Net Bet Blog

Freakonomics's main protagonists, Steve Levitt and his faithful journalist sidekick Steve Dubner has a certain penchant for Poker and has made a number of posts on the subject.

As a economist poker player (albeit a bad one) this is a particularly interesting topic.

Phil Gordon Answers Your Poker Questions [Freakonomics]

This first quote sums up my view to an extent:

In his answers below, he discusses (among other things) variance, sunglasses, and why he’s not a gambler by nature, but rather “a strategic investor.”

This relates to poker being a game of skill that encompasses many of the attributes a trained economist should have - certainly those at my University.

Q: Do you gamble much on non-skill games or games that have a house edge?

A: No. I’m not a “gambler” by nature — I consider myself a “strategic investor.” In fact, what we do at the poker table isn’t very different than what investment professionals do — we just get our results every two minutes instead of every few months or years.

Q: How do math and psychology cross in poker? For example, if the book says a certain hand is a loser 60 percent of the time, how would this change if you know your opponent likes to raise with weak hands at this point, and if you suspect he is bluffing?

A: There are times in poker where making a correct decision is almost completely mathematical. For instance, if a player moves all-in after the flop and you have a flush draw or a straight draw, you can be 99 percent sure that if you make your hand, it will be good.

At that point, just making a simple pot odds calculation will lead you to a winning decision and psychology has nothing to do with it.

But, that being said, poker is the great game that it is because psychology plays such an important part in the game. Knowing your opponent, putting them on hands, and figuring out their state of mind and exploitable tendencies makes all the difference.

Clearly this is an important aspect of my decision to play poker. I assume by reading this blog that you also fit into this camp :-)

Q: Why do so many highly-intelligent people with advanced degrees decide to play poker?

A: It is a fascinating game that is impossible to master. The money isn’t bad either.

On this blog we also cover the UIGEA in detail. At least Phil Gordon agrees with me on this one using an identical phrase to boot.

Q: I hear a lot about compulsive gambling and gambling addiction which makes me wonder if the Safe Port Act, by causing online poker play to drop off, may not have been such a bad thing. What’s your opinion about the Act?

A: I think that the U.I.G.E.A. (the provision of the Safe Port Act that deals with internet poker) was a complete travesty.

First, it places an impossible burden on the financial institutions. Second, 85 percent of the U.S. adult population thinks that they should have the right to gamble on the internet if they want to. Third, what the hell does port security have to do with internet poker? Why do we allow politicians to do this?