Cogito Ergo Sum

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I play poker, therefore I am. No limit Texas hold’em poker (or simply Hold’em) is widely acknowledged as the Cadillac of card games. Any player worth his salt will warn you that it takes 5 minutes to learn and a lifetime to master. The game has come a long way both in terms of perception and playing strategies making it the only card game with adrenaline power to be televised. Variations of the game were played in gritty saloons in the Wild West and steamboats on the Mississippi where you could get killed over a bad beat. Today it is the mainstays at casinos all over the world and consistently attracts the high rollers and thinking payers that don’t want to play the house. With the advent of the internet, it is played by thousands of people at any given time of the day, making millionaires of some or paupers of others, every second. The World Series of Poker Main event boasts of one of the largest payouts in any sport, $9MM to be exact in 2010. That’s was what Jonathan Duhamel, a 22 year old from Montreal won after he emerged at the top of more than 7300 entrants in the 2010 World Series.  

So what is this game all about? In short it is a game of making the right decision with imperfect information and has little to do with your cards or for that matter Luck. In many ways it is a game that closely resembles something we are all familiar with…. Life. As you go about your life the basic conscious objective is to make decisions in self-interest while being limited by resources. For the uninitiated here’s how the game is played- 2 cards are dealt face down to each player followed by exposing  5 community cards face up that are available to everyone to improve their hands. The objective is to make the best combination of 5 cards from a total of 7 available cards (2 dealt to the player and 5 for the community). The dangerous aspect of the game is the innocuous ‘no limit’ part-this means that there is no upper limit to the amount that one can wager at any point when the hand is being played out. This is the challenge that makes the game alluring and intriguing, for the money that can be won and more importantly, for being able to figure out how to consistently make the right decision without regard to the outcome – win or loss. Confused? If something has a 90% probability of happening then 10% of the time there will be an adverse outcome. That’s called a bad beat not a bad decision.

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In the 1976, David Sklansky,  a mathematician and alum of Wharton, wrote the definitive book on the application of game theory math to the game of poker. The book was by itself is worthy of a PhD. Unfortunately this book’s strengths are its very weaknesses. The math is overwhelming to the casual player making it a dense read. This was followed in 1978 by The Super System written by a then 46 year old professional gambler with no academic training who by then had more than 20 years of playing experience. These 2 books changed the face of poker by putting a structure around decision making thus letting the secret out. Doyle Brunson, the godfather of poker and the author of the Super System, is now 77 years old and still going strong at the poker tables, which says something about this game. But knowing the ingredients to the secret sauce was not enough as the games were still heavily dominated by professionals who knew how to put it all together. And then Moneymaker happened. In 2003 Chris Moneymaker, a then 28 year CPA from Tennessee  won the World Series of Poker beating a field of 800 players  to take home $2.5MM becoming the first amateur to win the Main Event. What was more astonishing at the time was that he did not pay the customary $10,000 entry fee but instead qualified through an online tournament for a few hundred dollars. This was a water shed moment… there was a demonstrable event that the math theory worked. The professional gambler no longer had the exclusive edge on the game. This lead to a snowball effect and within 3 years fields of more than 8000 players were vying for a payout for the #1 position in excess of  $10MM and.  

This is a social game where bluffing and banter are par for the course. Reading your opponent based on their exhibited actions and facial expressions are crucial. I use the same skills I have learnt at the poker table to any negotiations at work. I know not to believe someone making an assurance followed by a gulp and signs of nervousness. No wonder FBI agents have written books on how to read and extract poker tells through interrogation strategies.

For many of us the grind continues. Let me leave you with a bad beat story. Villian 1 is the first person to act and is short stacked. He pushes all-in pre flop (before the community cards are exposed). It is folded around to me in mid position and I look down at AA. I call the all-in for about 30% of my stack. The action fold around to the last to act – Villian 2. He goes all-in over the top now costing me another 25% of my stack. I naturally call. With 2 players all in, the villians reveal their card. Villian 1 holds 66 and Villian 2 holds KK. The 3 rd card is a 6 giving Villain 1 a clear lead with 3 of a kind. Then the 5^th card is a K giving Villian 2 the win. No wonder the outlaw Wild Bill Hickok was killed playing poker.

BY ARIJIT GHOSHAL