She has the most annoying voice ever.

So much this. Not sure how you get away with it without getting ganged up on and temp banned for pointing out the obvious like I do. :> .....OP and other complainers are so sanctimoniously slimy it’s hilarious

Pokernews reporters are sycophants until you deny them access, then they write essays on why you’re a scumbag.

30s in - every dollar is worth tree-fiddy - white magic at work here!

They actually might technically be securities (which would be subject to securities laws and under the SEC's regulation), but so far no one has ever really seemed to care about it (including the SEC).

I'm pretty sure that in the past some large staking operations that contemplated pooling money from many different individual investors and Michael McDonald with the "Bank of Timex" thing that has turned into being Pokershares now considered exactly that and the legal issues surrounding it (I think).

The following is a piece of my outline from a Securities and Market Regulation class that I took in law school like 9 years ago (I'm not really involved in this area now):

I. What is a Security? (do security laws apply?)
____A. Investment Contracts (catch all provision)
________1. SEC V. Howey page 91: Howey Test: A contract, transaction, or scheme is an investment contract and security if:
____________a. Invest money in a common enterprise
____________b. Is led to expect profits
____________c. Profits come solely from the efforts of another
________2. Determining the Howey Test factors
____________a. Common Enterprise: SEC v. SG page 101: Horizontal commonality satisfies the test. (a pooling of assets from multiple investors in a manner that all share in profits and risks of enterprise)
_________________i. Is it a standard form contract? No bargaining power? Everyone gets the same thing?
____________b. Led to Expect Profits:
_________________i. United Housing v. Foreman: Profits means either capital appreciation resulting from development of the initial investment or participation in money earnings resulting from use of investor’s funds.
_________________ii. What form of profits: SEC V. Edwards page 116: An investment contract can have a variable or fixed rate of return
____________c. Solely from the Efforts of Another (Limited partnership interests are presumed to be securities unless the limited partners exercise effective control over the enterprise)
_________________i. SEC v. Merchant Capital LLC page 120: Solely dependent on others not interpreted literally; may be investment contract even if purchaser has some nominal involvement with operation of business. Focus on dependency of investor on skills of another party. Williamson Test Guide [not exhaustive) analyze expectations (how did promoter represent this) of control at the time the interest is sold (but can look at how actually operated to answer this question); as evidentiary matter can look at how enterprise actually operated to determine how control was allocated]. Is investment contract if:
_______________________AA. Agreement among parties leaves so little power in the hands of a partner or venturer that arrangement in fact distributes power as would a limited partnership.
_______________________BB. Partner or venturer is so inexperienced and unknowledgeable in business affairs that he is incapable of intelligently exercising his partnership or venture powers; or
_______________________CC. Partner or venturer so dependent on some unique entrepreneurial or managerial ability of the promoter or manager that he cannot replace the manager of enterprise or otherwise exercise meaningful partnership or venture powers.
_________________ii. SEC v. Life Partners
_______________________AA. Pre-purchase services cannot suffice to make profits arise predominantly from efforts of others (doubtful they ever count for much)
_______________________BB. Ministerial functions receive good deal less weight than entrepreneurial activities
_______________________CC. Matter of chance does not satisfy solely by others test. Major factor for how much made from investment here was when someone died while investor and promoter did nominal work and this caused money gain (insurance policies involved). RULED: Not a security.



Are you talking about publicly traded securities on an exchange? It's different.

$1,000 buy-in tournament.

Horse has a true ROI of 30%.

Horse sells 10% to Staker at a 1.1 markup, so Staker pays $110 for it. Horse pays other $890 of buy-in.

Horse's expected payout based on 30% ROI = $1,300.

Horse gets $1,170.

Staker gets $130.

Therefore:

Horse makes a profit of $280.

Staker makes a profit of $20.


+EV for both parties.

Except there’s no such thing as true ROI on live donkaments so u forgot to add /BHMDHL

Of course there is. It is just extremely difficult (basically impossible) to determine except within a certain range (which may be a significantly wide range) and even determining that may be very difficult.

It was just an example to illustrate the math of how both the "Horse" and the "Staker" could make a profit. I made up and assumed a number for the true ROI for the purposes of the example.

What does BHMDHL stand for?

The potter who likes to dress up in women's clothes?

Dunno why he thinks his stats from 25 yrs ago matter. In todays games its robbery because he cant compete with those guys. ESPECIALLY in turbos, he cant even play a 10 bb stack correctly, hes a underdog in the tourney, hilarious.

I somewhat agree, but in this case, or in any case really, the true EV is unknowable, and this variance drives the markup price. It's not creating EV.

Horse sold EV of 30% for 10%. -EV

Only -EV if the horse could afford to play without selling.

its still -ev but it might be +eg

We're getting trolled. Don't waste the time. Of course it can be profitable for both parties and they know it.

