Why is this bad? And what's the point of chip dumping to someone when you can simply send them the money (through the user interface)?

Its a problem in tournaments

For example, say it's a 10 person sit-n-go. Person 1 dumps ALL their chips to person 2. They now have double the chance of winning -- in theory. Make sense?

It is also used for money laundering.

Also imagine someone breaking into your account, sitting down at HU table and dumping your bankroll to his friend.

Not really, because they have also paid twice as much.

I got curious and tried to do the math. Consider a 10-person 10+1 SNG with payouts 50-30-20. Suppose that we have two seats in the tournament. If we don't chip dump, our expected payout is clearly 20. If we dump one of our stacks onto the other right at the start at the tournaments, I would say that the expected payout is

2/10*50+8/10*(2/9*30+7/9*(2/8*20))=18.444...

So if I'm right, chip dumping is a bad idea. Our EV is 1.56 less than if we choose not to.

Here's the explanation of the calculation. (Let me know if I'm wrong). Since we have 2/10 of the chips in play, we have a 2/10 chance to win. This means that 8 times out of 10, we will not win. Those times, we have 2/9 of the chips in play that don't belong to the person who will eventually win. So there should be a 2/9 chance that we will finish second. 7 times out of 9, we will do worse than that. Those times, we have 2/8 of the chips in play that don't belong to the two that will finish first and second, so we should have a 2/8 chance to finish third.

This month's results at Ongame 1/2 NL 6-max are somewhat entertaining and relevant to this thread:

http://www.pokertableratings.com/ong...s-month/1-2-NL

In case it has changed by the time you click on it,

What I should have said is that this particular chip dumping strategy is a bad idea. You could perhaps increase your expected payout by making small donations from the big stack to the small stack, to prevent the small one from being eaten by the blinds. This would however be difficult to do with ten people at the table.

Yeah, you're right in this example. Do it with a 45-man or 90-man sng though.

Do you have a specific situation in mind? If it's done right at the start, the conclusion will be the same.

Expected payout without chip dumping = 20

Expected payout with chip dumping < 20

The calculation would be much more complicated when many more people are getting paid, but the same general principle applies: If you can double the probability of each in-the-money position, then the expected payout will be exactly 20. The early chip dump strategy doubles the probability that you will win, but less than doubles the probability that you will end up in some other in-the-money position.

So if we ignore the rake, an early chip dump will be a 0 EV strategy in a tournament where all the money goes to the winner, and a -EV strategy in a tournament where more people get paid.

If you quickly get a big stack and use it right, you can often bully your way to top places in tournament, by stealing blinds and using FE. Some tournament players (I think Negraneu is one of them) prefer to play fast early in the tournament expecting to quickly bust or double up. This way they can play aggro entire toruney and hopefully win. They hate playing with shortstack for hours just to bust on the bubble.
So that's why chipdumping might give you a better chance to win or at least finish high. Of course it is not good for SNGs but for MTTs.

That's one strategy. The other uses the fact that deep in the tournament chips do not have equal value. Their value changes depending on your stack size. So if you enter big tourney with 10 buddies and some of you get lucky and stay to the late stages, you can use chip dumping from the big stack to smaller stacks to increase everybody's chance to finish in the money.
I think this strategy is less optimal, since by just getting in the money you will probably win back your entry fee, while winning the tourney or finishing in top 5 means huge prizes.

It's obvious that the OP is asking about cash tables, not tournaments. You can't transfer tournament chips through the UI. duh!
/derail

I don't know if OP has encountered 888/LuckyAce/Cassava's unusually aggressive and usually false accusations. I, too, have wondered about their rationale. In many instances, the amount of the "illegal transfer at the tables" was too small to warrant action, even if it truly was chip dumping.

The particular incident described in this thread http://forumserver.twoplustwo.com/28...mping-1197961/
led me to quit the site. Unless this matter is resolved, I would advise any player to avoid the site. There is no evidence of chip dumping in the hand history and there are many other reasons to doubt the allegation. The unfair way this player has been treated and denied a proper hearing is truly outrageous.

Sure he did and I think I answered this before:
I don't think that discussion derailing into tournament chip dumping is a bad thing if OP's satisfied with the answer but other people continue to be interested in topic.
Anyway, I agree that chip dumping should be clearly proved before sites take any action (old good in dubio pro reo) and I would too avoid any site that might accuse me of chip dumping and steal my money without a trial or proof.
It is too easy to accuse somebody of chip-dumping if you sit down heads up and someone sits down and tilts away his bankroll. Is it your fault to win the money from him?

Nice, some legal Latin. In my correspondence with 888 it was audi alteram partem that I quoted in this context.

Yes, money laundering and account hacking are the two problems that came to my mind, too. However, that doesn't explain the actions that 888 has been taking.

Generally, there is a $10000 threshold before transactions are deemed to be suspicious, but 888 has taken action against transactions of $400 and less. It makes no sense that they would use money laundering as a reason for seizing the winner's entire account balance.

It is nice to know that sites monitor for unusual activities that could indicate that an account has been hacked. However, an essential component in the investigation would be that the loser makes such a claim. The threads that I have found in these forums are all started by winners who have had their winnings seized. A quick-thinking loser might claim that their account was hacked, but more likely they are too embarrassed that their playing was so bad that the site thought they were deliberately losing; besides, they've lost nothing when their busted account is seized.

So... I don't think OP's question has been answered.

Edit: Sorry, I'm mistaken. This thread was actually started by a bewildered loser
http://forumserver.twoplustwo.com/28...olved-1169078/

Chip dumping is bad and am entirely against it because I do not want any one accessing my account in clandestine ways and taking away my money