Poker: skill or luck?

[BigPete33]

Was watching some of the WPT on ESPN last night and the commentary on one of the players at the final table was very interesting.

Billy Baxter is a pro who's been around for some time. He's in the Hall of Fame and has 7 WSOP bracelets to his name. Whilst impressive, that isn't what was interesting.

This will be old news to some of us on here, but it turns out that Billy went to court (in the US) about taxation on his poker winnings.

Further information from Wikipedia tells us that the view at the time was that it was 'unearned income' (similar to lottery winnings or from pokies etc) and therefore taxable at a rate of 70% instead of being treated as 'earned income' which had a lower maximum tax rate of 50%. Quite harsh when you consider that at the time, to Billy this meant an additional US$178,000.

Initially Billy refused to pay but on legal advice he did pay and then sued for a tax refund. The case is "William E. Baxter Jr. vs. the United States".

Billy had to demonstrate that his poker career was essentially a trade or business and he was able to do this via the "facts and circumstances test" and the Government then had to concede that the tax rate should be a maximum of 50% and not 70%.

The judge who heard the case ruled in favor of Baxter, declaring "I find the government's argument to be ludicrous. I just wish you had some money and could sit down with Mr. Baxter and play some poker."

The court stated:

[ . . . ] the Court finds that capital was not a meterial [sic]-income-producing factor in Baxter's gaming income. In fact, the Court finds that Baxter's income was derived entirely from his personal services and that the capital he used to finance his poker playing was merely a "tool of the trade." The money, once bet, would have produced no income without the application of Baxter's skills. [ . . . ] it was Baxter's extraordinary poker skills which generated his substantial gaming income, not the intrinsic value of the money he bet.

Because of this case, gambling winnings in the United States can be treated as earned income for federal income tax purposes, depending on the facts and circumstances of the case. This means that in some cases expenses and losses can be deducted from gambling winnings in arriving at the net earnings from self-employment, and that winnings can be placed into retirement funds.

The case of Baxter v. United States is currently being cited by opponents of the Unlawful Internet Gambling Enforcement Act (UIGEA). Opponents of the UIGEA believe that since poker is a game of skill that the act does not apply to online poker sites.

Russia and Denmark have similarly declared poker to be a game of skill. In the Gutshot Poker Club case in England, the court ruled poker to be a game of luck and so subject to the Gaming Act (though this is currently under appeal).






Some of this confuses me as to how it's even up for debate to begin with. There is no one fixed and constant amount or portion of either luck or skill. The amount of either will depend entirely upon the person(s) taking part and is therefore partly fluid. Which of those two factors has the greatest impact is clear - the skill level of the player. A highly skilled player versus a lowly skilled player has little relevance to luck, sometimes almost to the point where it's basically zero luck. If even an American can see this common sense then surely there's hope for the rest of the world!

[bennymacca]

your last point is right pete, but every single game on the planet has an element of skill and luck, just in varying amounts

where the line is drawn is the hard bit

[BigPete33]

Yes exactly.

WHAT line?

It can't possibly be a fixed thing.

[AJG]

I started a thread/poll on this sometime back now, almost the same title to but I think it was 'Luck v Skill', anyway, good post... much better way to communicate what I personally think about the whole luck v skill debate.
imo those you still call poker a game of chance are those who either consistently lose, or dont even know the game to begin with.

As you said, luck can creep into almost any sport, even those where you wouldn't even dream it would.
Tennis: net cord to win a crucial point...
Cycling: bad crash just infront that cyclist had nothing to do with except happening to be just behind it - wrong place and time
AFL: Multiple injuries to key players in a single game...

Another issue, I think, is where luck comes into Poker. Most only think in terms of the cards, but it can come in many other forms. At a large MTT say, your intitial table draw could be lucky or unlucky (same with any sport with a draw like tennis to). Two players could make bad calls giving a 3rd player odds to also chase then hit... Cooler hands etc (although this is somewhat related to cards, but Kings full of Jacks v Jacks full of Kings... unlucky)

Another point is that is the word luck itself really the best to use. Sure, things happen that are both beyond our control, and against the probable outcome, but some people (incuding myself, most of the time) simply define luck as 'taking such occurances personally'...

[Phantom]

If this game was luck then everyone would make the final table the equal amount of times.

If the field is 150 people (as is most freeroll games, so let's stick with that) you would make the final table every 15 games (150 games, 10 ppl make final table each time so on average you would make the final table every 15th game).

So let's look at the facts of the home tournaments - here is a list of the top 5 players
NAME GAMES FINAL TABLES
----- ------- -------------
Aaron 170 33 = final table every 5th game
Trishan 145 33 = 2 final tables every 9 games
Leigh 169 47 = 2 final tables every 7 games
Ben 90 32 = Final table every 3rd game
David 160 32 = Final table every 5th game

At the other end of the table (no names) we have people who have never made a final table - and they have played the following amount of games -> 47, 51, 55, 49, 73, 88(with one final table), 102, 123 (with 2 final tables) & 141 (with 1 final table).

This is not an average distribution if everything was even.

My personal thought is that Poker is 25% luck and 75% skill. If it was 100% skill then it would be more like chess.

[Phantom]

Pure luck = Steve Bradbury.

If someone doesn't recognize the name he was the Australian Skater who was in a speed skating final and running last, the three in front of him all collided and crashed, suddenly Steve was the only skater standing so he went on to win the Gold Medal (Australia's first at the Winter Olympics).

[AJG]

If this game was luck then everyone would make the final table the equal amount of times.

If the field is 150 people (as is most freeroll games, so let's stick with that) you would make the final table every 15 games (150 games, 10 ppl make final table each time so on average you would make the final table every 15th game).

So let's look at the facts of the home tournaments - here is a list of the top 5 players
NAME GAMES FINAL TABLES
----- ------- -------------
Aaron 170 33 = final table every 5th game
Trishan 145 33 = 2 final tables every 9 games
Leigh 169 47 = 2 final tables every 7 games
Ben 90 32 = Final table every 3rd game
David 160 32 = Final table every 5th game

Me 54 16 = FT 1 in every 3.3 games, although I mainly play the buyins, I hav also about 1/6 in the freerolls I have played...

[AJG]

Pure luck = Steve Bradbury.

While i get your point, even this cant be considered pure luck...
He still qualified to be in the race...
Right place, right time...

I dont think pure luck really can exist, as that would be something with 0% probability happening...

[maccatak11]

Pure luck = Steve Bradbury.

While i get your point, even this cant be considered pure luck...
He still qualified to be in the race...
Right place, right time...

I dont think pure luck really can exist, as that would be something with 0% probability happening...

Def agree with you here AJG, Bradbury is probably Australia's best ever winter athlete, and now people consider him the biggest luckbox of all time. It would have almost been better for him to win a bronze medal without anyone falling over..

Does anyone know that he actually won a bronze medal in the 1994 (i think) games in a teams relay? or that he has something like 3 or 4 workd championship medals?

Having said that.
At that olympics, in the quarter finals, someone crashed allowing him to finish second and advance
in the semi finals, he finished third, but some guy was disqualified and he advanced
and we all know what happened in the final

But yeah it annoys me when people associate bradbury with pure luck.

[BigPete33]

As long as people realise it WAS pure luck, but the reference is that specific race, then nobody should really take issue with it. He did luckbox it, end of story.


I'm not much of a fan of the 25% luck 75% skill point of view.

To me, that might be what's considered a reasonable average - and from that perspective I don't disagree. It does tend to get bandied about as a 'this is how much it is between any 2 players' statement though, and I think that's miles off.

Gus Hansen vs Michelle Collins does not = 75/25