WSJ Poker Article

[TiderInsider]

Interesting read....

Harvard Ponders
Just What It Takes
To Excel at Poker
Prof. Nesson and Others
Stress the Skill Involved;
Why It's a Legal Issue
By NEIL KING JR.
May 3, 2007; Page A1

CAMBRIDGE, Mass. -- Four-time poker champion Howard Lederer makes a plush living playing cards. His scholarly calm at the table has earned him the title "The Professor," along with $3.3 million in tournament prize money.

Just don't call him lucky. To describe poker as anything but a game of skill, he says, "is just wrong."

Now poker fans in academe are jumping in to help prove that point, most recently with a daylong "strategy session" at the Harvard Faculty Club bringing together poker pros like Mr. Lederer, game theorists, statisticians, law students and gambling lobbyists.


"The purpose of this meeting," said Harvard University Law School professor Charles Nesson, kicking things off beneath the dusty visages of long-dead Harvard poets and divines, "is to legitimate poker." To do that, Prof. Nesson and his fellows hope to show, statistically, philosophically, legally and otherwise, that poker is a game in which skill predominates over chance.

It is the straight flush of poker theory -- and just about as elusive.

The skill debate has been a preoccupation in poker circles since September, when Congress barred the use of credit cards for online wagers. Horse racing and stock trading were exempt, but otherwise the new law hit any "game predominantly subject to chance." Included among such games was poker, which is increasingly played on Internet sites hosting players from all over the world.

By making the case for poker as a skill, aficionados hope to roll back the law, and even win the game newfound freedoms in states where wagering on poker is currently banned.

LUCK OR SKILL?


• Vote: Is poker predominantly a game of luck or a game of skill? Discuss in a reader forum.

Poker has been on a tear for years in the U.S. and is "rampant, in a good way," among Harvard law students, Prof. Nesson says. Poker-players-turned-celebrities vie for million-dollar purses on ESPN and the Travel Channel. Millions of Americans now play the game with some regularity. The Department of Labor last year recognized "professional poker player" as an official occupation. Even Supreme Court Justice Antonin Scalia, who sent his regrets for the Harvard session, plays in a regular game.

Yet poker, in many corners, retains its image as a smoky pastime of gamblers and cheats. More pernicious to some is its modern incarnation on the Web, where play also boomed until Congress passed its September ban.

Supporters of the law, which was slipped into a port-security bill, argued that Internet casinos feed addictive gambling and lead college students to rack up huge losses on their credit cards. They also cited concerns that the sites were run by offshore companies outside the purview of U.S. law.

Leading a Counterattack

Mr. Lederer and his sister, Annie Duke, one of the country's best female poker players, are helping lead the counterattack. Joining them is the newly muscular Poker Players Alliance, the game's lobbying group, whose membership has swelled to more than 400,000. The group has targeted unsympathetic lawmakers and launched letter-writing campaigns to overturn the ban. The group's Web site features the photo of a brain and the line, "It's Better to Be Skillful Than Lucky."

Now academics like Prof. Nesson are joining the cause. "It's about time poker became a subject of academic inquiry," says the Harvard professor, an amateur poker buff who at 67 buzzes about campus on a moped.

Prof. Nesson has jumped on the poker cause largely as a personal-freedom campaign. He says he has received no money from the industry, but the Poker Players Alliance did pay for the faculty club rental and food for the day.

Poker is at heart a betting game in which players compete against one another for a growing pot of money. Players win either by getting the others to fold their cards or by having the best hand, ranked according to a hierarchy. Poker's name most likely derives from an ancient French bluffing game called poque, from the antiquated French verb poquer, which meant "to bet."

The luck-versus-skill debate is a lot more recent. Under U.S. common law, games that are predominantly chance are considered gambling, while those that are mainly skill are not.

In 1989, in a case enthusiasts love to cite, a California circuit-court judge ruled in favor of poker as a skill, allowing the state's famed card rooms to stay in business. But in 2005, a North Carolina state judge smacked down a local card club, calling poker a game of chance. Case law in other states is just as mixed. Judges in Colorado, for instance, have taken both sides.

'Mini-Version of Life'

Prof. Nesson's gathering quickly agreed that poker is clearly a game that some excel at and others don't. "Poker is a very structured mini-version of life -- and also an incredibly difficult game to get good at," says Mr. Lederer, who took up cards at 18 and dropped out of Columbia University two years later to play full time. Both he and his sister now consult for online poker sites, and both attended the Harvard gathering.

Mastering the game, particularly the dominant version these days known as Texas Hold 'Em, can take years. Its complexity of betting and bluffs has long exasperated computer programmers who have tried to mimic the best players.

But defining that skill is just as tough. Is it an ability to bluff? Is it largely a mathematical knack at calculating the odds of getting a certain hand, and then betting accordingly? Or is it a combination of those skills?

Scientific Solution

Some hope the solution can be found scientifically. Jay Kadane, a statistician at Carnegie Mellon University in Pittsburgh, doesn't play the game. But he was drawn to the Harvard session by the idea that one could show, statistically, what makes some players better than others. The online poker companies have reams of minute-by-minute data on the decisions and bets of thousands of players, and Mr. Kadane has pitched to potential sponsors a project that would crunch those data in search of proof that poker is a game of skill.

