Poker’s Effects on Society – Part III

by Lukas Gloor and Adriano Mannino

The previous posts in this series have outlined some of the ways poker benefits people. The first post centered on poker’s economic contributions to society, the second one on a comparison between poker and tennis – both activities that can be done as a hobby or professionally. What has been missing so far is the harm poker does to losing players, especially to those who are losing more than they can afford. This last post in our series is going to address poker’s “dark side.”

Is poker gambling?

Whether poker qualifies as gambling or not depends on the way people play it. For skilled players who are aware of their limits, poker is not gambling. The math and game theory behind poker imply that there is plenty of room for players to make mistakes, which can in turn be exploited by better players. For one particular variant of poker, heads-up limit holdem, the best, unexploitable strategy has already been found – it describes the perfect action for every decision a player can be faced with in this game. For more complex variants of poker, the ideal strategy is, just like in chess, not yet known – but our understanding of these games is nevertheless good enough to tell that certain plays are better than others. If one is not getting the right price, it is just wrong to call and all-in with a drawing hand, meaning it is guaranteed that such a play would lose money in the long run against a competent opponent. The mere fact that many players make consistent profit year after year is enough to show that poker is not gambling: If it were, each one of these players would be 50+% likely to lose money in the coming year – but no one in their right mind would expect this about established poker pros, and the data in fact confirms that this is not how things go.

Certainly, luck does influence poker, as even the best players sometimes have a bad year. But this is no different from other skill-based games/endeavors where variance sometimes plays a role: Certainly it is important how good your startup idea is in business, and how good you and your team are at executing it, but luck plays a large role as well. Even in tennis, a game that is a lot more skill-dependent than poker, the best players sometimes lose unexpectedly against lower-ranked opponents when they hit a bad day. The luck-component in poker is higher than in tennis or chess, however, this greatly depends on what is being assessed. In online poker, it is possible to play hundreds of thousands of hands within a single year. With this amount of volume, the luck-component can become very small, because the more hands are being played, the more likely it is that the better players come out on top. If the best player in the world were to play a million hands against an amateur, the odds that the amateur would win would not be drastically different from an chess amateur beating Magnus Carlsen at chess.

Even though poker is not gambling, it can be (and often is!) played as gambling. If you are a good player but play above your bankroll, you are essentially gambling, because even though you might be more skilled than your average opponent, there is a large chance that you will lose all your money. And if you are worse than your opponents, you are certainly gambling as well, because the only way you will make a short-term profit is by getting disproportionally lucky.

Playing poker as gambling

Poker is a zero-sum game. The prize pool in poker is paid for by the players themselves. The casinos take a fee, and the rest is distributed among the players. If there are big winners in poker, this set-up implies that there will also be many and/or big losers. What does this say about the status of poker, is it a “dark game,” as Dan Colman called it? This depends on how bad the situation is for the losing players. Some people play poker for fun and, while they would rather win than lose, they won’t be cast into financial troubles if they lose the money the put up. However, there are also losing players who gamble for more than they can afford; it is for these players that poker is indeed a dark game. How many gambling addicts are there who play poker? And how much of a contributor is poker to their gambling problem?

Problem gambling in general

To get an idea of poker’s harmful influence on problem gamblers, it makes sense to first survey problem gambling in general. This section focuses on all forms of problem gambling and is therefore not representative for poker.

The total prevalence of problem gambling is between 0.5 and 3%, varying by country. These figures include pathological gamblers (0.5-1% usually), as well as people “at risk” of pathological gambling. The harms from problem gambling include (source):

suicide, depression, relationship breakdown, lowered work productivity, job loss, bankruptcy and crime. For example, a 2008 survey found that gambling was the most common motivation for fraud and that the average loss was $1.1 million per incident. Moreover, the rough counts of people directly affected ignores the ‘ripple effects’ of problem gambling. For each problem gambler, several others are affected — including family members, friends, employers and colleagues. […] While it is hard to quantify some aspects of these harms, such as suicide, the evidence suggests costs equivalent to many thousands of dollars per person affected.

In Australia, where the gambling situation is the worst, problem gambling costs $4.7 billion in economic losses. The harms caused by the gambling of all those who are not considered problem gamblers are roughly equivalent. For comparison, the total costs from alcohol misuse in Australia are $14.4 billion.

slot-machines

Where does this harm come from, and how much of it falls into poker? The vast majority of problem gamblers play on electronic gaming machines, so-called EGMs. These machines are designed to exploit biases in human behavior to maximize profits for the casinos. For instance, high playing speed, blinking lights and sounds, “near misses”, as well as the possibility of instant, life-changing rewards, are all present to induce players to spend more money. Figures for Australia suggest that EGMs account for 75-80% of all problem gambling, and that problem gamblers account for about 40% of all the industry profits made from EGMs. Gambling losses in Australia, where EGMs are abundant everywhere, are more than $1200 per capita.

Comparing poker to other forms of gambling

In comparison, poker puts players at a much lower risk of gambling addiction. This is mainly  because poker requires more patience, and because the sums to be won in poker are rarely, with the exception of large tournaments, more than 2-10 times the buy-in amount.

However, casinos sometimes offer large bad beat jackpots to incentivize players to play more. In addition, especially in online poker, turbo and hyper turbo poker formats have become popular, where the winner is decided within minutes. At these edges, poker starts to resemble slots/EGMs more and more, which poses a greater threat for problem gamblers. Even so, there still remains a large difference between hyper turbo poker formats where games last several minutes, and slot machines where gamblers can play more than a hundred games per minute.

