Poker: Luck or Skill?

There was a very interesting article in this yesterday's Wall Street Journal about America's recent favorite pastime, Poker.  The question was asked whether or not poker is a game of chance or a game of strategy and skill.  It is clear to me that it involves a tremendous amount of skill to be a very good poker player.  Luck, of course, will always play a factor.  I have a puncher's chance of beating Phil Ivey on a lucky "all in," but if you have ever seen Joes vs. Pros, you know that professional athletes will dominate you EVERY TIME.  Let's be honest.  Could you strike out Barry Bonds?  Once?  Stop Jordan from scoring?  Once?  The answer is no.  You won't.  Not once.

So, if I have a chance against Phil Ivey or Howard Lederer, what makes Poker a game of skill?  Two very good points were raised in the article.  First by Annie Duke, "you can purposely lose at poker if you choose."  It's a good point.  The ability to affect the outcome is present, unlike roulette, or horse races.  Yet, in blackjack you could hit on 21, ensuring a loss.  Does that make blackjack a game of skill?  Hmmm...

The second point was raised by Annie's brother, Howard Lederer, "the vast majority of high-betting poker hands are decided after all players except the winner have folded.  So if no one shows his cards, can you legally argue that the outcome was determined by luck?"  Another great point by the poker superstar sibling.  If no one sees any cards, the cards did not play a role in the outcome.  Thus, the outcome was determined by the betting of the players, clearly a process of skill or strategy.

There are some genuine business concerns over the question.  The recent ban on internet gaming was specifically a ban on any "game predominantly subject to chance."  The whole thing is rather annoying.  Why ban it?  Let it happen, try to put check in place to prevent minors from gambling online, and find a way to tax it.  Everyone wins.

I have a follow up question.  Is investing in stocks a game of luck of skill?

Based on Annie's point, can you intentionally lose?  The answer seems to be no.  So, how does picking stocks involve more skill than picking the winner of the Warriors/Mavericks series?

Comments

[nick danger]

Not sure what your post is about.
1) Is poker luck or skill?
2) Poker should be legalized
3) Stock picking is like poker

If it's about #2, you said regarding the ban on online poker: "Why ban it? Let it happen, try to put check in place to prevent minors from gambling online, and find a way to tax it. Everyone wins."

Not everyone wins: Las Vegas and Atlantic City and all the Indian casinos across the country lose. And with the tremendous amount of revenue they are already sharing with the states, they have the ears of the politicians.

[lamoneyguy]

A) My post is about all of the above. Is that okay?

B) Do LV, AC and Indian casinos lose if on-line gaming explodes? I think not. I live in LA, and have seen an enormous expansion in local card clubs and Indian casinos. Yet, Vegas continues to expand. I would argue that the presence of on-line gaming encourages even more live gaming. Especially in poker. Many people are intimidated by the live game, and dip their toes in on-line. After winning a few hands there, they give it a shot live. Without the on-line version, the intimidated may never grab a seat.

[InaDaze]

I completely agree with LA MoneyGuy on this one. Who cares what the post is about, he clearly touches on all 3 of those points, and his idea about letting it happen and taxing it is interesting and definently something I think the government could work with

[moom]

Trading and investing is just like poker. You can intentionally lose: buy a bunch of money losing penny stocks for example. Buy lots of out of the money options. Getting a decent return isn't so hard though, beating the market is hard. So the distribution of outcomes may be a little different but the basic idea is the same.