There is a large bus currently driving around Galway advertising the ‘Full Tilt Poker Galway Festival’. What you may not have realised is that this is the biggest poker festival to ever take place in Europe. The sold-out final table starting on 12 August has a prize pot of €1,000,000. Moreover, in early July over 6,000 players entered the 44th annual ‘World Series of Poker’ in Las Vegas. After ten days of play, just nine players now remain in contention. The final table event will be televised in November to determine who wins the first prize of a staggering $8.3 million.
In addition to poker competitions, online poker has become particularly popular. Indeed, some of my current and former students put themselves through college on the basis of their winnings on these virtual poker tables. What is also interesting is the growth in poker has also been accompanied by a change in how the game is played. Concepts from game theory (which is a blend of mathematics, statistics and economics) have brought forward new tactics.
The game used for both the Full Tilt Galway event and the World Series championship is “no-limit hold ’em”, in which each player is dealt two private cards and attempts to make the best five-card hand that he or she can by combining these cards with five cards that are shown face-up and seen by all players. Those cards are revealed in stages: the first three are the “flop,” the fourth is the “turn,” and the fifth is the “river.” Players can bet any amount they like at each stage.
A number of years ago, a poker professional called Phil Galfond published a pape showing that the right way to analyse a poker decision is to consider your opponent’s “range”, i.e. the full set of different hands that they could plausibly have, given all the actions that they had taken to date.
Interestingly, if you sometimes make a strong play with weak hands, i.e. “bluff”, your opponent has a harder time narrowing your range down. Those looking to improve their chances of winning are advised not to memorise statistical formulas but to improve their feeling for ranges by playing with poker calculation apps that rapidly estimate odds by simulating thousands of hands.
Remember that poker players do not play just one game. A good player knows how to minimise losses during a bad streak and maximise winnings during a good one.
One of the best-known poker strategists, David Sklansky, characterised skilled poker players as being “at war with luck”. Indeed, the question as to whether poker is principally a game of luck or skill has been researched by the author of the popular economics book ‘Freakonomics’, Stevin Levitt.
In a 2011 paper* Prof. Levitt and a colleague, Thomas Miles, analysed play during the 2010 World Series of Poker and found that players identified as being highly skilled prior to the start of the events made an average return on investment of over 30 per cent, compared with -15 per cent for less-skilled players. The authors concluded that this large gap in returns is strong evidence in support of the idea that poker is a game of skill.
Essentially, as the game has become more and more popular, a younger generation of more mathematically-minded professionals has brought innovations into how the game is played. At present, Galway is where you can see this in action.