It’s All a Gamble

This is the 35th installment of my fortnightly poker column in the Economic Times, Range Rover.

Some people, when I tell them I play poker, look at me kind of strange. They may not say it, but inside their heads they’re saying, ‘OMG, he’s a gambler!’ And because I am skilled at getting inside people’s heads and listening to them think, inside my head I’m sayin’, ‘Yeah, and guess what, OMG OMG, you’re a gambler too!’

What is it that gamblers do? They weigh up the odds of a particular situation or event, the risk-to-reward ratio, and make a bet. This is not something that just happens inside casinos; this is the stuff of life.

You walk up to someone you fancy and ask them out for a date: you are gambling. You buy a stock: you’re betting on it to go up. You sell a stock: you’re betting on it to go down. You buy real estate: gamble. You buy a book because you like the blurb and the cover is amazing: ditto.

Little in life is certain, and everything is scarce, because time itself is scarce. You have one life, and the smallest decision you take today could change the course of your life. Maybe you have to choose between the PHD abroad or the comfortable job at home. Maybe you have to decide whether to say ‘yes’ to your boyfriend’s proposal when you know he’s not the dream guy, and you’re settling, and he hit you once when he was angry, but who knows if you’ll ever do better because you’re chubby, and you do love him sometimes. Maybe you get a puppy, betting that the love you get for a decade or so will be worth the pain you feel when it dies, as is inevitable. Everything you do, big or trivial, may be worth it, or it may be a mistake. And the thing with real life is, you’ll never know where the road not taken would have led. But you have to gamble; you have to choose.

Poker is slightly different. Poker is also gambling but it involves repeated small decisions with relatively little on the line on any particular occasion. And importantly, you get to put in volume. Even though luck plays a greater role in poker than in other sports or mindgames, it is not gambling gambling: if you’re skillful, you will eventually make a profit. Good poker players keep making, on average, profitable decisions, and though luck (or variance, as we grizzled vets call it) may hit them hard in the short run, in the long run they will end up winners. In life, on the other hand, as Keynes said, in the long run we’re dead.

A poker player can play a million hands or 20,000 tournaments, and those sample sizes are pretty good. You don’t get those in real life. How many times will you enter a romantic relationship? How often can you switch jobs? You get the drift.

There are different types of gambling. There are casino games like roulette, baccarat and craps in which, in the long run, you’re guaranteed to lose. I disapprove of playing those; it’s just giving money away. Then there’s life itself. You’re forced to gamble by circumstance, but it’s okay, life’s a positive-sum game; though one could argue that since we all die in the end, the final sum is zero. At least until then the odds aren’t weighed against you. And then there’s poker, in which, unlike in life, we can put in volume and bring the long run close. So, you, who do not play poker, don’t make fun of us and call us gamblers. All of us are born in a casino, and will die in one.

Deep Thought

This is the 34th installment of my fortnightly poker column in the Economic Times, Range Rover.

I discovered poker as a grown adult approaching middle age, but I was a hustler in college as well. I was a decent chess player, and used to offer a prop bet to people with the following terms: ‘I will play 10 games with you, and will win all ten. If you even draw one, you win the bet.’ I never made this bet with anyone I’d seen on the circuit, thus guaranteeing that all my customers were patzers, and unlike in poker, the quantum of luck in chess is low enough that I won this bet every time I made it. One of my early victims, dazzled by my magisterial play, asked me what the difference between me and him was. ‘How many moves ahead do you think?’ he asked. ‘The same as you,’ I replied.

A famous study by Adriaan de Groot published in 1946 showed that, contrary to what you might expect, novices and expert players think more or less the same number of moves ahead. The difference in quality arises because the experts think the right moves ahead. Their candidate moves for analysis, in other words, are better moves to begin with. Their skill lies not in depth of analysis, but in understanding the nature of a position, which, in turn, comes from better pattern recognition. A grandmaster will look at a position not as a conglomeration of individual pieces, but in chunks of pieces that form recognisable patterns. He will understand the positional vulnerabilities of different kinds of patterns, and the tactical motifs that recur in these spots. In a spot where a novice thinks ‘If I threaten this piece, he’ll move it here to counter me,’ the grandmaster may think, ‘His pawn structure has weakened his dark squares, let me exploit that weakness and exchange off my weak white-squared bishop for his strong knight on c6.’ Guess who is more likely to win.

