Before I get to my main point in this entry, I want to put forth some statements that I'm hoping you'll agree with to get you into the right frame of mind:
I think it's safe to say that everyone would agree most sports involve skill. There are sometimes very clear distinctions between a great player/team and a merely OK player/team. However, in any given game, the great team can be defeated by the merely OK team. This does not mean that the lesser team is now better than the superior team, it simply means that the lesser team had a good day/got lucky, or the better team had a bad day/got unlucky -- or both. If these teams played 1,000 games, the better team would win the majority of the time, but it would likely not win 100% of the time.
As an example, in this year's March Madness NCAA basketball tournament, Butler started as a No. 5 seeded team, yet on its way to the finals, Butler defeated No. 1 seeded Syracuse and No. 2 seeded Kansas State. Does that mean Butler is a better team than both Syracuse and Kansas State? For those two games, yes, Butler was. If this tournament bracket played out 1,000 times, though, would you put money on Butler defeating Syracuse and Kansas State the majority of the time? I sincerely doubt most of you would, even with the knowledge of what happened this year.
Now let's jump to the stock market. Let's say I put $10,000 into a bunch of penny stocks for a 24-hour period with little or no research on the individual companies in an attempt to quickly make money. Would you consider that investing or gambling?
Now let's say I took that same $10,000 and spent a week researching stocks and asking friends/family/financial experts how best to put it into the stock market to save for my retirement. Would that be investing or gambling?
In both cases, I'm putting money into the stock market with the ultimate goal of increasing my funds, but most would consider the two methods to be radically different. The first scenario is pretty obviously gambling -- it's akin to putting all of your money on black at a roulette wheel -- and yet it is perfectly legal to do that with your money. The second scenario is clearly smart investing, is also perfectly legal, and is akin to ... well, poker.
Poker is a Skill Game
So, I suppose that brings me to my main point. I'm frankly fed up with uneducated, narrow-minded politicians, lobbyist groups, and the uninformed general public lumping poker into generic gambling categories. This lumping has caused some states to make it illegal to play online, illegal to play real-money home games, and so on. However, many of these same states allow lotteries -- which are pure gambling -- and all states allow you to gamble on the stock market.
Poker and the Stock Market
I've always liked the stock market analogy for poker. I could play poker like a gambler, just like I could play the stock market like a gambler. But it's a logical fallacy to say that just because one can gamble when playing poker that everyone who plays poker is gambling. That's like saying that just because someone can lose all of their money day-trading penny stocks that everyone who puts money into the stock market is a gambler.
Now, that isn't to say that there aren't risks in both poker and the stock market. I could do a bunch of research and spread my investments out across various indexes, company types, mutual funds, and so on, and yet still lose money. However, if I'm investing smartly, my risk of financial ruin is small, and my risk of long-term profit is quite high. Poker is the same; if you invest time in studying the game, gaining experience, and otherwise improving your play, you very likely can be a long-term winner.
In both cases, it's all about taking calculated risks. I've been playing poker for more than five years now, and I'm a consistent winner. My profits chart is below, spanning about five years of tracking on the CardPlayer.com Poker Stats Tracker. (See if you can guess whether I focus on cash games or tournament, haha.)
But it's not just me. Pretty much all of my friends are seasoned, experienced poker players with true passion for continuously improving their games. And guess what? The vast majority of them are long-term winning players.
Poker and Sports
A lot of people don't like calling poker a sport, or even comparing the game to sports. I actually agree -- poker is not a sport any more than chess is a sport. However, thinking about sports can help put some misconceptions about poker into perspective. In the sports statement with which I opened this blog, I hope I made it clear that better players will win in the long run, but they can lose on any given day. Play one game and a better team can lose to a worse team, but play 1,000 games and the better team will win more than 50% of the time.
Poker is much the same, but admittedly the edge that a good player has over a bad player is much smaller than it is in most sports, and it thus takes a larger sample size to see a distinct difference. Given a large enough sample size of hands/tournaments played, a good poker player will always rise to the top, but in a single hand, or a single day of playing cash games, or a single tournament, a good player could do very poorly and a bad player can do amazingly well.