I find this much backlash surprising. 1.8 is obv a -EV investment, but people pay more than they need to for a lot of things. Helmuth is selling a product and he can charge whatever he wants for it.

As for turning up late, I can see why people think this is scummy, but Phil regularly plays tournaments this way. If he genuinely thinks that this is the most +EV way for him to approach a tourney, then turning up earlier to play the entire tourney, simply because people had invested large amounts, would be going against their best interests (in his mind)

You wouldn't expect him to play his hands differently due to the amount of money invested in him, so why would you expect him to change the way he approaches the tournament itself? Being mentally prepared holds a lot of importance when taking on a multi-day tournament, so even if turning up late only benefits Phil psychologically, he would still feel that it is his responsibility to his investors to stay true to that.

Well said. I agree. What Phil's doing isn't very ethical, but calling it a scam is just dumb and hypocritical.

EVERYONE knows Phil buys in late. It's not like he suddenly started doing that when he took backers. Maybe he does it because of sleep problems or whatever. Maybe he does it because he thinks he's -EV super deep but +EV shallow and his ego is too big to admit that. Or maybe he believes being "fully rested" makes him play better especially when he joins a table against guys that are more fatigued/have been playing a little longer (I've personally started contemplating that line of thinking).

Its different when the product's effectiveness is dependent on the price. For something like orange juice, its still orange juice if its $3 or $6 or $10. For financial products it doesn't really work that way, if an investment's price is too high it no longer works as an investment (since you can't make money EV wise), so its arguably fraud if you sell it as such.

Its as if somehow raising the price of orange juice caused it to turn to water at $6, and sewage at $10. Phil Hellmuth is basically selling sewage as orange juice. Its not just water, its something actively bad for his customers.

What if it's just because he likes the attention?

There's a difference between buying in late and arriving late. Hellmuth did the latter. He blinded out a bunch in the meantime. If you get a full stack when buying in late (as you do online) then it can be more +EV, yes. If it's set up the way the SHR was then it's literally never more +EV to arrive late than when the tourney starts. Even if you are -EV in the early stages then you could just wait and open-rip aces and fold everything else instead. Also, the table will play slower if you're seated there (even just folding 99%), leading to you being less -EV due to blinding out slower.

There's no excuse other than thinking your personal time is worth more than sitting at a $300k buyin table. Which he apparently thinks. In which case there's no excuse to even be registered.

I think you are arguing about two different things. You are saying you can both be profitable. But I think the other guy meant by selling below your roi, even if you still are +ev overall, your ev will be lower than if you didn’t sell any action(assuming you can afford the whole buyin with no backers, which Phil helmuth can). So the deal isn’t gaining ev for both players, one is gaining value and one is losing ev, even though both are still profitable.

The thing is, if you don't need to sell action because it is within your bankroll then you don't sell because yes, any markup that is lower than your ROI is costing you money. However, if you're able to play higher due to selling action at a markup then you're more profitable than you otherwise would be.

Yes it is -EV to sell action when you don't need to, but that is not the case for any rational human being. Obviously Hellmuth isn't one of those and not only does he sell action for a donkament he should be completely able to afford, he does it at an insane markup.

Yeah, but in reality buying a piece of someone is gambling.

You have -EV playing the lottery as well and lottery tickets are absurdly priced, it doesn't make it fraud though, because there's a chance you could still win

If the Horse couldn't/wouldn't (for reasons other than EV) play without selling a portion, then if Horse does not sell such portion, his overall EV is $0.00. If this is the situation, I think you are comparing the wrong numbers.

If the Horse would play without selling a portion, then by selling a portion at a markup less than true ROI the Horse is losing EV, but is gaining in other areas that may or may not be significant depending on the circumstances.

If seller A is someone who always tries his best to make sure investors pay a markup where they get at least half of the expected ROI and seller B is someone who takes the money and runs, this is situation is somewhere in between. It's closer to A than B, but it's definitely unethical and Phil should treat his fans better than that. It could easily be true that buying Phil at 1.8 and buying a scammer at 1.0 is the same EV. Think of the kind of people that buy his pieces, a lot of them won't know well how poker/different tournament structures/buying pieces & markup work because they're not professional poker players.

He's using data that has very little to nothing to do with the piece he's selling and presents it as evidence that it's worth the price. I'd have no problem with him quoting those stats if he sold action for his WSOP main. It's difficult for me to understand someone with clearly above average intelligence isn't consciously misleading people here, but I'm going to give him the benefit of the doubt and say he is just completely deluded and clueless about basic math. Still, when someone points out some basic facts that prove the errors in his reasoning, the appropriate thing would be to refund some of the excess markup or something. It's not like he asked for 1.2 here, which would still be silly in a tournament where he's somewhere between -EV and slightly +EV. You'd literally have to see your opponents cards to have a 80+% ROI in a tournament with such a flat pay-out structure and fast blinds.