Why do I write about chess in a poker column? Well, there is exactly the same difference between beginning poker players and experienced ones. Beginners think in terms of what hand they have and how it connects with the board, and graduate to this from thinking about their opponent’s hand, and from there to considering what hand the opponent puts them on. But good players think not in terms of hands but ranges. They never ask, in any spot, ‘Am I ahead here?’ but ‘What is my equity here?’ and ‘How can I maximise my EV?’ They have a better sense of how specific ranges interact with different board textures, and can plan for future streets.

For example, let’s say you call with KJ on the button after a nit raises UTG, and the flop comes 876 two-tone. A beginner may give up when the nit c-bets, but a pro will usually continue in the hand and take down the pot with either immediate or future aggression, because the flop texture is terrible for the UTG’s range of big pairs and high cards, and most turns and rivers are bad for him. Indeed, this will be practically a reflexive decision for the pro, requiring no thinking at all. He would play this hand better than the novice not because his reads are better or he has a better poker face or suchlike, but because he understands the underlying math better.

Here’s one thing common to both chess and poker: the bad player does not know what he does not know. So here’s a tip on how to get better at both games: play a hell of a lot, and stay humble. The day you stop learning, you will be the fish at the table.

Poker at Lake Wobegon

This is the 33rd installment of my fortnightly poker column in the Economic Times, Range Rover.

One of the ironies of poker is that at a nine-handed poker table, all nine players believe that they are profitable, if not the best player at the table. This obviously cannot be the case. Poker is a negative-sum game: the rake takes a percentage of each pot or tournament, and winners win less than what losers lose. Also, easily more than 90% of players are long-term losers, and most of the winners are just marginal winners. So what’s going on here?

I have two answers for you: 1. The nature of poker as a game. 2. Human nature itself. Let’s get the easy one out of the way.

Every game contains differing elements of luck, and although poker is unquestionably a game of skill, the quantum of luck in it is far higher than in other games. A winning player’s edge translates into a profit only in the long-term. Over a short span of time, it is difficult to tell from results who is the fish and who the shark. Losers win their fair share of pots and tournaments, which fosters the belief that they are better than they really are. But their flawed self-assessment is a consequence not just of the nature of poker, but of human nature itself.

A few decades ago, the writer Garrison Keillor created a fictional town named Lake Wobegon, where, he wrote, “all the women are strong, all the men are good looking, and all the children are above average.” This gave its name to the Lake Wobegon Effect, also known as Illusory Superiority, a tendency humans have of overestimating their abilities. This tendency crops ups across contexts: in studies, people have been known to overestimate their driving skills (everyone can’t be above average) and terminally ill cancer patients have also, poignantly, overestimated their chances of survival.

You will see the Lake Wobegon Effect in poker, as also its sister, the Dunning-Kruger Effect. Wikipedia defines the Dunning-Kruger Effect as ‘a cognitive bias wherein unskilled individuals suffer from illusory superiority, mistakenly rating their ability much higher than is accurate. This bias is attributed to a metacognitive inability of the unskilled to recognize their ineptitude.’

In the context of poker, a player may think he is better than he is because he lacks understanding of the game, or the intellectual tools to perceive his own weaknesses. I see this around me in many players. They don’t understand the long-term nature of the game, focus only on their own hand and don’t think in terms of ranges or equities, are results-oriented rather than process-oriented, and consider pots they win to be a validation of their skill while attributing their losses to bad luck. Some of these guys avoid putting in the hard work to get better, and rationalise this sloth; some of them are simply not capable of improving. This is not a defect in character any more than being human is.

How can you guard against the Lake Wobegon Effect and the Dunning-Kruger Effect in yourself? Here are two things you can do. One, always ask yourself what your edge is in any game you go to. If you can’t define this precisely in terms of how you are exploiting the specific weaknesses of others, you don’t have an edge. Two, keep track of all your scores, and see how much money you make over a decent sample size of sessions. Your brain might deceive you—but the numbers won’t lie.

