THE NATURE of POKER

 

Poker is a complex game and before we can discuss some of the crooked aspects of the game we first have to understand all the fundamentals.

First thing we have to understand is that poker is not just a game, it is a family of games. The most basic of all poker games is 5-Card Draw - a game that is rarely played nowadays. But 5-Card Draw is still at the root of the poker family tree. The other very basic variant of poker is 5-Card Stud, which is the game that was featured in the 1965 classic poker film The Cincinnati Kid.

Both of the afore mentioned games used to be quite popular, but then the interest for 5-Card Stud slowly faded in favor of its cousin 7-Card Stud (whihc is often just called "Stud"). But of course, we also have to take into acount different trends in different geographical areas. In New York poker players favored 7-Card Stud, in many of the underground poker rooms that could be found throughout the big city. In the cardrooms of Gardena, California, however, people were playing 5-Card Stud, Lowball and some other vsariations that were permitted by law. But in Las Vegas, the gambling capital of the world, Texas Hold'em was favored by Texan poker player.

Poker, as a game, was never really illegal in New York, but running a poker game as a business was. That's why all the poker clubs in New York were always illegal joints. Actually, most of the New York poker clubs were really other types of establishments that had decided to adopt poker. Several bridge clubs were running poker games, as well as a few chess and backgammon clubs. Not surprisingly, this is the case even today, even if they are not the same clubs (although some of the people invoilved are the same). But presently, of course, there are more poker clubs in New York than ever before; and it's quite a variety. Some of these "clubs" are just rental apartments with one or two tables and a mailing list.

Cheating is not a rare occurence, in those joints, but most of the players seem to be oblivious to the fact. That is ultimatelly their own problem.

 

A game of skill

It has been said numerous times that poker is a game of skill. In fact, this is precisely why draw poker was legalized in California, in 1911. In short, the courts decided that draw poker was not a game of chance and therefore players engaged in a competitive match are not gambling.

Poker is in fact a game that combines elements of skill and chance and we've heard millions of times how winning poker players manage to stay on top, by playing the odds. Mathematically speaking, this theory if of course correct, but it should not be used as a blanket statements. The skill theory does not apply to all poker players, even if they are playing the same game.

Of course anyone that thinks they are not gambling simply because they are playing poker, which is "a game of skill," is a bit naïve. The "game of skill" statement is often misinterpreted and oversimplified. Poker is not a game of skill. Chess is a game of skill. Poker is a game that allows the element of skill to be used (by skilled players), to beat the element of chance (that bad players reply on), in the long run. That is not exactly the same thing as saying that poker is a game of skill.

A bad poker player can very easily completely eliminate all the elements of skill from the game of poker. In other words, it is very easy to sit down at the poker table and gamble. In fact, that precisely what the vast majority of "poker players" do. They gamble. The reason is because gambling is a lot easier than learning all the skills that eventually lead to a significant reduction (or complete elimination, in the long run) of the element of chance. Eliminating the element of chance is hard work (and can only be achieved as a long term objective). But completely eliminating the element of skill is the easiest thing in the world. And when you do that, you are gambling. So, it is quite possible to play poker as a game of chance. Not only is it possible; it's actually quite common.

When we talk about poker, we should not forget some historic facts. Right before the golden years of Texas Hold'em we were living in the era of the stock market boom. What made the stock market boom was publicity and hype. In the past it would take years to learn the ropes of the stock market. In the the old days investing used to be a serious business that people actually went to school for. But in 1998/99 everyone with an internet connection became an "investor" overnight. Twenty-something year olds were working as stock market "annalists" and "financial advisors" and willing to share their "knowledge" and "experience" with their clients, to help them properly manage their money and secure their financial futures. And how did all that work out for these "investors?" As it turned out, millions of online "investors" turned out to be just a bunch of gamblers and most of them eventually got burned when the market crashed. And if they pulled out early, with profits, they still got hit with enormous short-term capital gain taxes that wiped out most of the "profits." Most of the "strategies" for investing into the proper stock boiled down to "analyzing" charts that were updated in real time through various web sites. Basically, 99% of stock market investors from the late 1990s really had no clue what they were doing. They were just throwing money into the stock market, buying shares of companies they've never even heard of.

A lot of today's "poker players" are yesterday's stock market "investors" and "day traders." Nothing really changed when people deleted their stock market bookmarks and shortcuts from their browser toolbar and next morning replaced them with new bookmarks that now pointed to online poker rooms. The same human weakness that kept the day traders glued to their computers during the stock market bubble is keeping the online poker players up all night. Poker is even better, actually, as it offers faster "returns," than any online trading accounts ever did.

For more on this subject please read my blog post Is Poker a Game of Chance?.