To summarize, poker makes up only a small portion of problem gambling, and poker itself is comparatively a smaller source of gambling addiction than e.g. the playing of EGMs. This is not to say that poker does not put players at risk for problem gambling, but on a spectrum from investing into the stock market or start-ups, to sports betting, to EGMs, poker is probably closer to the stock market than it is to EGMs. Some high-speed varieties of poker, especially those played online, can be more risky, but they too are less of a risk for gambling addicts than many other forms of gambling.

Perhaps poker sometimes serves as a “gateway drug” to more dangerous forms of gambling. At least the way casinos prominently promote poker suggests that this may be the case. However, because poker is in theory a game players can beat, it would be an unlikely transition for players to move to something else, like slot machines for instance, where they know for certain they will never be able to win in the long run.

Is poker societally negative overall? This is hard to tell. If poker stopped existing, many players with a gambling problem would continue to engage in other forms of gambling. In addition, the first post in this series showed that poker has considerable benefits, e.g. the tax revenues countries get from poker are quite large. Would people otherwise be spending their money on things that are clearly better?

What can be said with certainty is that poker does have dark components, and that it would be better if more was being done to protect the players.

What does this mean for REG?

The harms caused by problem gambling in general are considerable; they are roughly on par with the harms caused by the misuse of alcohol. Poker only accounts for a small fraction of these harms, both because the volume of people playing poker is comparatively low, and because poker players are at a smaller risk of developing gambling problems than people who engage in other types of gambling. Nevertheless, poker is a zero-sum game, which means there will be many losing players, and a significant portion of these losing players are losing more than they can afford. What does this make of REG’s mission to help people in need? Is it justifiable that REG profits from a game with such a dark side?

There are several points to be raised in reply. Firstly, if the problem is the harmful consequences of poker, then it should be noted that these consequences do not just go away if poker players stopped donating a part of their winnings to effective charities. To strengthen the critic’s case, it could be argued that REG incentivizes more people to try poker, because it gives poker a better image. It is doubtful whether this effect exists currently and whether it would be large. If it did exist, it seems like the sort of players who are inspired by REG to play poker are not a random sample of the population. Given their interest in charities and in rationality, it seems less likely that they would e.g. get hooked on games where they do not have an edge. Next to the recommendations on charity, REG’s philosophy also puts a strong focus on rationality in every-day life. For instance, we promote an understanding of cognitive biases and how they apply to situations in poker. This includes e.g. the effect that poker players should be wary of not overestimating their skills.

Another point to add in the contexts of poker’s harms on society is that hhile it is philosophically controversial whether harm can be “compensated” by doing good elsewhere, it should at least be acknowledged by critics that donations to the most effective charities are helping people a tremendous amount. REG’s recommended charities have been chosen because they are the best in terms of the amount of lives that are improved with a given donation.

Finally, it should also be noted that supporting REG does not mean that players ought to be happy about every facet of the poker industry. In fact, as examples like Victoria Coren’s resignation from Team Pro shows, as a famous poker player, one is in a great position to also address the dark side of the industry in order to change something from the inside. This strategy is often more effective than boycotting something from the outside, because by being part of it, one can better reach the individuals who matter for the industry’s future.

For some people though, the problem is not so much about the harmful consequences, but more about the attitudes promoted by poker. In a comment on an article about the “Colman Controversy,” former poker pro James Vogl wrote the following:

Professional poker players may view themselves as entertainers. Perhaps though, digging deeper, on reflection[], pros are vultures that exploit weakness to “grind” money from “fish”. Have you ever thought about how disgusting those two terms are at heart?

This highlights an important point, and certainly gives poker players something to think about. But in all fairness, most poker pros will have a more nuanced attitude to the game than “let’s grind money from the fish” – especially after reflection. And reflection is important, because it leads to better decisions, to decisions that are more in accordance with one’s goals. Reflection about poker’s contribution to society are likely a significant part of what motivates poker players to “give back” in one way or another. It is understandable that some people would not want to play poker themselves, if playing poker goes against their self-image. But others may have a more pragmatic/outcome-oriented conception of what is important to them, and this makes perfect sense as well: If them playing/promoting poker is not harmful overall, if the total sum of their poker-related activities, including charitable contributions or statements like the one by Victoria Coren for instance, may in fact be beneficial/better than the alternatives, then there are really no good reasons to criticize these life-choices.

Poker does have a dark side that should be acknowledged and thought about. But unlike roulette or slot machines, it is also a highly complex, intellectually stimulating game that can teach players a lot about rationality and mental discipline, skills which can be applied to many other areas in life, including – and this is where REG comes in – the pursuit of altruism. Poker itself is a zero-sum game, but what poker players make of it with their lives as a whole is an entirely separate question.

References

[1] European Gaming and Betting Association. Problem Gaming Fact Sheet.
[2] Productivity Commission Inquiry Report, Gambling, Vol 1, 2010.
[3] British Gambling Prevalence Survey 2007.
[4] American Gaming Association. Casino Expansion and Its Impact on Pathological and Problem Gambling Prevalence Rates 2008.


33 thoughts on “Poker’s Effects on Society – Part III

  • Hi Lukas,

    How did you come to linking to bestonlinegambling.com? All your outgoing links appear to be of high quality, yet this one goes to a weak affiliate site with somewhat unexpectedly low quality content.

    Can you explain where this link is coming from? Is REG being compensated for this? Is someone being compensated? Is this a website owned by someone close to REG?

    • There’s no compensation and as far as I know no affiliation either. I was looking for an article that explains, in layman’s terms, why poker isn’t gambling. (The matter is so trivial that it’s hard to find a “high quality” article on it.) I thought the content is good, but I agree that the layout of the site looks unimpressive; besides, it’s probably smart to generally not link to sites that are selling something, if it’s avoidable. So thanks for the feedback, I’ll edit it next time I’m going through the blogposts.

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