The Myth of the Made Hand

This is the 32nd installment of my fortnightly poker column in the Economic Times, Range Rover.

There is no term in poker that is as dangerous for the novice player as ‘made hand.’ Newcomers to poker divide all hands into two categories: made hands and drawing hands. If they have hit a pair or better, they say they have a made hand. If they are drawing to a flush or a straight, they call it a drawing hand. This is a terrible way to think about poker, especially when it informs your decision-making. For example, some players I know find it hard to fold a made hand, and never raise with a drawing hand because they ‘haven’t gotten there yet.’ This is fundamentally flawed thinking.

To explain myself, let me present a couple of axioms to you.

One: Every Drawing Hand is a Made Hand: There is one term that should dominate your thinking all through the course of a hand: equity. On any street except the river, equity refers to your share of the pot if every possible combination of outcomes was accounted for. Beginners think of a made hand as one that is 100% there, and a drawing hand as one that isn’t there yet. But if you look at equities, most of the time a made hand just has a big share of the pot, and is sometimes even behind the drawing hand. Consider, for example, that on a board of A67 with the 67 being spades, 89ss will win a pot against AK 52.6% of the time. Which is the made hand, then? What does the term, ‘made hand’ even mean? How much equity does a hand need to qualify as a made hand?

If 89ss has more equity there than AK, is 89ss a made hand? If not, why is AK, which has less equity? Where do you draw the line? At AsTs, pair and flush draw (46% against AK)?  QJss, the bare flush draw (32%)? The gutty T8 (22%)? What about AQ (16%), an otherwise fine ‘made hand’ that is a ‘drawing hand’ against AK because there’s a better ‘made hand’ around. Consider, in fact, that AQ, which is 16% against AK, is 83% against AJ and 55% against a range of all sets, Ax hands, and plausible flush and straight draws. So how would you classify it?

Two: Every Made Hand is a Drawing Hand: Unless your opponent is drawing dead after you flop a royal flush or quads, every made hand is a drawing hand in the sense that it is drawing to bricks. Not just that, on the flop, against a drawing hand, it is drawing to runner-runner bricks. This is why AK is behind 89ss on that Ax6s7s flop. This is why, in PLO, a hand like AK45r is so shitty on a 367 two-tone board. You have flopped the nuts – the ultimate made hand, one would think –  but if you’re up against two guys, and one has a higher wrap-FD (T985ds) and the other has top set with backdoor FD, your equity in the hand is, sit down before you read this, 7.5%. That’s right, you flop the nuts, go all in joyfully, and win just 1 in 13 times because your runner-runner brick draw is just so unlikely. Your best made hand is actually the worst drawing hand here.

Made hands, drawing hands, these terms melt into one another and mean nothing anyway. When you play poker, you should think of nothing but equity. Whether you have 80% equity on the flop, or 49% or 23%, your aim is to have 100% by the time the hand ends. Sometimes you do this at showdown – but a lot of the time, you do this by making the other guy fold, so that his share of the pot becomes yours. To do this, you need to understand his range, your equity against his range, and your fold equity against him (ie, how likely he is to fold to your aggression). As James Hetfield famously said after a 22-hour cash-game session, nothing else matters.

Turn it into a Bluff

This is the 31st installment of my fortnightly poker column in the Economic Times, Range Rover.

I played an interesting hand the other day that I would have played differently three years ago. The game was nine-handed, stacks were deep, and I had KTdd on the button. A loose player raised UTG +1, MP2 called, cutoff called, I called on the button and the blinds called. The flop came K72 with two spades and a club. (The king was a spade.) Original raiser checked, MP2 bet, cutoff folded, I called, small blind overcalled, the others folded. Both MP2 and SB are straightforward players, and MP2 check-calls flush draws in this spot, so he certainly had at least a King. Given position and his bet in a multiway pot, he probably a stronger king than mine. SB’s overcall disappointed me, because he is not the kind to mess around here with A7 or 99, and had either a king here or a flush draw. And if he had a king, it had to be stronger than mine.

