The angle is this:

If you are shutting down poker under these premises, you should shut down stock exchange market as well.

As someone pointed out earlier ITT, there's an explicit exemption for the stock market. Other than that, yes, it would seem the DOJ agrees that poker, sports betting, and the stock market are all on about the same level as far as the definition of gambling is concerned.

As Ike said, the markets by definition aren't unlawful because of they are specifically authorized, but additionally it's not like a trading firm was never shut down for violations of the law - I'm sure there are even examples where money laundering and/or bank fraud were the violations.

The idea that poker is being singled out and players are the victims of the government is just a myth perpetuated by lobbying groups.

I wouldn't go quite that far. There is no internally consistent, principled position the government could claim to hold which would justify their treatment of poker and other endeavors in which money is risked in contests of skill and chance. In that sense, poker players are victims of an abuse of government power to serve corporate interests over the interests of individuals or ethical principles.

Financial markets are regulated the way they are because that's what financial institutions want. Online poker was cracked down on because that's what the gaming lobby wanted, and now it's going to come back on their terms.

To come at my luck vs skill point a different way, let's try this:

Is it theoretically possible to come up with a game that involves luck and skill in which skill does not predominate? How would you identify such a game? Can you come up with a concrete example?

If there cannot be such a game, how is the predominance test meaningful?

That's just taking the myth and spicing it up with a conspiracy theory, the markets are regulated for the same reason poker is (supposed to be) regulated, to keep the gambling fair and protect the consumers.

To think that congressmen whom are re-elected every two years had some six year plan to aid the big casino lobby by getting rid of online poker is absurd, big casinos were backward thinking pushing congress to specifically outlaw internet gaming back when the UIGEA was passed, they weren't trying to grab the internet market for themselves.

Congress didn't give the casinos what they wanted but rather a compromised bill that would just make it difficult to deposit money so drunks, fools and kids can't grab their (parents) credit cards and put their family in debt.

I know this is a terrible violation of our liberties, but similar restrictions on commodity trading curb people from bankrupting themselves buying options.

American still have the opportunity to play poker, it's just difficult to deposit and you can't play on the sites that thumbed their nose at the law, and as long as people continue to play it will eventually be regulated for just that reason, not because poker lobbyists proved it was all skill nor because casino lobbyists bought enough votes.

Seems to me the big casinos are getting exactly what they wanted from the beginning. FTP and Stars had the US market crushed. The casinos had to get those sites shut down before creating a situation where they can make an attempt at taking over the market with the help of some socialism.

I can't answer the question, but the DOJ themselves concede that even if there is 1% skill 99% luck in a game, that over a large enough sample the more skilled player will come out ahead.

We've won the poker is a skill game argument, the government conceded so we can move on to important issues like whether lying to a bank is bank fraud.

While I agree with much of this post, please note that luck does not even out in the long run.

Mason

The casinos are currently in a good strategic position going forward, but back in 2006 they saw internet gaming as a threat rather than an opportunity.

Casinos were in deals with Poker Stars and Full Tilt right up until BF, why would they be doing that if they were in on some conspiracy all along to have these companies shut down?

No. In poker, there's always a skill element (positive or negative) and there is always a luck element. The important question is how long do you have to play before the skill element begins to dominate the luck element?

Best wishes,
Mason

No. In a game like tennis, which I have been playing for close to 50 years, the short term luck factor is small relative to the skill. The opposite is true for poker, and comparing results of a top poker player to those of a top tennis player is not accurate.

By the way, as I'm sure you know, I have been a critic of the skill game versus luck game argument that the PPA has used in the past. A good statistician who also understands poker/gambling would quickly chew up what you have written here.

Best wishes,
Mason

The variance in a round of golf is probably 8 shots just from the randomness of bounces, lip outs, etc. If you look at the top 100 golfers the top player might only be 2 shots better per round over the course of an entire year from number 100. On the minitours players put up most of the purse and virtually anyone in the field can win in a given week.

How is that wildly different from a poker tournament? If you play enough poker you will get a pretty accurate idea who is best but it can take a very long time. The long run in golf is a long time as well. Luck doesn't even out over the course of a career. There is even a great deal of randomness to who to who ultimately makes it on tour.

Their argument that sports betting also has an element of skill implies that any monetary investment with an element of luck should be illegal, yet they havent shut down eTrade or any of the stock websites.

no one can argue that gambling on stocks isnt wildly variant. It takes literally YEARS for good investors to break out ahead. Warren Buffett, the unquestioned best investor in the world has lost TONS of money since the recession started.

I lifted the following assertion (verbatim) from the Government's response to Elie and Campos motion to dismiss.

