How Poker REALLY Works

In the United States, the game of poker has been popular since the Old West and maybe even earlier than that. Richard Nixon used funds from poker winnings to fund some of his earliest political campaigns. Amarillo Slim was a professional poker player who was one of the earliest poker celebs on television.

But it wasn’t until the poker boom from 2003 to 2006 that poker REALLY took off.  Texas holdem was the order of the day, and the size of the internet poker market doubled annually.

Of course, internet poker launched in 1998, the same time the movie Rounders came out. The build-up to the poker boom was well-established, but it didn’t skyrocket until Chris Moneymaker won the World Series of Poker.

The boom is largely over, partially because the passage of UIGEA had a chilling effect on websites offering internet poker to United States players.

But poker is still more popular now than it ever has been.

But how many poker players, especially new ones, understand how the game REALLY works?

This post offers answers to common poker questions and dispels some common myths and misconceptions about the game of poker in all its variants.

First, Let’s Talk about “the Rake”

Casinos and cardrooms don’t offer poker rooms to the players for free. They want to make some money off the arrangement. They do this by taking a small percentage of each pot—usually around 5%.

What does this mean for the average poker player?

It means that if you play long enough, you’ll eventually lose all your money, even if you’re just as good at poker as everyone else.

Let’s use a heads-up poker situation as an example. You both sit down with $1000. You and your opponent are equally skilled (exactly, for the purposes of this example.)

You play 30 hands per hour, and he wins half of them. You win the other half. The average size of the pot is $100.

On 15 hands, you win $95 each. You put $50 into the pot, and so did your opponent. Of course, on the other 15 hands, you put $50 into the pot and lose.

That’s $1425 in winnings, but you put $1500 into the pot that hour ($50 on average each hand).

At this rate, you’ll lose $75/hour until you run out of money.. And so will your opponent.

Now you’re seeing $1615 per hour in winnings when you were only risking $1500. Your opponent, on the other hand, is losing money even faster. You’re out-playing him.

To become a winning poker player, you not only must be better than the average player at your table, you must be good enough to overcome the rake.

Where Does the Money Flow from at the Poker Table?

The money at the poker table, obviously, flows from the less skilled players to the more skilled players.

But this happens over the long run, not the short term. In any given hour, or even in a session that lasts multiple hours, you might see a run of good or bad luck.

Mathematicians call this “variance.” It’s the tendency for random results to be unpredictable in the short term. The Law of Large Numbers suggests that over a sufficient number of trials, the actual results will start to resemble the mathematically predicted results.

This is where the pros make their money. They take advantage of small advantages repeatedly. If you keep putting money into the pot when you have the best of it—a positive expectation—and if you play long enough, you’ll almost certainly eventually walk away from the poker table a winner.

So the money flows from the weaker players to the stronger players, but it happens gradually.

The poker rooms don’t care too much about this aspect of the game. They’re making their money regardless of who at the table is winning or losing. The only time they care is when there are so many “sharks” playing in their rooms that the action starts to slow down.

As long as players are sitting at tables putting money into the pot, the casino or cardroom is making money.

How Do the Experts Become Experts?

At one time, people became experts at poker just via experience at the tables. I’m skeptical of that being an effective approach to becoming a winning poker player in today’s environment. Too many players are taking advantage of the many learning opportunities available to aspiring poker pros.

I suggest you start by learning a single game really well—Texas holdem is the obvious choice. You can start by reading any well-written tutorial on how the game is played. Hold’em Poker by David Sklansky is as good an introduction to the game as any you’ll find, in fact. You can buy a used copy for as little as a dollar or 2 online.

One way to get some experience in how the game-play flows is to try one of the many free Texas holdem games available on the internet. These games allow you to play with the equivalent of “Monopoly money.” The players at these tables will be far looser than the players you’ll see playing with real money, but that’s okay. You’re using these free money tables to get a good feel for the nuts and bolts of how the game is played.

In Texas holdem, the most important skill is being able to look at the board—the community cards—and recognize the best possible hand that goes with that board (i.e. “the nuts.”)

If you can’t do that, you can’t win at Texas holdem in the long run. That skill is that essential.

The other important skills include knowing when to bet and raise (often) versus when to check and call (seldom). It’s also crucial that you understand when and how to fold. Money saved in Texas holdem is just as valuable as money won.

