Many have debated endlessly about whether poker online or live should qualify as gambling. Pros who play poker online for a living and travel to play live events say sage things like, “Well, if it were gambling I couldn’t be doing it professionally now, could I?”

But others, notably Doyle Brunson (TexasDolly) is on record saying (paraphrase), “Of course it’s gambling. Are you some kind of bozo? Although that doesn’t mean that some folks aren’t better at it than others.”

Gus Hansen was once asked by a reporter what role luck played in poker. He responded that in any given session it probably accounted for about 90% of his outcomes. Over a month, he guessed it was about 10 or 15%; over a year it was down to around 2-5%.

So, what are we supposed to make of all of this? Is the game of poker gambling or not? Let’s start with semantics: exactly what does the term gambling mean?

What Does Gambling Mean to You?

It makes sense to treat gambling as a setting where something of value is put at risk for the possibility of ultimate gain. This seemed fairly straightforward but, alas, this definition turns out to cover just about every interesting thing that people do. Buying stocks is gambling, as is commodities trading, investing in real estate, getting married, planting a tree, going to college, opening a small business. Every freaking thing is gambling! Which, of course, is true; but unbounded truth isn’t very useful. To be practical we need to dig deeper.

Is Poker Skill or Luck? Let’s Get it Right

If you’re a skillful player, you will triumph over bad players in the long run without any doubts.

– Says Jonathan Little from mypokercoaching

From a legal perspective the issue turns on the determination of “predominance.” That is, a game or enterprise is classified legally as gambling if luck and chance predominate over skill. No one has ever argued that opening a small business is a “gamble” (although it manifestly is) because the standard interpretation is that the business acumen of the proprietor is the key factor and “dominates” any contribution that chance elements might play.

Lotteries and roulette wheels, slot machines and craps tables are all unambiguously classified as “gambles” because the overwhelming determinant of the ultimate outcomes is chance. For the better part of our history, real money poker had been viewed by the courts as “gambling” on the grounds that luck was the predominant element.

More than one judge or legislator was heard to utter statements like, “Whoever ultimately wins is the player who shows the best hand, and that is the luck of the draw” — thereby, of course, showing that he/she didn’t know dick about poker. This legal stance is important because it allows states and nations that have anti-gambling statues to criminalize the game. Recently a number of important rulings in the US have turned this interpretation around.

In Colorado, Pennsylvania and North Carolina judges and juries have determined that, in fact, the skill elements override the chance factors and that, in legal terms, poker is not gambling.

Two Studies Proving Poker is a Game of Skill

Two reports appeared a while back that attracted a good deal of attention: one by Cigital Group and one by University of Hamburg. The first was the large-scale examination of over 100 million hands carried out by the Cigital, a consulting firm in Washington, DC. The two main findings, both of which fit nicely with the intuitions of most experienced poker players, were:

1. Three-quarters of all hands never go to showdown.
2. Only about twelve percent of hands are actually won by the best hand.

These results showed that poker is a game of skill since the chance element (the cards actually dealt) played a smaller role in the typical hand. It’s very much about what ranges you’re representing and finding good spots to balance bluffs. But other than an analysis of hands, there also needs to be an analysis of players.

Critical Repetition Frequency (CRF) – Player Analysis

The first, solid start in this direction was an analysis in Gaming Law Review and Economics by Ingo Fiedler and Jan-Philipp Rock at the University of Hamburg’s Institute of Law and Economics. They examined the records of over 50,000 individual online players. They began with the assumption that poker is a game of skill but pointed out that no matter what the poker community may believe, this is still a hypothesis subject to test.

Importantly, they note that no specific statistical feature of the game has been identified that could be used in this kind of analysis. Their candidate for this measure is the Critical Repetition Frequency (CRF) or the number of hands needed before a player (and a data analyst conducting the experiment) can be confident (95% sure) their results reflect skill level and are reliable.

They crunched the numbers from the play of 55,000 online players over millions of hands of Texas Hold’em from mid-level games The results were surprising. An exceedingly skilled player, one averaging 100BB/100hands, has a CRF = 300. That is, if they can keep this up for a mere 300 hands they can feel confident in their results.

For skilled players with more modest (and realistic) win rates, the number changes dramatically. A (still unrealistic) win rate of 30BB/100h has a CRF = 3,300; one of 5BB/100h is 118,000 and 1BB/100h = 295,000. If you’re averaging +1BB per 100 hands don’t trust your results and even if you’re averaging 5BB/100h you probably shouldn’t either, unless you’re multi-tabling and doing it for many hours.

The Fiedler and Rock approach provides strong support that poker is a game of skill. Combined with the Cigital study, it presents converging lines of evidence for the skill-based argument, one from the “hands” perspective and one from the “players.” This may help further in the fight towards legalizing online poker across all US states and many other countries worldwide.

A Pragmatic Approach to Poker as “Gambling”

What’s needed is the recognition that there are two underlying dimensions that characterize the vast majority of human enterprises, in particular the “games” we play.

1. The normative expected value (EV) of the game.

That is, what is the typical outcome for the average player of any “game?” If the game is roulette or craps or slots we know the EV is negative and often we can calculate it.

In other “games” the EV isn’t simple but can be estimated. For example, going to medical school is a huge gamble (tuition, time, effort) but it has a positive normative EV because the average doctor makes back these expenses plus a lot more. But it’s still a gamble and there are more than a few who have lost big. They never graduate, fail to pass the licensing exams or are just lousy doctors.

Starting a small business is a highly regarded enterprise in our culture but it is a gamble and one with large negative EV; over half fail within five years. Marriage is another gamble with significantly negative EV. Like opening a small business, over half end in divorce.