The turn was the ace of spades. The flush got there, as did an overcard to the king. Both of them checked. At this point, the novice in me from three years ago would have checked back, thinking I had showdown value. But my read here was that my hand simply could not be good against both these guys, and I needed to turn it into a bluff to win the pot. I bet big, and they both folded, saying that they had KQ, and MP2 whined about how I always get lucky on the turn. So of course I showed him my hand, putting him on tilt, and he later stacked off to me. Yum yum.

Well, here’s one of the most useful lessons I learnt through my journey in poker: showdown value is overrated. Too often, we take a passive line with medium-strength hands thinking we have showdown value, so why inflate the pot? But there are two circumstances where it might be profitable to take a different approach. One, when we can bet those hands for thin value and get called by worse often enough for it to be profitable. Two, when we can turn it into a bluff and profitably make better hands fold, like in the above instance.

Often, on an early street, we adopt a particular mindset for a hand and don’t modify it as the hand progresses. For example, we get into pot-control or bluff-catcher mode on the flop, where that might indeed be justified, but fail to shift gears on a later street when it becomes profitable to do so. There are all kinds of situations where it makes sense to turn our made hand into a bluff. Maybe we 3b in position with JTs, the flop comes QJ3r, we call a donk bet, turn K, call again, river T and villain checks. Our two pair is often beat here, and better hands can fold given we are plausibly repping the ace, and depending on the opponent it is sometimes correct to check back and often correct to bomb river. Similarly, in PLO, we could bang the river when a flush completes to get a straight to fold, even though we have showdown value with a set that didn’t fill up.

That said, you should be clear about your reasons in turning a made hand into a bluff, and not do so just because raising makes you feel macho. In the live games I play, I often see players make testosterone-laden raises in spots where no better hand folds and no worse hand calls. Do not burn money in this manner. Remember, it is better to be rich than manly.

The Bird and the Elephant

This is the 30th installment of my fortnightly poker column in the Economic Times, Range Rover.

One of the most important skills for a professional poker player, it is often said, is knowing when to get up. When exactly should we quit a session? Should we have a stop loss? Should we get up as soon as we reach a pre-decided profit? Should we play X number of hours, no more, no less? What are the factors that determine how long we sit at a particular table?

The rational answer to this is clear. We should continue in a game as long as it is +ev to do so, and get up as soon as we feel we’re no longer profitable on the table. How much we are up and down should not matter. We need to think of all poker games we play as being essentially one lifelong session, and the score on any one day should not affect our decision. At any given point, all we need to ask ourselves is: Is my staying on this table a +ev decision? Whether you are stuck 3 buyins or up 4 should not be a factor in that decision.

In practice, this advice is not that easy to carry out. For example, I have a tilt problem, and shift from my A-game to my C-game if I’m losing a lot and fatigued, playing recklessly and trying to recover. Tilt has perfect timing and usually comes towards the end of sessions, when stacks are deep and mistakes are costly. I am obviously not +ev when I tilt – but tilt not only shatters my emotional equilbrium, it also affects my judgement. I rationalise continuing in the game, though I really should be getting up.

To prevent this, I have set a stop-loss for myself. When I hit that stop-loss, I quit the game, regardless of how calm I feel, because tilt could be just around the corner. This is not something I recommend to you if tilt is not a factor in your play, and you make decisions with as much clarity 15 hours into a game and 10 buyins down as you do at the start of the session. But how many of us can manage that? If you do have a tilt issue, and tend to magnify your losses by chasing them, a stop-loss might be a handy tool.

When I am winning, on the other hand, I usually sit till the end of the session. There was a time when, at a particular game, I would play for six hours every day and then leave, because I’d begin to get tired. As I’d mostly win, I got a bit of a reputation for hitting and running, though this was not my intent. So, as a point of principle, I started sitting till the end of every session, and realised that this made a lot of sense because stacks are deepest at the tail end of sessions, many other players are tired and tilted and more prone to errors, and that is when my edge can really turn a hefty profit. If fatigue affects your play, of course, you should factor that in and leave before your edge dissipates and you’re the fish on the table. But tilt and fatigue aside, there are no good reasons to quit a juicy game.

