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SKILL AN ESSENTIAL FACTOR IN POKER

SKILL AN ESSENTIAL FACTOR IN POKER, SAY DUTCH ACADEMICS
 
Analysis of almost 416 million hands of poker underpins "skill" claim
 
Academics at the School of Economics of the Erasmus University in Rotterdam, Holland have furnished poker proponents with a powerful argument that skill is an essential element in the game, and that it is not purely up to chance when experienced players go into action.
 
Associate Professor of Finance Martijn J. van den Assem and PhD students Dennie van Dolder and Rogier J.D. Potter van Loon analysed a stunning 415.9 million hands of poker across high, medium and low stakes and involving half a million players to come to their voluminously documented conclusions in a paper entitled Beyond Chance? The Persistence of Performance in Online Poker.
 
The abstract of the paper reads:
 
"A major issue in the widespread controversy about the legality of poker and the appropriate taxation of winnings is whether poker should be considered a game of skill or a game of chance.
 
"To inform this debate we present an analysis into the role of skill in the performance of online poker players, using a large database with hundreds of millions of player-hand observations from real money ring games at three different stakes levels.
 
"We find that players whose earlier profitability was in the top (bottom) deciles perform better (worse) and are substantially more likely to end up in the top (bottom) performance deciles of the following time period.
 
"Regression analyses of performance on historical performance and other skill-related proxies provide further evidence for persistence and predictability. Our results suggest that skill is an important factor in online poker."
 
The paper, which is currently at draft stage, was motivated by a desire to inform the on-going global debate surrounding the legality of poker and whether it falls under gambling laws as a game purely of chance, or one which has a significant element of skill that places it in another category.
 
Among the observations:
 
* "A player who is in the top ten percent in a given six-month period is more than two times as likely as other players to rank among the top ten percent in the next period. A top one percent player is more than 12 times as likely to end up in the top one percent the next period."
 
* “Players who are characterized by a tight and aggressive playing style generally perform better than their loose and passive opponents. Performance is also related to the number of hands that subjects have played over the previous period: more frequent or experienced players achieve better results."
 
The draft has been submitted for academic review and publication, but the authors are receptive to comments on the document.

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