Poker also happens to be a “game” with significant negative EV because of the rake. If all poker players were of equivalent skill then all would be losers. But, this pragmatic stance has another dimension to it.

2. The flexibility of the game.

Flexibility refers to the things that the player can do to shift his or her personal EV. Some games, like roulette, have virtually no flexibility. There is nothing you can do that will modify the EV. Craps has a bit more flexibility in that you can adjust the bets you make to reduce the house edge.

Opening a small business has huge flexibility and the business acumen of the proprietor is critical in determining the outcome. This is why the legal establishment regards such “games” as lying outside the standard prohibitions that many have against gambling.

In fact, most of the enterprises that people engage in that are marked by high flexibility are virtually never thought of as “gambling” — but from this pragmatic stance they are. And so it is with poker. The game is pretty far out there on the “flexibility” dimension.

Who Really Wins at Poker?

First, the stakes being played for are critical. You can find excellent players at the lowest stakes and truly horrible players at the highest. Second, private games are different from games in licensed cardrooms, live play is different from online poker play. And short-handed play is different from full-ring games.

80-85% of regulars are $1/$2 or $2/$4 No-limit poker players and are not long-term winners. The problem is the natural variation in the game (“luck”), plus a host of other factors. These include rake per hand and often a “bad beat” jackpot. Winning 1 or 2 BB/hour regularly under these conditions is unattainable, even if you’re sufficiently skilled in cash games.

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Same when it comes to mid-stakes, like from $4/$8 up to $10/$20 or $15/$30. No-Limit games with blinds of $1/$2 and max buy-in of $200. Fewer than 5% of the people who routinely play at these levels in legitimate cardrooms are making money.

Things really change when it comes to semi-high and high stakes games, where the true pros emerge. These games run from $20/$40 to $80/$160 Limit and $ 2/$5 to $10/$20 No-Limit. 10% or 15% of regulars in these games are long-term winners.

The impact of the rake is lessened at these stakes, but the critical factor is that it is at this level that you first find regular “contributors”. Folks with lots of money and gamble who routinely shoot craps with black chips and like to play poker similarly. They are rarely sufficiently skilled to present much of a problem to the experts and, as a result, provide the profit margin. 

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The Truth About Running Good and Heaters in Poker

We’ve all been there – winning a few hands in a row and getting that rush or feeling of invulnerability. However, the truth is that each hand is independent of the previous hand(s) and the probabilities of particular holdings don’t change because of previous success or failure. So, there is no increased likelihood of winning the next hand because you’ve been “running good”. Just like there is no increased likelihood of losing the next hand if you’ve been “running bad.”

However, there is something to be said about playing better when we’re winning than losing. Because winning bolsters confidence and increases your aggressiveness. This has been studied by psychologists, even in sports players. So there is some reason to play a rush if your game is sharper than usual when you do.

You can also take advantage of your image at the table when other fishy players don’t understand the “run good lie”. If other players believe you’re on a rush/heater, they may adjust their play against you – Perhaps become more passive. So you can easily push them around with raises and aggression. However, this will not work against solid regulars who know what’s what. 

The Maths of Luck in Poker: Some Do Run Worse

Players often complain about their bad luck and rotten cards, agonizing over missing flops and getting sucked out on. You have to get over this if you have any hope of becoming a legit, long-term winner in poker. You have cards; therefore you have to learn how to play the best poker with them. Put on a brave face when your opponent hits a two-outer, but also be gracious when you hit your hand.

The truth is there are certainly some people who have been luckier than most and some who have been unluckier than most. It’s true that as the number of hands dealt increases, the luck element shrinks –  but it doesn’t go away. In fact, it continues to play a role.

Distribution of Luck in Poker Over Time

Assume there’s a distribution of the long-term expected value (EV) of every possible hand played. From every poker position under all possible circumstances. It will approximate a normal, bell-shaped curve. 

The hands with long-term expectations will be infrequent, mainly because they don’t get played often, and will show up in the left-hand tail. Those with the highest EV will also occur rarely because the situation has to be “just right” for them to get paid off. Those will appear on the far right of the curve. Those with average outcomes will occur with the greatest frequency and be at the peak in the center of the curve.

If you plot the distribution of the “luck” of each player (that is, the EVs of the hands they are actually dealt), you’ll get another normal curve. And when you plot it, you will discover that some players are below the mean, some above it – and a few are far below or above it. Some folks are going to be flat out “luckier” than the norm and others “unluckier.”

Think about unlucky scenarios in real life – like getting hit by lightning or winning the lottery. So, yes; you have to play the cards you’re dealt – in the most advantageous manner. Cards have no memory, so your expected “luck” for tonight’s session is the statistical norm, the average outcome. So go play your best game and don’t sweat it. You can’t do anything about the cards you’re dealt.

So, is poker “gambling?”

• Semantically, ‘yes’ because poker, like most other activities involves taking risks for possible ultimate reward.
• Legally, the answer used to be ‘yes’ but slowly it is becoming ‘no.’
• Pragmatically, ‘yes’ and ‘no’ depending on the player’s ability to exploit the inherent flexibility in the game.

While you can play other skill games for fun, with no stakes, like chess for example, you can’t do the same with poker – whether online or live. You can practice for free and enjoy a few rounds – but not for long. The element of winning and losing money is a big one, and is what really gives the game its appeal. Poker without anything to win or lose just isn’t the same, in our opinion – any many would agree.

You can play for free or for too low a stake – and then it may become a game of luck. Because people will not care and will actually gamble with any two cards. Meanwhile, when you stake something to win something – the very definition of gambling in poker – you play differently. That’s when the skill comes in. Sure there’s poker variance to consider, as we discussed. However long term, and this one is very important, the game is beatable and can yield positive returns.

There’s no profitable casino games – but there are profitable Texas Holdem poker games.