The book includes a great introduction to basic gambling principles that every gambler should know, then it moves on to discuss how to play effectively preflop. This includes a discussion of the different categories of preflop hands you might be dealing with.

The book moves on to discuss post flop concepts, like outs, made hands, and drawing hands. It goes ont to discuss appropriate strategy on the final 2 betting rounds, especially on the river.

The appendices are especially valuable, as they include quizzes on how to play various hands. This is a great learning tool to help you figure out how to apply the concepts you’ve learned to actual situations which might come up during play.

After that, there really is no substitute for experience.

But you can get more from experience if you have a coach or tutor of some kind helping you learn faster. You can find such mentors online. They’re not cheap, but the best of them will railbird with you while you play and offer you advice on how you played your hands.

Once you’ve become proficient at one form of poker, it’s time to branch out and learn other games. Omaha is increasingly popular these days, but you can still find some action at some stud tables, too. I like Omaha because a lot of players are really bad, which gives you more of an opportunity to profit than most other poker games.

The Life of a Poker Professional – It’s Not Easy Money?

If you think you might want to play poker for a living, you might reconsider. 90% of the people who play poker are long-term losing players. And, of course, if you’re one of the 90%, you’ll have a hard time making a living as a poker pro.

I had a good friend who played online poker professionally for a few years. I asked him how that worked, and he explained to me that he had 5 figures in winnings 5 months out of 6, but once every 6 months or so, he’d have a month where he lost 6 figures.

And he was really good. This was his living.

If he didn’t have enough money set aside to fuel his action, he wouldn’t have been able to play professionally.

So those are the 2 things you need to consider first.

• Do you have a big enough bankroll to play professionally?
• And are you skilled enough to play professionally?

The guidelines I usually see for bankroll sizes are these:

If you want to play in tournaments professionally, you should have at least 200 buy-ins in your bankroll. This means you’re never putting more than 0.5% of your bankroll into a tournament buy-in.

If you’re playing in tournaments with a $50 buy-in, that means you need a bankroll of at least $10,000.

If you’re playing limit holdem, you should have at least 300 big bets in your bankroll. If you’re playing in the $4/$8 game at the Winstar, for example, you need a bankroll of $2400.

If you’re playing no limit holdem, you should have at least 50 buy-ins. If the buy-in at the level you like to play is $100, you should have a bankroll of at least $5000.

I should point out, too, that just having a sufficiently large bankroll isn’t enough to become a poker pro. It’s a necessity, but it’s not the only one.

If you’re not skilled enough to win consistently, you’ll still go broke, no matter how big your bankroll is. And how do you know if you have the skill level that it takes for that? You must keep detailed records.

This means recording how many hours you spend at the table and how much you’ve won or lost at those limits. You’ll need lots of data to have any confidence in it. I’d suggest keeping records for a year and using that data to decide whether you have what it takes to go pro. (And I’m assuming that you’re spending a significant amount of time at the table, too.)

How Much Money Can You Make as a Poker Professional?

Daniel Negreanu suggests that you think of yourself as a small business owner, because that’s in effect what you are as a poker pro. This means you need to set revenue targets for yourself. You need to keep detailed records, pay your taxes, and account for your lifestyle.

You should start by thinking about how much money you want to make annually. Some younger people might be able to live on $50,000 a year, but that’s not sufficient for a middle-aged man with a family in most areas. The cost of living is just too high.

If you assume 50 work weeks in a year, you’d need to play poker 34 hours per week to earn $50,000 per year.

That sounds better than a full time job, for sure, but it’s still a lot of time spent at the table playing poker. A lot of poker players just aren’t up for that much time at the table.

In fact, you need another quality to make it as a professional poker player—insane amounts of self-discipline. If you don’t have that, you won’t be able to make it as a poker pro. There’s no way to get around it. If you want to earn money playing poker, you have to be willing to put in the hours.

Finally, if the math I used to calculate how much you needed to play to earn $50,000 a year seemed like too much to you, poker might not be the game for you—just sayin’.

Conclusion

Poker is a great game, and sure, some people make a living at it.

But the casinos and the cardrooms are the ones making the most money from the game. That 5% rake that they take out of the pot would ensure that everyone were a loser if it were just a game of pure chance.

If you want to succeed at poker, you need to think about your goals. Not everyone wants to be a pro. Some people are happy to just play well enough to break even and have a good time. If you do want to be a pro, get ready to do some hard work and exhibit some serious self-discipline.