Tuesday, 8 June 2010

Is Poker a game of luck?

I say not. As the FullTilt advert says, if poker were a game of luck, how come the same faces consistently make the final tables of big tournaments.

The US government seem to believe it's a game of luck - they grouped it in with gambling and banned the online elements.

The UK taxman seems to believe it's a game of luck - he applied casino gaming tax to DuskTillDawn (despite it being a poker establishment with no table games) which so nearly put it out of business.

The unwise majority believe it's a game of luck, particularly those that wrinkle their noses when I say I play poker for a second income. For some, the word poker seems to conjure an image of a seedy basement room with degenerate gamblers drinking whisky and smoking fat cigars - personally I prefer the comparison to the wild west saloon, with 6-shooters laying at the side of the table waiting for that big showdown hand to go bad.

Flipping a coin and betting on the outcome - that's gambling on luck. The coin will either be heads or tails - a 50/50 gamble. Winning or losing is based purely on luck.

Backing horses, or betting on the outcome of sporting events - that's still gambling, but with knowledge and research, the winning gambler will reduce the impact of luck.

It's obvious that Chess is a game of pure skill - there is no luck in chess. So, if we play chess for money, we are gambling on the outcome of the game, but not betting on a luck variable. I say the same for poker.

Apparently, 90% of those who play poker are overall losers - therefore only 10% are overall winners. If poker were a game of luck, surely 50% of players would be losers, and 50% would be winners.

Poker is a skill game, despite what the US politicians say. The better poker players are the ones who negate the luck factor, use their skills to make the right decisions at the right times, and avoid situations where they would consistently lose money. The key word is consistency - to consistently win a gamble proves that luck is a minor factor when compared to the value of the skill factor. Clearly a poker player cannot win each and every hand they play - the random shuffle of the deck plays a part, and sometimes the poor or incorrect decisions of others will be rewarded - however over a significant volume of hands, these variables generally even out.

It's widely accepted that to judge a player as a winner or loser requires at least 10,000 hands to be analysed. The concept being that over a significant volume of hands, the luck factor will play less of a part. Thinking back to the tossing of a coin - toss it 10 times, it could land on tails 8 and heads 2. Toss it 10,000 times, and it's highly unlikely that it will land on tails 8,000 times.... it's far more likely to be nearer 5,000 each.... the 50/50 luck factor flattens itself out over time and volume.

From my own personal perspective, I recognise that winning a hand through luck, ie hitting that miracle 2 outer on the river, is nice but little to do with my skill as a player. I also understand that for every one of those I win, I'm just as likely to lose one. I stand firm to the long term view.

Now, the purpose of writing this??

In the past month, I have played well. I know I've played well, and I've done my best to stay upbeat about my game, despite being in the hole financially. Four weeks ago I was playing $1/$2 with a $200 buy in, and being successful. I made a decent sized withdrawal, and accepted that I was going to drop back down the limits to rebuild the bankroll. So, back at 25c/50c with a $50 buy in, and still playing well. But winning? No. Unlucky? Very.

It felt like every time I got my money in good, I was being outdrawn. At one point I was so low I felt like taking a break - poker just isn't working, and I am continually losing, therefore I must be playing badly, not well. BUT, I did some statistical analysis to try and identify the leaks, and found that my Expected Value, ie the amount I could expect to win at the point when my chips went into a pot was significantly higher than the amount I actually ended up winning - indication of numerous outdraws....... and did I get the upside to counter the downside? Not yet!!

The top line on this graph is my Expected Value over the last 7,000 hands, and shows a steady increase - the lower line is my Actual Value, which shows the exact opposite trend. The two lines are around $1,000 apart - ie, if luck were not a factor, I could be as much as $1,000 better off over the last 7,000 hands.

So yes, luck does play a significant part in poker, and yes I acknowledge I've had my moments where luck has played a part in my favour. But looking at this from a career perspective, would I really want to invest my livelihood in something where luck can be so damaging?

In my tournament poker, I am a consistent winning player, particularly in single table tournaments...... yet through this past month I have a negative ROI for the first time in 4 years, despite continually playing acceptably well.

There are two conclusions I can draw from this whole luck vs skill debate.

1. Poker is definitely a skill game.
2. In mid May, I must have run over a feckin robin!

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