May 10, 2007
Games Predominantly Subject to Chance
Catching up on my Wall Street Journal and Barron’s reading… one thing comes to mind: Rupert Murdoch is nuts to offer $60 for DJ and the Bancrofts are fools for not leaping to accept that “noneconomic” price. Anyway, there was an article called Harvard Ponders Just What It Takes To Excel at Poker where I learned that:
“Under U.S. common law, games that are predominantly chance are considered gambling, while those that are mainly skill are not.”
It’s kind of a strange definition, isn’t it? How can you precisely quantify the split of chance versus skill in a game as complex as poker? And they’re using that faulty thinking to make laws? Of course I support the lifting of the credit card ban on online wagering (not that it has affected me; I continue to play poker online all the time using a massive cash balance left over from the old days, lol).
Aside: It’s also kind of strange that state governments have no problem monopolizing and profiting obscenely from those card games that require an extremely skillful scratching of sticky silver gunk, but I digress.
Anyway, I can say as someone who has finished in the money in dozens (hundreds?) of no-limit Texas Hold’em tournaments that poker is predominantly (the key word) a game of chance. Skill matters of course (maybe ~30%) but luck matters more (maybe ~70%), and you’d be hard pressed to find a professional (or professional amateur) poker player who would say otherwise.
If I remember clearly, even the great Dan Harrington devotes a chapter in his first book, using an AK hand he chose to fold as an example, where one (lucky) decision made all the difference in one of his WSOP wins. Writing this post makes me want to go try my luck, er skill, in a $5 Quickie right now. ;-)
May 10th, 2007 at 9:13 pm
Remember that “government” is morally no different than the Mafia; and then it will all make sense. The lottery is OK because they get the take! Of course the Mob would nver let YOU run numbers on their corner, that is reserved for the Mob’s designated entities.
May 10th, 2007 at 9:15 pm
i folded queens early on in a sit n go last week. i was in 4th seat, it was bet, i raised 4*, a few players on, dopey person who had played the first few hands reraised AI, then another person went AI, and i said “one could be a dope, but not two”. first person had ATo, second had kings.
i’m not good enough to fold them against one big re-raiser, though.
the north carolina judge was an idiot in that recent case.
DNDN not shortable except through one clearing firm. not trading it, in any event.
May 10th, 2007 at 9:30 pm
It is pretty meaningless to say “predominantly subject to chance” in the sense that even the slightest favorable bias due to skill can make a huge difference in the long run, although the outcome of any given game may not be predictable based on the skill of the players. Especially in poker, where there’s no house edge to overcome.
May 10th, 2007 at 9:54 pm
bob: I frequently fold the ladies to pre-flop all-ins.
libertas: Yeah, that’s probably a good way to look at it. Skill means more in the long run, but remember what Keynes said about the long run.
May 11th, 2007 at 1:53 am
TWTR dummy play du jour!
May 11th, 2007 at 6:27 am
CM: If poker is 70% luck and 30% skill, I’m interested to know what you think of trading? And let’s assume that’s for a professional trader - someone doing that for a living.
May 11th, 2007 at 7:19 am
Spock: I’d reverse it and say trading is at least 70% skill because success is mainly about risk management. When trading you can take chips back out of the pot at any point — try that in a poker game sometime. ;-)
May 11th, 2007 at 7:20 am
bob: TWTR set up nicely for Dummies but could you find shares?
May 11th, 2007 at 6:43 pm
yup, i got shares of TWTR at two brokers….
May 12th, 2007 at 8:21 am
bob: IB and Ameritrade?
May 13th, 2007 at 1:10 pm
I hate to fold cowboys as well but you have to play the odds and be smart when you could be beat. It’s all about winning in the long run and not on just one hand. Risk management in poker.
May 13th, 2007 at 7:46 pm
KC: I am almost never fold Kings but that’s because I’m a chauvinist pig, lol.
May 14th, 2007 at 12:07 am
chairman - yup, those 2. i’m likely opening an acct @tradestation for their backtesting soon, knowing they don’t have a stunning short list. will keep it very small until i see how they are; otherwise, i’ll pay the $99/month (waived if you trade more than 5000 shares).
there’s another brokerage which appears to have a great short list, but i’m waiting until i’m done my backtesting - which can be a while - before considering opening yet another one…
May 14th, 2007 at 9:36 am
bob: It will take you about ten seconds to trade 5000 shares given your affinity for shorting drillbit stocks. ;-) Let me know how your TS affair goes — about 100 readers have emailed me sasying how much they love them but they could be moles for the company, lol. Don’t be a tease about this great short list brokr — email me if you don’t want to reveal it in the comments.