A GAME OF SKILL OR LUCK?

To the extent that the poker player knows how to make the best decisions in his own interests, he has skill. As ruled in a Kentucky court case reported by Mark Twain in 1870, poker is a game of skill because the players who are more skilled will end up the winners.

The skilled player considers the poker odds in making his decision whether to call a bet, or perhaps to raise. If the bet provides a positive expectation - a return on investment - it is a wise decision. If the odds favor him, he may bet for value. In the long run, that player will come out ahead. His “investment” will be profitable.

The higher the “pot odds” (the reward relative to the risk) compared to the “card odds” (the odds against making the winning hand), the more profitable it will be. That’s a positive expectation! An analogy I present to the poker classes I teach, is that of a successful merchant who buys items to sell in his store: He buys the product at wholesale at the lowest price he can negotiate (the risk); then he later sells it at a profit - the higher the profit, the better - so long as he has the skill to market and sell it.

Science and Poker
Wanted: Information

Like a scientist or engineer solving a problem, a skilled poker player seeks information to help make the best decisions. He considers the cards he has been dealt, those on the board, how the betting has gone, and what kind of players he is opposing. In addition to evaluating his opponents, he looks for “body language” and other “tells” to better compete against his opponent (just as we do in our daily lives when dealing with people).

A little psychology can help. A skilled poker player considers his betting position when making decisions because, in a later position, he has the opportunity to learn how his opponents are betting before his turn to act. And, of course, he gathers and uses the information he needs to be sure he has a positive expectation before investing any more of his money.

What About Luck?

Luck is the chance - the likelihood - of an event occurring at this time. On the other hand, probability is chance over a long period of time. Tossing a coin, the probability of it landing with a “head” up is 50%. But, right now you might flip 10 “heads” in a row. That’s luck. But, in the long run, there will be equal numbers of “heads” and “tails.” That’s probability. A skilled poker player, whether or not he acknowledges it, uses probability to make his decisions - and hence to be a WINNER! in the long run.

Luck is something over which we have little control. But a good businessman or a skilled poker player can make decisions that will skew luck in his favor.

‘I’m a great believer in luck. I find the harder I work, the more I have of it.’ - Stephen Leacock

Rules for Winning

Being an engineer, when I wrote my first poker book, I developed a series of Four Basic Rules for Winning at the Game of Poker. I guarantee that you will be a winner in the long run if you follow these rules. You won’t win every time because there is the element of luck.

These rules have to do with setting goals and money management; game, table, and seat selection; focusing on the game to gain the most information available; and carefully selecting the hands in which you “invest” your chips. That certainly doesn’t sound like gambling, does it? And to help make it less stressful in deciding which hands to play - whether or not you should invest your chips, an algorithm (my second book) was developed that provides an easy-to-remember formula. The easier it is to make a decision, the better decisions you will make. Is that gambling or investing?

In Summary

Based on the most common definition of “gambling” as risking something of value on an uncertain outcome to gain a reward, many activities in life are “gambles.” We should consider the degree of risk relative to the value of the potential reward. The key elements in being a winner at the game of poker - and in life - are (1) the opportunity to make decisions - allowing the player to be in control over his destiny; and (2) developing the skills to seek and gain important information and to use it to make the best decisions - thereby minimizing the risk and maximizing the reward. That’s what a successful businessman does; and that’s what a good poker player does. That’s betting (investing) when you can expect a long-term positive return on your investment, albeit there is risk involved. This applies to the game of poker. . . And, just like competing in a sporting event, it does require skill to be a WINNER! Good Luck. . .