One big mistake I see some players make is win small and lose big. They become taala-chaabi and book their profit as soon as they’re one or two buyins up, but continue buying in when they’re down, trying desperately to recover, and lose far more than they win in a winning session. In his book, Elements of Poker, Tommy Angelo quoted a friend of his named Cowboy Bill as describing one such player, ‘He eats like a bird and shits like an elephant.’ Make sure you do it the other way around.

The Cigarette Case

This is the 29th installment of my fortnightly poker column in the Economic Times, Range Rover.

One of my favourite stories about chess has a lesson in it for poker players. A few decades ago, the great Aron Nimzowitsch was playing in a chess tournament when his opponent took out a cigarette case and placed it on the table in front of him. Nimzowitsch, who couldn’t stand cigarette smoke, called the tournament director to complain.

‘He has not lit a cigarette and there is no smoke,’ said the TD. ‘So your complaint is noted, but it is not valid.’

‘I know,’ replied Nimzowitsch, ‘but he threatens to smoke, and you know as well as I do that in chess the threat is often stronger than the execution.’

In poker, too, the threat is stronger than the execution. The most obvious example of this this is the concept of Leverage. Let’s say you open from late position with KJs to 4bb. The button calls, with effective stacks of 150bb. The flop is a dry K74r. You bet 5.5bb into 9.5, your opponent raises to 16. You call. The turn is a Q. You check. Your opponent bets 30 into 41.5. What do you do here?

Unless your opponent is super-spazzy, it’s hard to continue. If this bet closed the action, you might consider calling this 30bb bet – but it doesn’t. This bet carries the threat of a further bet that involves the rest of your stack: 100bb more into a pot of 101.5. So you don’t just have to decide whether to commit 30bb more, but 130bb more. You are unlikely to want to play for stacks with just a single pair.

This is leverage: the threat of future bets in a pot that is growing exponentially bigger. In the above example, your opponent bet 30bb to put you at a decision for 130bb. Maybe had you called 30bb on the turn, he would have checked back the river, giving up on some random bluff he was trying. But maybe he wouldn’t have. It doesn’t matter whether or not he would have lit that cigarette – the cigarette case was on the table.

Leverage can apply at any street except the river, of course. A 3b from a good aggressive player in position who is likely to keep barrelling postflop. A check-raise on the flop. Most of the time, though, you really feel leverage on the turn, when pots are getting big, stack-to-pot ratios are dwindling, and you have to decide how far you want to go in a hand. In the deep-stacked games that I play, I have found that it is on the turn that players make the biggest mistakes: whether that involves calling, folding or just going nuts and spazzing.

The threat you represent does not even have to be a result of your betting in a particular hand; it can arise out of your reputation. If you have a reputation for check-raising rivers a lot, your opponents might give you easy showdowns in position. If the turn check-raise is known to be a part of your arsenal, your opponents, in position, might not bet for thin value or charge you to draw on the turn like they otherwise would. Of course, your threats have to be credible, and against thinking players, your ranges should be somewhat balanced. If every check-raise of yours on the river is with the nuts, then your opponent will know that he is not making a mistake by bet-folding there for thin value. You need to mix it up to induce errors. You want your opponent to throw his hands up and say, ‘Yeh kya khelta hai? Main tho baukhla gaya hoon?’

The bottomline: to constantly pose a threat to your opponents, and to thus unsettle them and induce mistakes, you have to be aggressive. A study a few years ago looked into 103 million hands on Pokerstars and found that more than 75% of them never reached showdown. Think about what this means – and put that cigarette case to use.

The Importance of Profiling

This is the 28th installment of my fortnightly poker column in the Economic Times, Range Rover.

Poker at its heart is mathematical, I often argue, and everything else is secondary. You put your opponent on a range, calculate your pot equity against that range, estimate fold equity and then make the most profitable decision. But the math will get you nowhere if you input the wrong values. You first have to put your opponent on the correct range. And you have to accurately estimate your fold equity against him. To do this, you need to get inside his head, you need psychology. Although psychology without math is directionless, math without psychology is pointless, as you’ll end up with the wrong numbers.

