Is Poker Skill or Luck?
The question of whether poker is skill or luck continues to be the subject of great debate. If it is seen as luck, then it falls under gambling laws. If it’s skill, the game can’t be regulated by casino laws.
It seems that there are strong proponents for each view, thus creating countless lively discussions from poker rooms to the internet. It’s the legal implications – which can leave companies potentially susceptible to paying hefty fines if found in breach of the law – that make the skill/luck distinction so crucial.
According to lawyer Jeff Philips, “the issue of whether skill or chance is the dominant factor in the game of poker has never been litigated with the presentation of evidence in the U.S.”
Such legal issues depend on the state or country laws, and definitions of gaming and gambling, so there may never be a universal answer.
Why Poker is a game of Skill
Another salient comment comes from a blog post by silentarchimedes, who argues that there are many similarities between poker and investing in the stock market.
In economics, speculation is the villain and investing the hero. Speculation is associated with gambling and is considered to be a non-productive activity, sometimes even harmful to the economy. Investing, however, is a noble endeavour requiring skill and intelligence and serving a higher purpose, i.e. better capital allocation into the economy.
But how much gambling and how much skill is there when it comes to investing in stocks? The financial events of 2008 demonstrate that there was a tremendous amount of gambling involved in market trading in recent years. Similar to poker, it involves both luck and skill.
Another simple argument is to point out that there are thousands of professional poker players. It is true that many are young and cannot attest of the long-term viability of poker as their only source of income. But take someone like Doyle Brunson, who has been living off poker exclusively for the past five decades. Was he lucky fifty years in a row?
Another argument was developed by a Dutch Professor of Statistics who created a scale to rank games depending on how much luck or skill is involved.
His formula is …
skill = learning effect/(learning effect + chance effect)
… where learning effect is the difference between an optimum player and a beginner. Based on this scale from zero to one, poker scores 0.4 and ranks at the same level as chess. Note that chess, incidentally, is viewed around the globe increasingly as a sport.
And, by the way, have you ever met a professional roulette player?
The Legal Luck Question
This question might be interesting to some, but to many (including those with even the slightest involvement with poker) it is quite unjustified given the above. Unfortunately, the legal answer to the question could add (or not) literally billions of dollars in revenue to the online gambling industry because games of skill are considered legal by US laws, whereas gambling is prohibited. Equally, it could jeopardize the hobby of millions of American players.
If you have not yet done so, join the Poker Players Alliance, which represents all poker players around the globe. It lobbies US Congress intensely to pass the message that poker depends mostly on skill. If you play poker, or even if you agree that it is essentially a game of skill, then please join this organization that fights for our rights.
Three recent court decisions may have a profound effect on the skill/luck debate. And, by the way, it does not matter if this is Fixed Limit Hold’em, No Limit Hold’em, Pot Limit Omaha or Stud – all these poker variations are very similar as far as the skill and luck balance is concerned.
A lot has been talked about a ruling in Pennsylvania that determined that poker is a game of skill during a case regarding gambling charges against a home poker room. The judge used four criteria to dismiss the charges. 1. If data is available to make an informed choice. 2. If players can exercise skill in the game. 3. If skill sufficiently governs the outcome. 4. If the players understand how skill affects the outcome. This is the first case where the judge looked at recent studies and arguments such as the ones mentioned in the previous section. And this is the first case where Texas Hold’em was considered a game where skill predominates over chance. Therefore, it is not considered “gambling” under Pennsylvania law (as well as many other States).
The second ruling happened in Kentucky, where the Court of Appeals rejected the State’s attempted closure of 141 Internet domain names. Many of them were poker portals. This decision has been appealed to the State Supreme Court.
A third ruling was debated in February 2009 in South Carolina, but the Judge, Larry Duffy, declared that he had determined that Texas Hold’em was a game of skill. A strong argument was made by the late poker legend and WPT commentator, Mike Sexton, who was brought to testify by the Poker Players Alliance.
Another important development was the election of President Barack Obama, himself a poker player. He ordered to freeze all last-minute laws from the Bush Administration of which one, the ratification of the infamous UIGEA, was one. For reference, we discuss the UIGEA in more details in our article about poker legality.
It seems that the scale of justice is starting to tilt in the right direction that, of course, Texas Hold’em Poker is a game of skill.
Online poker has indeed been such a success because it is a perfect blend of skill and luck. If it were too much skill it would be like chess, meaning beginners would never stand a chance against superior opposition and would therefore not pursue the game or not even try at all. If it were too much luck it would be more like roulette and therefore not have the same attraction that draws in the more serious players.
If you are new to poker and not certain that it is a game of skill, that is perfectly understandable. This is exactly the type of question you should ask yourself. And the best answer is to play and study poker…