 

Dealer's Choice

"OK, the next game is Crazy Turnpike (Route 32) with Replacement."

"What's that?"

"I'll teach you as we go... I actually don't even know it, myself, so we'll have to make up the rules as we go. Everybody, ante up!"

I personally can't stand dealer's choice games. As far as I'm concerned that's not even poker - it's just gambling. You're supposed to ante up on every crazy game you've never heard of, learn as you go, and "...please don't fold, cause we're here to have fun." And at the end, when you think you figured it out and finally have a good hand, the dealer says that everyone can "buy" an extra card.

If you are a tight player you may even call out 5-Card Stud on your turn. Then you may even catch a totally legitimate full house, and there may even be a decent amount of money in the pot, but them you have to split half of that money with the biggest loser, because "we play all the games high-low here" and the guy with the worst hand declared "low" before the showdown. So, even if you call-out the game you like, you will not be able to play it like you're supposed to, because there's always something different in dealer's choice games. And speaking of 5-Card Stud, how do you like splitting a big pot with the biggest loser, when your hand is a legitimate full house? Simply defies poker logic. But, my friend, that is exactly what I had to do the one time I was stupid enough to play in a dealer's choice game.

Some have said that dealer's choice games are cheater's paradise. I cannot see any logic in this. Or perhaps I am missing something here. Dealer's choice games are the poker equivalent of a sandbox where a bunch of people get together to mess up each other's sand castles. A serious cheat is better off sitting in a televised poker tournament than staking the deck in a "friendly" dealer's choice games, just to split half the pot with some loser at the showdown. But I do not dismiss the possibility that somewhere out there there is a skilled card cheat that really rocks in dealer's choice games. I just can't imagine how this kind of cheat would be of the same caliber as a card mechanic that works as a dealer in a poker club.

 

Friendly Games

As far as I'm concerned there's no such thing as a friendly poker game. The popular saying, don't play cards with strangers, may sound good at first, but if we give the philosophy some thought we must come to the conclusion that it is fundamentally wrong. I say, don't play cards with friends (when it comes to playing for money).

As a general rule, I personally avoid doing any kind of financial transactions with my friends. If I have something that a friend wants, I'd rather give it away as a gift than sell it. If a friend needs something done, I'd rather do it as a favor than charge for my services. In my mind, that's what friends are for. Of course, sometimes financial transactions are unavoidable, so from time to time we are all forced to count money with friends. And even with the best of intentions, sometimes friendships are broken, just over some stupid misunderstanding over money or because events took off in an unpredicted direction.

The absolute sleaziest monetary transaction I can think of is money "earned" through gambling. Gambling produces nothing and provides no services. The money is not earned through the use of any kind of skills that are in any way useful for our society, the money is simply won. Nothing is sold, nothing is bough, no services are rendered. The money is simply transferred after the outcome of an unpredictable event. On one side there is a winner, and on the other side there is a loser. In a pure contest of chance neither one of them is better than the other. In some games skill does play a factor. So what? The question is, do you really want to do this with your own friends? My answer to this question is simple. Why would I want to do any such thing to my friends, when there's at least 5 billion strangers out there?

Many people have the idea that it is somehow better or safer to play in so-called "friendly" games.

First of all, let someone explain to me what could possibly be friendly about a contest where someone will take money from someone else on the turn of a card? Poker is just a contest to win someone else's money without giving anything back in return. Period. It may feel good to win money, but can anyone tell me with a straight face that one can feel good about taking money from a friend in such way?

Also, the so-called "friendly" games are usually very loose, when it comes to rules and procedures. What does that mean? It basically means that one player eventually ends up hurting another player, because of lack of strict rules and procedures. One cannot simply loosen up the rules in a gambling game, because "we're all friends here." Loose rules are nothing but a set of circumstances that end up costing someone a chunk of money. In other words, if you want to make a gambling game as unfair as possible (without cheating), just loosen up the rules.

So, there's really no such thing as a friendly poker game, unless we're playing for toothpicks.

 

Limit, Pot Limit and No Limit Games

There is always a limit to the amount that people can bet in any gambling game. When the limit is whatever money one payer has, that structure is called "no limit." So, if you want to be technical about it, the term "no limit" is actually a bit of a misnomer.

In some movies, such as The Cincinnati Kid, for example, the player reaches into his pocket, in the middle of a round, pulls out his wallet and adds more money into the pot. That may have been how poker was played 200 years ago when there were no universal poker rules, but that's not how the game is played nowadays. If players play a no limit game, the stakes are table stakes. This means that whatever amount of money the player has on the table, is what this player is allowed to bet. It also means that this is all the money this player can possibly lose. In other words, if a player only has $100, it doesn't matter if another player has substantially more money. There were at least a couple of old movies where you see one guy raise more than the opponent had, and the opponent had to either borrow money, to call the bet, or lose all his money without a showdown of hands. Again, that scenario may have been worked into a script of a Hollywood movie, but that's not how poker is played.