University of Chicago economist Steven Levitt, who co-wrote the best-selling book "Freakonomics," is already in the midst of a similar quest. His project, called Pokernomics, seeks to analyze the electronic data from more than a million hands of Texas Hold 'Em with the goal, he says, "of understanding what makes a person a good or bad poker player." Mr. Levitt, who is doing the project without assistance from the poker industry, has invited players to email in their own electronic data from games on the Internet but wants a minimum of 10,000 hands per player so he can analyze their moves in depth.

In the absence for now of any scientific proof, Prof. Nesson urged the group to come up with more legalistic arguments. Ms. Duke has won more than $3 million in tournament prize money. One sure sign that poker is a skill, she says, is that unlike roulette or the lottery or betting on football, "you can purposely lose at poker if you choose." To lose requires skill, she says -- or at least an ability to affect the outcome.

Her brother offers another proposal, which he suggests might impress a future judge. The "vast majority" of high-betting poker hands, he says, are decided after all players except the winner have folded. So if no one shows his cards, Mr. Lederer says, "can you legally argue that the outcome was determined by luck?"

The poker industry may get lucky anyway. Last week, Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, introduced a bill the poker industry supports to overturn the September ban and regulate online gambling. Democratic Rep. Robert Wexler says he has drafted a more specific bill after being besieged by poker players in his South Florida district. "My bill will say that poker is a skill," he says.

After his strategy session wrapped up, Prof. Nesson led the group to a bar for drinks. He was delighted, he said, at how the group "pushed game theory to the level of metaphor." Sipping a scotch on the rocks, he tossed out the idea of creating a poker university, with himself as one of its teachers. Then, "we could infuse all levels of education with the skills that come from poker," he said.

[TiderInsider]

After his strategy session wrapped up, Prof. Nesson led the group to a bar for drinks. He was delighted, he said, at how the group "pushed game theory to the level of metaphor." Sipping a scotch on the rocks, he tossed out the idea of creating a poker university, with himself as one of its teachers. Then, "we could infuse all levels of education with the skills that come from poker," he said.

Didn't we already come up with a syllabus?

[Juris Doctor]

here's where the debate will get murky...

Even if you can define it as a game of skill...its still gambling. Where is the line between "game of skill" and "game of chance"? Is it in the EV?

What's the difference between a poker player with an EV of -$.02 for every $1 SNG he plays versus a blackjack junkie who is sitting at a $1 table with an EV of -$.02? Is it that he can potentially change his EV to as high as he wants? Clearly a blackjack player playing improperly with an EV of -$.05 could also increase their EV.

So then is the difference between skill and chance the "potential" to increase one's EV above 0? How would one define that? If everyone had that potential, isn't the potential of the whole less than 0 (rake)?

I think this is a noble venture, but it will fall on deaf ears. It will just give those who favor the argument more to argue with, and give those who disagree more to disagree with - but at the end of the day, no opinions will be changed.

[Matty]

The only "game of skill" is one where there's no random element (e.g. chess)

The only "game of chance" is one where it's impossible to alter one's own EV through strategy (e.g. coin flipping).

Anything else is a blend of the two, and it's only a question of how far along the spectrum.

[win diesel]

Get me off to Congress (or whoever needs to be convinced.)

People always look at it from the wrong angle of analyzing the great player. That's tough because then you get into that whole skill vs luck and variance thing.

Simply look at it from the viewpoint of the bad player and how quickly he is guaranteed to lose money.

Theoretically there is the worst player in the world. Calls all ins on the flop drawing dead etc. he is guaranteed to lose money. Put that same player on a real gambling game...craps, roulette etc There is no strategy he can employ that will guarantee he will lose his money. That's the difference.

This is a simple thing to prove, but IMO people make it hard and complicated.

[wooHoo]

see gutshot case in the UK.

[TakeNine]

I can agree that there's a lot of skill to poker, but I still have to call it fundamentally a game of chance. For example, bluffing is such an important skill, but if I'm looking at a royal flush, the world's best poker player couldn't bluff me out. If the cards I need to have the best hand always come my way, then I will win, period.

That said, I'm all in favor of dumping this law and legalizing online gambling of all forms.

[Dr T Non-Fan]

I think even the most skilled poker players require some luck. In a tournament setting, assuming all players are the best players ever, someone's going to get more lucky than the others. So, some amount of luck has to be involved. Maybe it's not a lot. Certainly, the skill is in reading opponents instead of cards. Even that takes some luck, since working out someone else's hand or play involves some probability (depending on the ability of the opponent to hide his hand from his body).

As another example, someone has to have received the best opening hands and best draws. All skills equal, this player has a better chance at winning a tournament.
On the flip side, someone has to have received the most second-best hands. An analogy to this is a game of war, where the battles in which the cards are closest (A vs Q) are more valuable than when they're farther apart (K vs 2). One can extract a lot more chips off a second nut when you have the nuts. That is a lucky occurrence.

One should compare poker with the stock market.
1. Both involve playing "against" someone.
2. Both involve a vig.
3. Both require knowledge, and more is better than less, relative to the "opponent."
4. Both require exerience.
5. Both still require some amount of luck, since rarely the outcome is 100% certain (less rare in poker, its being a much simpler environment).

[Kenshiro]

Originally Posted by win diesel

...Put that same player on a real gambling game...craps, roulette etc There is no strategy he can employ that will guarantee he will lose his money...

That's not true at all.

[WWSituation]

Originally Posted by Kenshiro

That's not true at all.

There is no pit game where one can do anything within the rules of the casino that can alter the house edge.

What did you have in mind?