This doesn’t apply if you’re playing Game Theory Optimal (GTO), of course, where your opponent’s tendencies are irrelevant as long as you’re playing balanced ranges, and the math is all that matters. But you’ll only ever need to play GTO at the highest levels of online cash games. In your everyday poker life, you’re best served playing exploitable poker, looking to make money from your opponents’ mistakes and avoiding making too many yourself. Player profiling is hugely important in this context. The better your powers of observation, recall and inference, the more money you will make in the game.

I’ve been running very good recently at a local online game, where PLO is all the rage. The key to my winnings is taking copious notes on every opponent I play. I note down practically every significant thing I see any opponent do. Every time I identify a tendency – any tendency – in an opponent’s play, I’ve caught a weakness I can exploit.

For example, Player A always bets pot on the river when he’s bluffing and 2/3 pot when he’s betting for value.  Player B almost always calls one barrel and almost never the second. Player C loves to float out of position with air and will donk-pot the turn if any scare card hits or any draw completes, and will barrel ¾ on the river if called. Player D goes pot-pot-pot when you check to him because he thinks you must be weak and who cares what he’s repping, maybe he’s not even looking at the board. Player E pot controls too much and never bets for thin value, even checks K-high backdoor flush on an unpaired board on the river, which polarises his range when he does make a river bet, and makes your decisions that much easier.

Once you start identifying these tendencies, they become easy to exploit. Against Player A, I once called a pot-sized river bet with 8766ss on a board of T94TA (two-tone on flop but flush not completing) and my sixes were good. I usually double-barrel against Player B, which is an insanely profitable play because of his warped frequencies.  Players C and D increase the variance of the game, but give you tons of value as long as you don’t get tempted to call them down too thin, which can be a leak in itself. And I make thinner river calls against Player E than against others, because while he may be polarised, he definitely isn’t balanced.

The last month has been unusual for me: my bread-and-butter game is live NLHE, where, again, profiling is everything, and most players don’t do it assiduously enough. The biggest mistake a live player can make is to switch off after he has folded a hand, and not keep observing the action and making mental notes. In poker, every nugget of information counts, so I’d advise you to always stay tuned in during a game. Remember, the most profitable seat at a poker table is inside your opponents’ heads.

The Endowment Effect

This is the 27th installment of my fortnightly poker column in the Economic Times, Range Rover.

There’s something strange that happens to me quite frequently. A friend will ask me for advice on a hand, and I’ll dispassionately tell him what I think is the correct course of action, and the reasons why. For example, while playing PLO he calls a raise in a 3-way pot from the big blind with 9876ds, with spades and hearts, and the flop comes JT2 with two spades and a heart, for a wrap and flush draw. My friend, huffing and puffing with excitement, bets, the next guy repots, the third guy further repots all in. What is my friend to do? It’s an easy fold, I say, because while he has a universe of outs, none of them make him the nuts. With so much action, the likely range of hands he’s up against include higher wraps and flush draws (like AKQ9ds), as well as sets, and against this range he’s crushed like Yokozuna sat on him. ‘Easy fold, you shouldn’t shame yourself by even thinking about it,’ I say, all clear and rational. And yet, I have found that while I give sound advice as an uninvolved observer, I do some incredibly stupid things when I myself am in a hand, especially when it comes to not folding. It’s like Amit the Player and Amit the Poker Thinker are two separate people. Why is this so?

Part of the reason, of course, is that we’re human, and humans crave action and dopamine, and that makes us rationalise doing silly things. Also, our brains are wired in a way that makes us reluctant to fold a hand – any hand. To be specific, we suffer from what behavioural economists term ‘The Endowment Effect.’

The term, first coined by the economist Richard Thaler in 1980, refers to the phenomenon where we value something we own more than we would if we did not own it. For example, in a 1984 study by Jack Knetsch and JA Sinden, participants were randomly given either a lottery ticket or US$ 2. After a while, they were given the option to trade their ticket for the money or the other way around. Most of them refused the switch, having come to value their randomly allotted gift more than the alternative. A famous 1990 study by Daniel Kahneman, Knetsch and Thaler offered a similar demonstration. In Kahneman’s words: “Mugs were distributed randomly to half the participants. The Sellers had their mug in front of them, and the Buyers were invited to look at their neighbour’s mug: all indicated the price at which they would trade. […] The results were dramatic: the average selling price was about double the average buying price.”

