Freakonomics: Poker Is Skill, Not Luck

Pros have drastically better return on investment

By Kevin Spak,  Newser Staff

Posted May 24, 2011 2:37 PM CDT

(Newser) – With the US cracking down on online poker, Freakonomics co-author Steven Levitt has published a study demonstrating that it’s a game of skill, not a game of chance. That’s a major distinction, because games of chance are forbidden as gambling under state and federal laws, whereas games of skill aren’t, the Chicago Tribune explains. Levitt, a major poker aficionado, analyzed World Series players the same way investors analyze stocks, and discovered that top pros boast a drastically better return-on-investment.

Highly skilled players earned more than 30% back on their initial investment on average, whereas all other players lost an average 15.6%. That’s far too large a gap to be explained by random chance, Levitt and his co-author conclude. Many other studies have come to similar conclusions, but courts keep on ruling that poker is gambling anyway. “Levitt’s study will have no more influence than any of the other 20 such studies out there,” one lawyer predicts. (Levitt isn't the only numbers guy who like to play poker.)

John Racener, left, and Johnathan Duhamel, right, compete in the World Series of Poker in Vegas last year.
John Racener, left, and Johnathan Duhamel, right, compete in the World Series of Poker in Vegas last year.   (AP Photo/Isaac Brekken)
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