To paraphrase one of my favorite quotes regarding this topic (I believe it comes from poker pro Dan Harrington, who wrote three indispensable poker books on tournament poker): A poker tournament is like a lottery in that anyone can win. The difference is that for the same $1 that gets most people a single lottery ticket, a winning player can get three tickets or more.
Poker and Casino Games
I tell people that I play poker semi-professionally. When they refer to me as a "Professional Gambler," I cringe -- big time. I cringe for two reasons: 1) I hate gambling, and I don't do it. Slots, craps, roulette ... they all bore the crap out of me because I have no real way to influence the result. Plus, I'm playing against the house, so I'm obviously a favorite to lose any given bet. Why would I do that to myself? No, I'm not a professional gambler. 2) I know that if they consider poker gambling, they don't know very much about poker, and their eyes would just glaze over if I even attempted to explain it to them ...
In traditional casino games, you're playing against the house (casino), and the house is smart enough only to play against you in games wherein it has an edge. When you play slot machines, every dollar you put into the machine pays you back $0.9999 or less over the long run, I guarantee it. You never have an edge over the house.
In poker, you aren't playing against the house. The house has absolutely zero interest in whether or not you win a hand -- they get to rake in a percentage of the pot whether you win it or someone else does. You are not playing against the house, you're playing against other players. Can you have an edge over other players? Of course you can. You can make them fold the best hand by bluffing, or you can play better hands in better situations than they do. You maximize your profits and minimize your losses, all while trying to induce them to make mistakes and maximize their losses to you.
Can You Lose on Purpose? The Annie Duke Argument
Annie Duke took another approach to the argument against poker being your typical casino game. (She attributes the argument to David Sklansky and her brother Howard Lederer.) Her argument goes a little something like this: Can you purposefully lose when you play slots or craps or roulette? Can you purposefully lose when you play poker?
The argument implies that with pure-chance casino games, nothing you do can in any way affect whether you win or lose -- you couldn't lose if you tried. With poker, you could lose every single cash game or tournament you played in very easily. I can fold every single hand throughout an entire tournament and I would eventually lose. FYI, I found this argument on the excellent Freakonomics blog at The New York Times website.
(Notice that blackjack is interestingly nestled in between: you play against the house, but you could purposefully lose most hands by hitting until you bust, unless you get "unlucky" enough to hit 21. However, if you can count cards well, you can have an edge over the house and actually be a long-term winning blackjack player. That's why they keep a very close eye on blackjack tables and kick out anyone they think may be counting cards.)
A Poker Study
But don't take my word for it. There's even a study that was done recently that took the data from 103 million hands of poker played by hundreds of thousands of poker players on PokerStars. The poker study [Scribd document of the entire study] revealed some interesting facts:
- 75.7% of hands played never went to showdown. So, in essence, the actual cards that player held were ultimately less relevant than the betting players did more than 3/4 of the time.
- Of the 24.3% of hands that did go to showdown, the best hand at the table (of every hand dealt to every player, including those folded) won 50.3% of the time. What this means is that half of the time the hand that wins at showdown is not that hand that would have won had every player taken their hand to showdown. In other words, even in the minority of hands that reach showdown, betting has caused what would have been the best hand to fold before showdown.
- When considering every hand dealt, folded or otherwise, the best hand went to showdown and won the pot just 12% of the time.
- Cigital, the firm that conducted the study, came to the conclusion that the above data show that poker is 88% skill.
Anyway, you get my point. Plenty of incredibly smart, logical people make or try to make a living playing poker. The same can't be said about slot machines, craps, or roulette. Poker is very clearly a game dependent upon skill. The edges may be small in some cases -- like in some large buy-in tournament or in high-stakes cash games -- but in the vast majority of situations, it is easy to have a distinct advantage over the opposition in a game of poker.
There, I'm done with my rant, and I've gotten it out of my system. Hilarity will ensue in my next few blogs...