Poker games with a limit structure are quite different. In fact, the exact rules of limit structures vary depending on the actual game being played. So, the limit structure for 5-Card Stud is not the same as the structure for Texas Hold'em. But basically, the limit determines the exact amount of money that any player can bet or raise. There is no flexibility.

When we compare a limit game to its no limit cousin, we seen realize the the dynamics of the games are quite different, even if the actual game is the same. In fact, the betting structure not only changes the dynamics of the game, but also the values of certain hands, simply because of the way some of these hands can be played, depending on how much money a player is allowed to bet. But basically, a limit game is better for the methodical player that is trying to squeeze the best value out of mathematical odds and probabilities, while the no limit game is more for gamblers, because the outcome is more dependent on chance. And this brings us to a paradox.

We all know that nowadays the world is swarming with so-called professional poker players. Everyone seems to be a poker expert. Everyone is talking about how poker is a game of skill and therefore gives them the best chances of winning, because they are a skilled player. Right! Everyone thinks of themselves as skilled players, not gamblers. So, here's the paradox. If all these "professional" poker players think of themselves as skilled and therefore play the game because of the skill factor, why the hell do they all chose to play no limit? Wouldn't it be more logical that everyone is playing limit poker. And it gets better than that. The most popular structure of no limit games is the tournament structure, which also happens to be the structure where skill plays the smallest role and chance plays the biggest. So, how come all these "skilled" poker players gravitate towards the structure where chance outplays skill?

All these "skilled" players will offer their own theories, undoubtedly, but it really all boils down to one simple explanation. Most of these guys are nothing but gamblers. If all these people were so blessed with these kinds of skills, they'd be playing chess, not tournament-style no limit Texas Hold'em Poker.

So, as far as betting structure goes, there are also pot limit games. Pot limit basically means that a player can bet up to the amount of money that is committed to the pot at the time when the action comes to that player. This is the least popular betting structure. The reason is probably because it is very difficult to keep track of the exact amount of money that is in the pot, at all times. The amount of money in the pot changes with each bet, call or raise. Dealers that deal pot limit games really have to concentrate hard to keep track of the running total. Again, it takes skill to do that in real time and although it only boils down to simple additions, this is something that's hard to do when players are betting, calling and raising. One would thing that skilled players would gravitate towards pot limit games, too. In fact, they do.

 

Cash Games

The term "cash game" doesn't refer to the notion that players are playing with cash, as opposed to poker chips. Yes, there could be actual cash on the table, but the term cash game means that the players are playing for cash, and not necessarily with cash. The concept of a cash game is different from the concept of a tournament game, which is essentially a contest for a prize; in the case of a poker tournament, the prize is mostly money (again, in cash) but sometimes it could be something else, other than money. Also, in a cash game any player is allowed to walk out of the game at any time and cash-out. In a tournament this is not allowed.

Inexperienced player don't realize that cash games are very different in nature from tournaments. A tournament has a time limit, but cash games don't. Also, the rules are slightly different, depending if the game is played in a tournament format, or as a good old cash game. What all this boils down to is that all the strategies to win are also different. This also means that many of the strategies to cheat in cash games are also different from many of the strategies that would be used to cheat in tournaments. Some cheating strategies that work in one format may be completely inapplicable in the other format.

I personally think that it is a lot easier to cheat in cash games than in tournaments. Some may disagree with me and say that there are some very easy cheating scenarios that can be done in tournaments. That is true, and I do happen to know of some unsophisticated cheats that have used (and still do) some blatant "techniques" to cheat specifically in tournaments. But the reason why I think it is easier to cheat in cash games is because there is no time limit and because the skill/chance ratio is more in favor of a skilled player in cash games than in tournaments. In other words, in cash games there is less gambling, which works better for skilled poker players. But in tournaments the element of luck plays a more significant role, and as we all know, even the world leading grand masters of poker often get crushed (on pure chance) by weaker players. Well, what works for legitimate skilled poker players also works for the illegitimate ones that are commonly known as card cheats. Cheating is a skill and strategy just like skilful playing on the square.

 

Poker Tournaments

At their basic level, poker tournaments are more of a gambler's turf. But despite the fact that skilled cheats may do better in cash games, professional cheats should (and often do) have a budget allocated just for tournaments. The reason is simply because the potential monetary rewards are far greater than in any cash games (with the equivalent buy-in). In other words, the buy-in/cash-out ratio is much higher in tournaments than in cash games, which is also one of the reasons why gamblers (in the true sense of the word) like to play in tournaments. But there is a "minor" difference between gamblers and cheats, however. Gamblers are dreamers that hope to somehow end up on top. What they don't realize is that their odds of ending up at the final table have been greatly diminished by the possible presence of a few cheats that don't depend entirely on luck.

