life, full of incomplete information and second-guessing,” says Mr Lederer. Poker is certainly more exciting to most than chess, a game of complete information and limited psychology where the better player always wins. Tellingly, whereas computers can be programmed to play chess at the highest level, they still have a long way to go to match expert players in poker games with more than two participants. The best attempt so far, Polaris, developed by researchers at the University of Alberta, failed to get the better of two top players, Ali Eslami and Phil “Unabomber” Laak (who plays hooded).
Moreover, professionals say that poker’s generous dollop of luck is good for them on balance, because it attracts money from neophytes who fancy their chances of beating the top players in tournaments. Some pros disparagingly call such players “ATMs”. But, as Mr Moneymaker showed, the newcomers occasionally win big. His victory in 2003 led to a surge in entrants for the World Series main event from 512 in 2000 to 8,773 in 2006. A dip this year to 6,358 reflected the new American law’s effective ban on internet sites buying satellite-competition winners into the tournament. (Some tried to get around this by sending the winners cheques instead, but most recipients simply held on to the money rather than using it to buy themselves in.)
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