Gambling or Skill? Edge and Investment.

There were some lessons learned last night. Lamenting about woulda-coulda hands becomes the precursor of tilt for me. I need to maintain conviction in my hand decisions throughout a folded hand. Somehow I have this problem only when playing live as it is easier for me to maintain a long-term perspective when playing online (thanks PokerTracker). Also, I noticed that when dealt a folding hand, I have the tendency to turn the cards horizontally, as opposed to keeping playable hands vertical. Surely I have a sleuth of telling postures and habits like this. Additionally, I think I found a good articulation for my poker philosophy.

People like to think that poker is a skill game. I don't think poker is a skill game: it is still, very much, and overwhelmingly gambling. IMO the ratio breaks down to 80% gambling and 20% skill (unirioncally, the same odds of completing a 4 flush with 1 card to come). But like all forms of gambling, there are good gamblers, there are bad gamblers, and then there is the house, a perpetually winning gambler. Take blackjack for example: without card-counting, the house has a .5% edge (standard casino rules). Obviously there are a lot more idiots than perfect players to boost the house edge, but even so the casino earns a minimum of 50 cents on every $100 invested. It might not sound like alot, but enough to build a city in the middle of the desert.

Notice the two key words mentioned here: edge and investment.

Edge is what a skillful poker gambler needs to stay perpetually profitable. We're not talking about 2x return profitable here. From what I can gather, 1 big bet per hour (a big bet being 2x big blind, $1 in 50/1 game) seem to be the concurrent definition of a decent edge. If you can maintain that edge for 60,000 hands, you'll make (assuming a hand a minute, too fast for live play but about standard for online) $1000 just playing 50/1 in 1000 hours, or 25 40hr, 9-5 weeks. Again, that might not sound like a lot, but if you're skillful and can maintain that edge as you progress in limit, you can earn a pretty decent hourly rate. Professional poker players like Daniel Negreanu, who play mostly 200/400 hold'em during his "working hours" on the Las Vegas strip, makes more per hour than most attorneys.

Of course, to be able to play 200/400 like Daniel, you will need 1)a minimum of $10,000, or 25 big bets, just to be able to sit down and handle the table swings; 2)a minimum bankroll of $120,000, just to be able to handle the long-term variations; 3)to be able to stomach possible cold streaks and losing both of the above occasionally.

As for me, like every other poker player, I wouldn't mind being able to make a living out of it, so naturally the big bet/hour is the holy grail I'm aiming for. Playing 50/1 online, I can handle all three of the above for $25 table stakes and $300 bankroll. If I can turn my current $150 in PTY into $300, then $600, then $1200, then $1800, then $2400, then $3000, then $6000, I can play 10/20 with regularity and turn poker into a legitimate part-time job. In the long run, if I can maintain the edge, playing poker then becomes a profitable hobby/investment.

It'll take a few years, tens of thousands of hours and millions of hands to get there. That's the kind of perspective you need to evaluate the skill in my kind poker player. Give the same bankroll, table time, and playing conditions to me and Johny Chan in a who-can-win-most/lose-less race, I have confidence that I can keep pace with him--for the first 2 months only. With this long-term perspective, I can enjoy poker even if I'm not winning, but I need to be sure that I'm always sitting down at a table with protential for profit. At the poker table, I want to be an investor with an edge.