Poker Tournament Poker Tournament
Poker tournaments became corporate events, with major tournaments attracting hundreds of people, most of them suckers. There's a bundle of money at the end of the rainbow, but does it all really go to one winner? I'm glad this guy is leaning on the pile of cash, because I almost missed it.

Tournament cheats are often teamed up (see collusion). Working single-on in a poker tournament is tougher than in most cash games and the chances of ending up on top are increased by team play. This also means that in large poker tournaments (i.e. those that are most attractive to teamed-up poker cheats) the single-o cheats are overpowered by those showing up in teams.

Mathematically-speaking, a team of tournament cheats is roughly the equivalent of a player that can do more re-buys and add-on than any other player and also play at several tables at the same time. A legitimate tournament player will truly risk everything, if deciding to call an all-in bet, after the re-buy period has ended. By comparison, a player that is part of a colluding team does not worry quite as much about busting out, when there are XX number of other team members working the same tournament out of the same pocket. Yes, the odds of catching a winning or losing card on the river are the same in either case, but a player that really gets knocked out no longer stands a chance of getting a piece of the money that will end up being divided amongst the winners. But a team member does.

This overly-simplified explanation is not the only benefit of a team working a poker tournament. But it does explain the simplest form of cheating at a poker tournament. If the cheats do nothing else than what I've just explained, they have a mathematical advantage over the squares. But let's not forget, noting but a "small" mathematical advantage is what pays for all the blinking lights in Las Vegas (read my blog post The Basic Principle of Poker Cheating). If one of the team members does end up wining the tournament, only that one will get the glory (and the worhtless bracelet); but all of them will get a chunk of that cash. And look at the photo, how much cash that could be. That's quite enough money for everyone involved.

The possibilities of cheating in poker tournaments go far beyond the simple scenario that I've just explained. Of course, when it comes to professional cheating there are never any guarantees on game-per-game (or tournament-per-tournament) basis. All that any cheating scenarios really accomplish is to give everyone involved a mathematical advantage. If a cheating team wants to survive in the long run, they have to stay away from forms of cheating that can easily be detected. In fact, if they are in it for the long run, there is absolutely no reason to do any of the risky business, such as bribing a dealer to run-up some hands, or any of that crazy stuff. All the necessary advantage can be gained through team-play strategies.

 

Playing Poker for a Living

I recently had a conversation with guy that has been working as a poker dealer for the past few years. He is not a licensed dealer, so he deals mostly in poker tournaments in and around his town. After we exchanged the usual greetings he made a bold statement, "I now live exclusively from playing poker. That's all I do. I don't do anything else."

Of course this statement was meant to impress. The way it had been phrased the statement would lead the listener to believe that he is making a living exclusively from playing, which could only mean, by being a consistent winner.

However, what didn't make much sense was the fact that I know him to be an impulsive tournament player and reckless gambler in cash games. The psychological profile simply doesn't fit into the profile of a consistent winner at the poker tables. I thought, there must be more to the story. And there was.

Further conversation revealed a few details that he failed to include in his initial statement. As it turn out, he runs a daily one table operation from his apartment. He charges 5 bucks per hour and also works as the dealer. His customers prefer to play at his place because of many reasons. First of all, $5 per hour is cheaper than what any of the poker clubs charge. Then, there is almost no chance of a police raid. And other reasons, whatever they may be.

Now let's put some numbers together.

If he charges $5 per hour and only runs his game 5 hours per day, a 10-player table makes $250 per day. If he only does it 5 days a week, he makes $1,250 per week, just from the time charge. Plus, he also gets tips, which can amount to $500 per week, for a total of $1,750 per week. When he deals, he does not play, so that keeps his bankroll out of harm's way. Let's not forget that all these earnings are in cash, which means that he never bothers to pay a penny in income tax. All this amounts to a rough estimate of $87,500 per year, if he takes 2 weeks off. That's $87,500 in cash, tax free. In addition he still works as a dealer for whatever tournament organizer happens to call him.

Now that he revealed more information about his poker activities and now that we put some numbers together, I can see what he means when he says that he lives exclusively from poker.

The story I just shared with you is absolutely not a good example of what it means to play poker for a living. But it's a very good example of how gamblers distort the facts to sell whatever story they are selling. There are in fact people that truly play poker for a living. But I bet 9 times out of 10 times there's more to the story than meets the eyes. At least there's more to the story than what people perceive when they hear the statement, "I play poker for a living."


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