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BGonline.org Forums
"Proving" Poker is a Game of Skill
Posted By: Alfred Mamlet
Date: Tuesday, 10 May 2011, at 11:53 a.m.
Steve Levitt (the University of Chicago Freakonomics Professor) and Thomas Miles have just published a NATIONAL BUREAU OF ECONOMIC RESEARCH paper. Analyzing data from the 2010 WSOP they identify "ranked" players at the outset (eg top finishers from 2009 WSOP), determine that they have a ROI higher than other players, and conclude this is strong evidence that poker is a game of skill. The determination is of course important for the issue of whether poker (or BG) played online or in person for money is illegal in many US states and whether financial transactions related to such gaming violates the federal UIGEA. Their abstract is below. The full article is discussed and available through the NYT Economix Blog, http://economix.blogs.nytimes.com/2011/05/09/poker-as-a-game-of-skill/
In determining the legality of online poker – a multibillion dollar industry – courts have relied heavily on the issue of whether or not poker is a game of skill. Using newly available data, we analyze that question by examining the performance in the 2010 World Series of Poker of a group of poker players identified as being highly skilled prior to the start of the events. Those players identified a priori as being highly skilled achieved an average return on investment of over 30 percent, compared to a -15 percent for all other players. This large gap in returns is strong evidence in support of the idea that poker is a game of skill.
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