Dutch Academics: Poker Is A Game Of Skill

Academics at the Erasmus University in Rotterdam's School of Economics have written a paper that claims that poker is a game of skill.

The paper was written by Associate Professor of Finance Martijn J. van den Assem and PhD students Dennie van Dolder and Rogier J.D. Potter van Loon, who analyzed 415.9 million hands of poker spanning low, medium, and high stakes.

The paper reads:

"A major issue in the widespread controversy about the legality of poker and the appropriate taxation of winnings is whether poker should be considered a game of skill or a game of chance."

"To inform this debate we present an analysis into the role of skill in the performance of online poker players, using a large database with hundreds of millions of player-hand observations from real money ring games at three different stakes levels."

"We find that players whose earlier profitability was in the top (bottom) deciles perform better (worse) and are substantially more likely to end up in the top (bottom) performance deciles of the following time period."

"Regression analyses of performance on historical performance and other skill-related proxies provide further evidence for persistence and predictability. Our results suggest that skill is an important factor in online poker."

The paper is currently in the draft stage and was written to settle the long standing debate as to whether or not poker falls into the realm of gambling as a game of pure chance.

Some of the observations noted in the paper are:

• "A player who is in the top ten percent in a given six-month period is more than two times as likely as other players to rank among the top ten percent in the next period. A top one percent player is more than 12 times as likely to end up in the top one percent the next period."

• “Players who are characterized by a tight and aggressive playing style generally perform better than their loose and passive opponents. Performance is also related to the number of hands that subjects have played over the previous period: more frequent or experienced players achieve better results."

The entire draft can be read at: http://ssrn.com/abstract=2129879