<begin quotation>

The second dissimilarity argued by the defendants – that in the listed games, unlike poker, the house bets against its players – is also inaccurate. With respect to poker, the house earns money primarily through the so-called “rake” – taking a small percentage of each pot – which, cumulatively, at least in the case of internet poker, typically results in the house taking approximately 1/3 or more of all funds deposited by players on the poker website (a high transaction cost that impacts returns available to bettors over time).

<end quotation>

Here is what has me really confused about the Government's assertion with respect to rake. First, how do they arrive at this 1/3 figure, and second, if the cumulative amount of rake charged does in fact equal approximately 1/3 of all deposits; then how does anybody (other than a very small percentage of online players) beat the game? I would think that if the cumulative total of rake, as the Government asserts, was indeed that high; then the "poker companies" would be making a lot more money than what is being reported.

Even in "live" brick and mortar cash games, the rake is high - certainly higher than online poker rooms - but I don't believe B&M rake exceeds ten percent (except maybe at some Indian casinos) and it certainly doesn't exceed 15 percent. If I'm sitting on a jury hearing this case, the Government is going to have to show some solid "proof" that the rake charged in online poker rooms is as high as 1/3 of all deposits. Not that this "rake argument" has that much to do with bank fraud, money laundering, and UIGEA violations; but if the Government makes an exagerrated claim like that [about rake] and the defense pokes holes in their argument, then I'm suddenly wondering about all of the Government's other assertions. It's the old lawyers truism to the effect of: "If I can catch my opponent in one lie or one misrepresentation of a material fact, then that calls into question all of their representations."

I'm very curious as to just how the Government calculates that up to 1/3 of all deposits wind up in rake?

Former DJ

Former DJ - rake is paid over and over on the same money. If you are a break-even player before rake then eventually you pay 100% of your deposits in rake, not 1/3.

The 1/3 figure means that winning players remove from the site about 2/3 of what is deposited on the site. I think the DOJ easily has enough processor data to determine this.

Now do you see? Most estimates actually have about 30% of all online players being net winners (see sharkscope etc).

I agree the luck vs skill argument is extremely weak and, it conduces nowhere. Why not just assumming poker is a game of skill (because it is, amirite?), and then move onto comparing it to other economic activities where there is an element or randomness involved (like the stock market). Fighting the fight on that arena would be much more productive imo.

My guess is:

1 - sum(all balances)/sum(all deposits)

Winners will always be the the minority in zero-sum games + rake/commission. Zero-sum game almost implies a game of small edges, most of which will be washed away by rake/commission.

Do you have stats? Don't have access to my HEM atm, but from what I remember online low stakes 6max contributed rake is around 5-6bb/100, so the site is making 5-6bb/100 per player! To put things in perspective, I consider anyone winning at 6 bb/100 to be a strong player for his stakes (over a good samples of course), so contributed rake for him is at ~50%. Rakeback+bonuses will give 1.5-2 bb/100.

Don't be fooled by "we rake $0.01 for every $0.20 in the pot + no flop no drop."

How do you check this? I want to know. The rake where I play is $0.01 every $0.20 up to $1 USD. Is this enough to calculate the bb/100 the house takes or should I further check my HEM logs?

edit: nvm, I'll just divide the rake paid, divide it by number og hands and the multiply per 100, lol.

spadebidder:

OK, I see your point - and it makes sense. But this math brings into question why any of the casino games (other than blackjack and poker) are legal in the first place? It is a well known fact that no player - skilled or unskilled - has a positive expectation against any of the table games such as craps or roulette. The absolute worst of all are the various state lotteries which amount to virtual theft from people who can least afford to gamble. In fact, that's what lotteries actually are: Government sanctioned theft.

It's baffling why Government sees fit to go after poker (and poker players) while simultaneously pimping lotteries.

Former DJ

FT had the cap at $3, so your rake figure should be lower.

I'm don't know how HEM 2 works, but in the first HEM, it would record the total contributed rake in the sessions tab. Take the total, convert it into big blinds, divide by the total # of hands, multiply the result by 100.

Just did that, and the room where I play takes 9.9bb/100 from me. I play micros 6-max.

Wow.

6max?
Rake paid, or contribute rake?
How many hands?
If you don't mind me asking, what's your VPIP?

Not sure dealt or contributed, but Party. 36k hands. My vpip is 24.5.

Double checked the number and it is correct: 9.9bb/100 in rake.

Worth saying tho that I play NL4, so I guess we are the one who suffer the most rakeage.

Not sure if it makes a difference but my winrate is 10bb/100 and 11bb/100 ev adjusted.

I should be optimistic, apparently, because once I move to NL10 games will have the same rake structure so I guess the bb/100 paid in rake will diminish.