Friday, July 16, 2010

Poker - A Game of Chance or Skill?

Some very nice articles in the Economist on gambling. Here is one on whether Poker is a game of chance or skill.

'Most experienced players insist that success at poker is not about luck. David Sklansky, author of “The Theory of Poker” writes that “expert players do not rely on luck. They are at war with luck. They use their skills to minimise luck as much as possible.” In poker, as in life, luck can happen to anyone; it is evenly distributed. Skilled players know how to take advantage of it when it happens to them, and get out of the way when it is someone else’s turn.'

This is not a theoretical point; it is at the heart of a dispute about poker’s future in America, the country of its birth and its largest single market. UIGEA (the enforcement mechanisms of which have only just come into effect, even though the act was passed in 2006) bans financial institutions from transferring funds for bets in which “opportunity to win is predominantly subject to chance.” Poker has been judged to fall into that category'

A 2009 study carried out by Cigital, a software consultancy, analysed 103m hands of one of the main varieties of poker, Texas Hold ’em, played at, and found that over 75% of them were decided before a showdown. They thus depended far more on the players’ betting decisions than on the cards dealt. The Poker Players’ Alliance, a million-strong group of aficionados, argued in the South Carolina Supreme Court that “the structure and rules allow sufficient room for a player’s exercise of skill to overcome the chance element in the game.”

Yet perhaps the clearest argument in favour of poker being skill- rather than chance-dependent comes from Mr Sklansky, and it has to do with losing rather than winning. Imagine trying intentionally to lose at a game of pure chance, like roulette or baccarat. It would be impossible. At the beginning of a deal or a roll you have to bet on something. You can no more deliberately play badly than you can deliberately play well. The same is not true for poker, which offers multiple opportunities to make sure you lose.


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