Beyond Chance? The Persistence of Performance in Online Poker | Hacker News Reader

Beyond Chance? The Persistence of Performance in Online Poker

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28 pointsthret16 comments

It will be interesting to see how online poker dovetails with the big up-and-coming daily fantasy sports (DFS) industry. DFS is essentially online gambling on fantasy sports, but it has been classified as a "game of skill" and is exempt from the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA). Disney (owner of ESPN) just this month invested $250M in one of the two industry leaders (DraftKings) so I don't think DFS is going away.

If online poker could get enough groundswell (and, lets be honest, political backing) to receive a similar exemption, that opens to doors for a return of legalized online poker in the US.

The reason online poker isn't classified as a game of skill has nothing to do with the game and everything to do with the monied interests in Nevada and Atlantic City. If we start to see the DFS industry affecting in-casino sports gambling, you can expect it to receive similar treatment by the law.

$250M might seem like a lot of money, but consider that Sheldon Adelson spent, by most estimates, upwards of $150M in campaign contributions in 2012 alone. The total spend on political influence by the gaming industry is likely to be at least an order of magnitude higher.

Yeah, but by all accounts physical gaming in traditional locales is shrinking rather rapidly. Atlantic City lost many of its major casinos to bankruptcy last year, with more to follow this year. Nevada is in slightly better shape, but Las Vegas is transitioning into more of a family-friendly resort town as there is simply a lot more competition for gaming dollars from places like Macau, regional Native American casinos, and cities across the US granting gambling licenses to a limited number of urban casinos.

I've had my own questions about "DFS". I really don't understand how it's a game of skill, or how it's significantly different than Vegas-style sports book betting. I've been in too many office fantasy football pools only to end up in second place behind the 19 year old intern who drafted her players based on how attractive they were and didn't touch her roster all season. Every week is a toss-up.

Furthermore, I'm equally doubtful that the NFL and the NFLPA are ok with companies making billions in profit off of the NFL's games and individual players' performances. I think that if anything kills DFS, it will be this. Sports leagues can't be associated with gambling in any way, but the teams and players involved also have to protect their brands.

It's a game of skill much in the same way as poker. Experienced players will beat inexperienced players over the long-run. There are certain elements of randomness/luck (as with poker, sometimes you just get bad cards) - but DFS proponents would argue that identifying under-valued players and predicting performance to be a skill.

Surprisingly, the NBA and MLB have an official DFS partnership - as do individual teams in both the NFL and NHL. Some individual players also have "endorsed" certain sites.

Full list of DFS partnerships: http://www.legalsportsreport.com/dfs-sponsorship-tracker/

It is fairly well accepted that fantasy leagues has increased the nfl fan base. I think nfl is just fine with fantasy other than maybe they also want a piece of the pie. Over the next decade expect the major sports to be more involved with betting, whether it is pure betting or indirectly thru a fantasy league

The most layman explanation of skill in poker I've heard is this.

Everyone agrees chess is a game of skill. If 2 players played 1,000 games of chess where the winner of each match wins $1. In the end the most skilled player would have the most money.

Take that same scenario except after every 10 matches the players flip a coin and the winner of the coin flip gets $10. Over the long stretch the more skilled player will still end up with the most money. However in the short term it's possible for the less skill player to be ahead because of a few lucky coin flips.

Over simplification I know. However I've used it to try to point out the relevance of skill and luck in poker to people who have no concept of it.

If you read 'Characteristics of Games'[1] or watch some talks[2] by Richard Garfield he elaborates quite a bit on this topic. He uses the example of rando-chess, which is very similar to your example.

Quoting #2 below:

"The toy game example of rando chess is an elegant means of constructing a game with customizable levels of chance. Garfield uses it here to illustrate how skill and chance are not opposites. Rando chess is exactly the same as chess, except that, after play has finished, the winner is reversed with probability 1/6. Rando chess, with any probability (<0.5) of reversal, would universally be agreed upon to involve more chance than chess, but would involve the exact same strategic considerations as regular chess and hence the exact same amount of skill. Every skill and every strategic concept in chess applies equally to rando chess, and, perhaps modulo tilt control, the best chess players in the world will also be the best rando chess players in the world... it just might take a longer period of play to determine this ranking. If, somehow, chess could only be played as rando chess, what would society think of it? What probability of reversal would make rando chess a game where neither skill nor chance predominates over the other?"

1: http://www.amazon.com/Characteristics-Games-George-Skaff-Eli...

2: http://www.quantitativepoker.com/2012/09/20-thoughts-on-skil...

Awesome thanks for quoting. I haven't seen that book but I'll look into it.

I can't remember where I first heard the analogy. I believe it was a poker pro on a podcast or training video. It was many years ago.

It's hard to use a chess analogy with poker, because poker has a lot more decision points. Winning in poker is about drawing the right money into the pot at the right time through use of deception (and knowing the odds lets you know when the right time is at hand). A game of chess is a discrete unit with a winner and a loser (well, unless it's a draw), but most hands of poker have a single winner and no losers. Folding in poker is more of a strategic withdrawal; if the cards aren't there, the cards aren't there.

That's true also chess is a game where all variables are known, poker is not. So I agree they don't line up well in comparison. Again this was just an oversimplification that just because luck is a part of a game it doesn't mean that skill doesn't play a factor.

From Rounders: "Why do you think the same five guys make it to the final table of the World Series of Poker EVERY YEAR? What, are they the luckiest guys in Las Vegas?"

Isn't the easiest way to identify a game of chance versus a game of skill is whether a player can intentionally lose? If you can prove a player can be bad, it should be self evident that a player can be good.

A nice approach, but it still depends on some value-judgments about what constitutes "intentionally losing".

For example, imagine any game of pure chance, with zero decision-making needed from the player. Then add just one kind of decision: The ability to concede or forfeit a round.

On a practical level, we can see it's still a game of pure chance, but at the same time a player can play to lose... it's not a very interesting kind of loss.

Are there things you can be a professional at that don't involve skill?

Probably not. But poker, and many other forma of gambling require skill and/or knowledge of statistics and probability.

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