What is PokerShares?

PokerShares is a website where users can bet on poker players. The site also offers odds on poker related events and poker props. I noticed recently PokerShares being mentioned by a bunch of people in the poker community including Daniel Negreanu, so below is an initial review of the PokerShares.

It seems like PokerShares offers users the ability to bet using fixed odds on a large variety of poker players in a number of tournaments. It also seems like this is not a marketplace of odds, so users are betting against the house (in this case PokerShares) instead of each other.

I signed up for the site, and new users are required to submit a bunch of personal information such as their name, address, phone number, and e-mail address. This seems like a lot of information to give to some site I’m just learning about, but I submitted the signup forms, and received a confirmation e-mail. After I confirmed my e-mail and logged into the site, a message was displayed asking me to confirm my identity by sending PokerShares a copy of my passport. They warn that if I do not confirm my identity in 14 days, that my account will become inactive.

After logging in, I scroll over to the 2018 WSOP main event page and I can see a long list of players offered. I notice some big names such as Phil Ivey are listed, but they don’t have other players such as Justin Bonomo listed for the WSOP main event.  There are four columns listed in the table of players that users can bet on: their name, markup, price/1%, and % available. Using the price of Adrian Mateos as a guide, he is priced at a markup of 4.3 so his price per 1% is $430, and the book seems to be taking up to $20,000 worth of bets on him. A $10 bet on Adrian Mateos will pay $1,895.35 if he wins. This makes his implied odds = 10 / 1,895.35 = 189.50.  These odds are implying an 0.527% chance that Adrian Mateos wins the main event.

If we assume the 2018 WSOP main event gets 7,000 entrants, then the raw likelihood of Adrian Mateos winning is 7,000. So with odds of 190, it seems pretty expensive to bet on Adrian Mateos?  Is Adrian Mateos that much better than the average player in the field?  Maybe, I don’t know enough about WSOP main event odds to say.

At first glance, the way prices are set on PokerShares seems a bit convoluted, but I can see what they are going for. In poker, its common to invest and trade shares in players (and yourself) as a way to spread risk and raising money, so by presenting the betting as a way of “investing” in shares of poker players builds off this culture. On the other hand, the pricing format kinda obscures the information and makes it a bit more difficult to determine the odds.

If anyone has further comments on PokerShares, please post your comments below in the comments section, I would love to learn more about how this market works.

The Future of Poker

The history of poker is filled with lots of ups and downs. And although the game has been played for generations, the most popular form of poker in America, called “no-limit holdem”, started gaining mainstream appeal after the the annual World Series of Poker began in 1970 at Binion’s Horseshoe in Las Vegas. The WSOP grew steadily over the next few decades, and by 2003, what started as a game for a handful of elite players, was now attracting hundreds of entrants from all walks of life from around the world.

By 2003, the game of poker was still fairly personal. WSOP main event entrants were still mostly populated with career gamblers, rather than your average Joe. But the advent of online poker dramatically changed poker’s popularity and how the game was played. Online poker opened up the opportunity for anyone to become the main event champion, and since the study of poker was not yet academic, much of the most popular poker strategies were still based on personal experiences rather than data.

Online poker changed the poker world. The Moneymaker affect showed us that anyone could become the main event champion. Poker’s popularity soared in the 2000’s because poker became accessible to anyone with an internet connection, worldwide. And live games benefitted from online’s growth too. By 2004, the number of WSOP main event entries climbed to 2,576 and reached a high of 8,776 by 2006.

As the popularity of both online and live poker grew, the study of poker was also advancing. The new technologies that made online poker possible, also fuelled the study of poker as the data generated online gave everyone the statistics and math they could use to improve their game. With the growth of online poker, a way to beat the game became possible and today a computer can consistently beat a human playing limit holdem and will soon be able to beat a human at no-limit holdem.

Today, we are witnessing the rise of bots, computer programs that can outplay their human opponents. How does this impact the game?

Almost all online poker sites such as Pokerstars and 888 discourage and ban bots. This makes sense for them in the short term. A good poker game for a card room is one that generates volume. The game needs both rec players and pros to feed the games, but if the rec players can’t win, they probably won’t play. We’ve already reached the point where rec players lose pretty regularly online. Its almost impossible for online poker rooms to completely ban bots since its a costly technological arms race that drains resources.