You can see illustrations of this all around you. Ask anyone which car to buy and they’ll recommend the model they own. I suspect that many Apple fans who rave about iPhones and diss Android are displaying the Endowment Effect – besides rationalising and validating their own purchasing decisions, of course. (Vice versa also, though I use Android and it really is better.) I have seen it at the poker table when, after the cards are dealt, a player absent-mindedly reaches out for his neighbour’s cards. Nonononono, goes the neighbour, those are mine, thereby displaying an irrational attachment to them even though the distribution is random and he doesn’t even know what they are yet.

More commonly, you see the Endowment Effect in action when a player, to use an old cliché, ‘gets married to his hand’. The most common leak in the world of poker, by far, is that people don’t fold enough. This is understandable; we’re programmed not to let go. That is our endowment –  and we must fight it.

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For more of my poker columns, do check out the Range Rover archives.

The Tournament Lottery

This is the 26th installment of my now fortnightly poker column in the Economic Times, Range Rover.

I write these words at the end of a three-week period in which 100,000 dreams have been crushed. The World Championship of Online Poker (WCOOP), a three-week festival of poker on Pokerstars, has drawn to a close. It featured 66 tournaments, with a total prize pool of almost US$62 million. The Main Event, which just got over, had a buyin of US$5200, with the winner getting US$1.3 million. That’s a cool Rs 8 crore. It’s the stuff of dreams – but most of the over 120,000 people who played the WCOOP were net losers. Just a handful of people won big.

The poker boom was kickstarted 11 years ago when Chris Moneymaker won the World Series of Poker (WSOP) Main Event in Las Vegas for US$2.5 million. He’d won his way into the tournament via an online US$39 satellite, and this fairy-tale story riveted the world. Combined with a glut of televised poker tournaments, like the World Poker Tour, featuring hole cards and taking viewers straight into the heart of the action, it led to poker becoming one of the most popular games on the planet. Online poker exploded, home games sprouted up in every city in the world, and millions of people play the game today. The common dream: to finish first in one of the marquee events, like the WSOP or WCOOP main events, and make lifechanging money. (The WSOP main event winner this year gets a cool US$10 million.)

Beginning players tend to be more drawn to tournaments than cash games, despite the success of the cash game show High Stakes Poker. I usually advise recreational players to play mainly tournaments, because this restricts their possible losses while allowing them to indulge in the game they love. And I advise serious students of the game to study cash games, which require greater skill because of deeper stacks, and also feature less variance. Indeed, variance is the key reason why playing professional tournament poker is a hazardous line of work. Tourney variance is off the charts.

To begin with, the rake in a tourney is between 7% to 10%, which accumulates over time and bleeds you dry. Around 15% of the players make it to the money (and top players cash around 15% of the time), but the big money only starts at the final table, and especially the top 3. Winning a tourney has even been described as the biggest bad beat in poker, because you outlast every other player who played but just get between 15% to 25% of the money. And no matter how skillful you are, to go deep in a field of 1000 people requires a lot of luck: winning more flips than is your due, evading coolers, hitting cards at the right time, again and again and again. If you have an edge that’s big enough to beat the rake, it only manifests itself in the long term. Indeed, a sample size required to accurately judge a player’s skill could run into the tens of thousands of tournaments.
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The modus operandi of the online tourney pro is to put in volume to counter the variance and bring the long run closer. (Note that live players simply cannot put in meaningful volume.) The typical rhythm of a tourney player’s life is to lose a lot, get a big score, rinse and repeat. And when those scores don’t come, they go broke. This is also why most pros are part of large staking stables. Collectively, the greater the volume, the more likely those big scores become.

Many of my friends are tourney grinders, and it’s a frustrating life. Unlike for cash game pros, most sessions are losing sessions. With relatively shallow stacks, everything is standard, and most pros play the same way. Once you reach a certain level of competence, you just sit and wait to get lucky. Every tournament, seen on its own, is a lottery. And the wheel, it spins round and round.

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For more of my poker columns, do check out the Range Rover archives.