Wednesday, October 26, 2011

Floating an Idea About Poker and Risk

OverprotectedBeen going back over the testimony and discussion from yesterday’s House hearing, the one conducted by one of the subcommittees of the Committee on Energy and Commerce, titled “Internet Gaming: Is There a Safe Bet?” Lots of interest, there.

Probably one of the more curious moments during the hearing came during the testimony of Dr. Kurt Eggert, the law professor who teaches at the Chapman University School of Law. Eggert teaches classes in gambling law (among other courses) at the California university. He also identified himself as an expert on consumer protection during yesterday’s hearing.

In the context of discussing various ways to protect online poker players -- or, as Eggert refers to them, “consumers” -- in a newly regulated online poker environment, the law prof brought up the need to inform players exactly what they are risking when they sit down to play.

Since “the greatest danger to their bankroll comes not from the online casino itself, but rather from other players,” Eggert suggests there exists a special challenge with online poker when it comes to informing players of their level of risk. He understands that sites can and should make known what the rake is going to be, but he also believes that not knowing just how significant of a “danger” those other players are to a person’s bankroll represents a problem in need of fixing should online poker become regulated.

Reading through his testimony, it is clear that Eggert has at least a rudimentary understanding of how poker is played and even how the “poker economy” works, explaining himself how in these “financial ecosystems... most of the money brought into the system by recreational gamblers, who often are willing to lose money in order to obtain the recreational value of gambling.”

So Eggert understands, I believe, that in poker you have to have losers. I also think he is aware of the fact that there are probably going to be more losers than winners in poker’s “financial ecosystem,” however it might be arranged. All of that Eggert accepts. What is problematic to the law professor, though, is the fact that all of these “consumers” who are losing aren’t being informed adequately ahead of time what exactly their level of risk is when they sit down at the tables.

There exists a very simple answer to the problem, I think. In fact, it is so simple it suggests this isn’t even a problem at all. But first let’s look at the solution floated by Eggert yesterday.

Kurt Eggert, Professor of Law at Chapman University School of Law“One possibility that government regulators could investigate would be requiring Internet poker sites themselves to track and list ratings for Internet poker players, much like the ratings used in the chess world,” suggests Eggert. “In chess, a player’s rating is determined by a player’s win and loss record and the strength of the competition, so that a win against a higher rated opponent provides a bigger rating boost than against an equally rated opponent. To convert this system to online poker, it would be necessary to factor into the ratings how much money was at stake in the game, so that big wins or losses would count more, and so that players could not intentionally reduce their ratings by trying to lose numerous very low stakes games. Therefore, a players’ rating would increase if he or she won money, and the amount of increase would depend on the amount won compared to the amount wagered, as well as the rating of the player compared to that of his or her opponent.”

Anyone who has played poker even for a short period of time realizes at least a couple of obvious, fundamental problems with Eggert’s idea. It’s an excellent example, really, of an academic who has been seduced by a theory that sounds great up in the office but would utterly fall apart if put into practice.

One problem, of course, is the fact that the amount one wins or loses doesn’t really work as a measure of how good or bad a player one might be. Whether we are looking at a single session or a much larger sample size, one’s bottom line might suggest something of one’s skill level, but cannot be used seriously as meaningful indicator by which to judge skill level. In fact, saying “big wins or losses would count more” when calculating such ratings only makes things worse, since we all know players of wildly varying skill levels play for a variety of stakes -- high, middle, and low.

A second obvious problem is that making such judgments about other players is, in fact, part of the game. The further Eggert explores his idea, the more he reveals a lack of appreciation of that fact.

“By providing the ratings of each player at the site,” Eggert continues, “poker sites would alert recreational gamblers when they are facing a player with a much higher rating, and so one likely to win against them, whether that opponent is a poker ‘bot,’ a data mining professional, or simply a much better poker player.”

From there Eggert goes on to imagine the benefits to all -- the players and the sites -- that would result from his plan to rate players. He also realizes some might not want to play games in which such information is shared so freely, and so suggests that sites could host “ratings-free rooms” where nothing about players’ relative successes and failures at the tables would be made available.

To be fair, Eggert’s concern about datamining as a “consumer protection” issue is worthwhile. Even his worrying about the “bots” coming to get us is fine, too, although I think most of us know there are still significant limitations to bots’ effectiveness, not to mention genuine means to police against their use. When building this sucker from the ground up, these are both issues that will have to be dealt with among many others when constructing a newly regulated, U.S.-government-approved online poker environment.

But talking about trying to find ways to protect less skillful players against more skillful ones is an unneeded distraction here. The fact is, some (most, really) of the “consumers” have to get consumed. And everyone -- fish, sharks, what have you -- who wades into the player pool should know that when doing so he or she necessarily risks getting eaten.

I said earlier there was a simple answer to the question of how best to identify to players exactly what they are risking whenever they sit down at the table. It’s not a hard calculation to make, really, and it follows the same formula regardless of the player and whether one is sitting down with a bunch of unskilled yahoos or a table full of top pros.

What is the risk when sitting down at an online poker table? The amount for which one buys in. No more, no less.

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Blogger SirFWALGMan said...

I think YOU sir have missed the point.. this is already being done.. in a consumer based system obviously all of this information is of value.. so people use things like Poker Tracker, online sites that track ROI, and other methods to know EXACTLY who they are sitting down with. It is not a system that needs to be created, it is a system that ALREADY EXISTS in the poker environment.

If I need to know how good or bad a poker player Short Stacked Shamus is I can just go to a place like and see exactly how good he is.

10/27/2011 1:44 PM  
Blogger Short-Stacked Shamus said...

Hey, Waffles!

No, I haven't missed any point here. Of course, I'm aware things like PT, HEM, and the various sites that track players' results exist in the current online environment. And how players presently use that info to their advantage.

But U.S. legislators aren't talking about starting up online poker again as it previously existed. They're talking about creating something altogether new. And thus they are taking under consideration some of the ways the game can perhaps be unfair -- including ways that it was unfair in the past.

Eggert's idea to rate players is very flawed -- the practical consequences would be disastrous in numerous ways. I think it is unneeded "noise" here. And it is a silly way to try to warn "consumers" what they are risking by playing.

When I criticize his idea to create some sort of ratings system, I'm not ignorant that such a system already exists in the form of PT, HEM, PTR and similar sites, etc. I'm criticizing his notion that it would be possible (1) to create a ratings system that would make sense, and (2) that tagging players as "sharks" or "fish" or whatever wouldn't impact the game in a considerably (negative) way.

That said, I get Eggert's worrying about datamining (as I say in the post). He's leaning in the direction of balancing the playing field by making the info available to all, but it seems to me that a better solution would be to try to build a game in which it was hard or impossible to do the sort of datamining we grew accustomed to before. (Or in which datamining didn't provide such an advantage?) And maybe get rid of multi-tabling and other things we've taken for granted, too, who knows?

10/27/2011 4:10 PM  

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