But the flip side of tough online games is the continued growth of live games. The 2017 WSOP recorded the third most number of entrants ever, and the trend in live games is up. As we become wealthier, and more experience oriented, I believe the demand for live poker will continue to grow. A nice side benefit of a live poker game is how players don’t need to fear bots. The advantage a computer has against humans at the poker table comes from the raw ability to crunch more numbers. A computer can process many more possibilities in order to determine the best play of every hand. Humans can’t calculate the data fast enough in their heads, so in a live game, they must rely more on instinct, reading opponents, and other types of strategies.

I think the future of poker is one where bots compete online. The online poker games that will have continued popularity in the age of bots are ones that include a greater element of chance, more like traditional casino games that don’t require any skill. Think about the growing popularity of games like “Spin & Go”. In this type of game, bots are subject to the same probabilities as humans with these types of games.  Profit for the online card room can be baked into the random element along with a rake.

Although there may be some growth of online poker from new players going forward, especially in emerging markets, the online market in American & Europe is probably saturated. Rich knowledgeable players from wealthy markets will become increasingly aware of their particular disadvantage online, and so they’ll find other ways to play poker. Live games could see a resurgence. Live poker rooms can attract more players by improving their experience and making poker an entertainment activity that highlights the social elements of the game.

Is there an online poker room that doesn’t discourage bots?  This might be another area for growth. Providing a place where programmers can pit their bots up against each other for real money. A kind of clash of machines. I’m looking forward to it.


Amaya gets offer from Baazov

Amaya Inc shares are trading higher this morning on news of a buyout offer that has been received from former executive David Baazov. The offer is to purchase the outstanding shares of AYA for $24 per share. Although the shares are up almost 15% today, they are trading at $21.05, which is signifigantly below the offer price, which represents the market’s determination of the odds this deal will actually go thru. Baazov’s offer is being backed by a group of hedge funds.

I believe AYA shareholders should reject the offer from Baazov and continue as a public company. AYA should continue developing its online gaming business as there is a lot more work to be done before this business matures.

Baazov pleads not guilty in insider trading charges

David Baazov presumably has a decent lawyer working on his behalf and so they must have done some informed calculations about what his chances would be at trial, and so since Baazov is pleading not guilty leads me to believe that the government’s case against him must be pretty weak.  This trial should be interesting.  It took regulators a long time to search for information and make charges.  I think this plea should be bullish for Amaya’s share price.

Ex-CEO of gaming company Amaya pleads not guilty to securities charges | Toronto Star

MONTREAL-The former head of online gaming company Amaya, two associates and three companies have pleaded not guilty to several securities-related charges following an investigation into allegations of insider trading, Quebec’s securities regulator said Monday.

Amaya Management Buyout?

Amaya shareholders have received a non-binding offer from our CEO to buy the remainder of the company’s shares for $21 per share.  AYA shares are currently trading well below the offer price, which means the market is skeptical a deal will get done.  It seems foolish for Amaya shareholders to sell at this point as there is so much more work and growth to do before realizing the value of Amaya global scale and brand.

PokerStars owner Amaya says CEO proposes takeover

(Reuters) – Canada’s Amaya Inc AYA.TO AYA.O, operator of online gambling website PokerStars, said it received a non-binding proposal from Chief Executive David Baazov to buy the company for about C$21 per share. Amaya’s U.S.-listed shares were up about 22 percent at $12.88 in premarket trading.


Amaya GVC Bwin Sale Update

Could Amaya Gaming be shut out of the sale process for Bwin.Party? Now that GVC looks more likely to bid by itself for Bwin after announcing GVC will raise 150 million pounds by issuing more share to the public and using the proceeds to re-ignite an offer for Bwin.Party. That GVC is considering going alone without the support of Amaya is bad news for Amaya shareholders. GVC seems to be getting good feedback from investment bankers regarding a secondary offering of their shares. This means investors see the benefits of a GVC/Bwin tieup without a Pokerstars connection, which means that one of the main benefits of of teaming up with Amaya (money) seems less important if GVC can raise the funds on its own.

Let’s say that GVC is able to raise money on their own and they beat out 888 for control of Bwin.Party, how will this change the online poker landscape?  Pokerstars would still be the dominant platform, and it would still be cutting into ancillary revenue from its competitors in the form of sports and casino games. But since network effects are so strong in online poker, a buyout of Bwin without Amaya would open the door for even greater consolidation and stronger competitors.  Its possible there could even be a tie-up between GVC/Bwin including 888 down the road.

Lurking in the background is Playtech’s iPoker white label platform, which would still be number 3 in the world by market share.  3rd party white label platforms are gaining more acceptance by operators in the online gaming market as the market matures and barriers to entry from technology and regulation continue to grow. I think iPoker is a bigger threat to Pokerstars than consolidation of smaller platforms as iPoker is a differentiated product.