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.

WSOP November 9, Does Chip Count Matter?

Chip stack is an important weapon in poker, but how much does chip stack impact the likelihood of wining a poker game?  There has been a ton written about this subject of poker.  We might find some clues by analysing the chip stacks of the November 9 in 2014 to their wagering odds.

The table below shows each player in the 2014 November 9 with their % of the total chips left in play in one column, and another column showing their respective % chance as implied by their waging odds on Betfair.  The betfair % odds were calculated using the backing (offer) price, so they add up to about 107%.

 

Name % Stack % Betfair
Jorryt van Hoof 19.14% 20.00%
Felix Stephensen 16.35% 18.18%
Mark Newhouse 12.97% 14.29%
Andoni Larrabe 11.25% 14.29%
Dan Sindelar 10.57% 10.00%
Billy Pappas 8.73% 7.14%
William Tonking 7.51% 6.90%
Martin Jacobson 7.43% 11.11%
Bruno Politano 6.05% 5.88%

Without doing any further statistical analysis, its clear the chance of each player winning is directly related to their chip stack. These numbers show the overwhelming factor that determines a player’s chances of winning a poker game is their relative chip stack. The correlation is also linear. If a player has twice as many chips, they are implied to be twice as likely to win.

What is also interesting about the November 9 in 2014 is the final table does not include any big name professional players.  The wagering market is saying that without any additional bias of a player’s skill level, chip stack is the main criteria.

As November draws closer, it will be interesting to see if these odds change. Another lesson from this short analysis is buy in for the largest stack possible when playing poker, and re-buy as soon as possible (even when you don’t bust out).  The larger your stack size, the better your chances of winning, plain and simple.

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Gambling with an Edge – Moneymaker Effect

Last week’s Gambling with an Edge podcast/radio show featured a discussion on the “poker boom”, the “moneymaker effect” and growth of the WSOP.  For me at least, the most interesting areas for discussion are the causes and effects of the poker boom. Confusion remains in the poker/gambling community about why the poker boom happened, and what it means for poker and gambling more generally.  The poker boom also provides insights into larger trends shaping the business of gambling, so its important that we understand what the poker boom was, and how it impacts poker and gambling.

I believe the poker boom was caused by a groundswell of young men playing online poker.  Expanded media coverage, WSOP popularity, and Chris Moneymaker’s win are all reflections of the poker boom, but they didn’t cause the poker boom.  The poker boom was caused by the growth of young men playing online poker.

Before discussing the causes and effects of the poker boom, let’s start with some history. The World Series of Poker was started by Binion’s Horseshoe in 1970.  But before then, Binion’s had staged a famous poker game between Nick the Greek and Johnny Moss where the two players battled heads-up for very large stakes in front of a casino crowd. The WSOP tournament was an evolution of this promotional match. The WSOP was a marketing program to draw customers into the casino and to promote the Horseshoe casino. The WSOP grew slowly from 1970 until the mid to late 1990’s, when the tournament exploded in entrants and popularity. Please consult the WSOP wikipedia page for an easy to read chart of the main data on entrants and prizes.

As readers will notice by examining the historical entrants and winnings data on the WSOP, by the end of the 1990’s, field size was starting to grow at a faster rate until it breaks out completely in 2004. This breakout in popularity is what is referred to as the “poker boom“.  The most significant highlight to this trend was the 2003 tournament won by Chris Moneymaker. The main question then is: what caused the “poker boom”?

When thinking about the poker boom, we should be careful not to confuse causes and effects.  For example, did the expanded media coverage cause the poker boom or was an outcome of greater poker popularity? These are chicken and egg questions. Identifying the changes are useful, but even more important is assigning influence.

So what are the main issues?

In 1998 the firm Rounders was released to mixed reviews and moderate success at the box office.  The film depicts the underground world of high stakes poker games.  For gamblers, and poker players in particular, the movie is a classic. After winning the 2003 WSOP, Chris Moneymaker even refers to the film as an inspiration for his own play. Rounders is often cited as a cause of the poker boom, but the film actually pre-dates the poker boom. The poker boom was caused by the growth of online poker. In the film, the characters are playing live games. Contrast Rounders to the 2013 film Runner Runner, and the differences are plain.  In Runner Runner, the main character isn’t playing any live poker games, he is dedicated to online play.

Rounders actually pre-dates the first online poker sites such as Planet Poker or Paradise Poker.  They were formed in 1998, the same year rounders was released.  The popularity of Rounders actually grows following its box office release with the poker boom and the growth of online poker play. If Rounders was one of the causes of the poker boom, we would expect to see more growth in the WSOP, but in fact, the year after the release of Rounders, the WSOP number of entrants only increases from 350 to 293 (12%) which is in line with the increases in most previous years leading up to that time.  So Rounders didn’t cause the poker boom, but its growing popularity is a reflection of the poker boom.

Hole Card Cameras as also often cited as a cause of the poker boom, but hole card cameras were actually patented in the US in 1995, which pre-dates the poker boom.  If the idea for hole card cameras was available since 1995, then why did it take broadcasters so long to employ their use in their coverage of the WSOP?  Since online play didn’t begin to grow until the late 1990’s, the popularity of poker didn’t justify much investment or expansion of broadcast coverage.  The expanded broadcast coverage of the WSOP and other circuits such as the WPT, happened because of the groundswell of popularity of online poker among young men in the early 2000’s.  The use of hole card cameras did not cause the poker boom. The use of hole card cameras is a reflection of the greater investment that broadcasters put into poker coverage following the growth of popularity caused by online poker.

The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) marks the end of the poker boom. With the UIGEA, online poker in the United States was severally crippled.  Online play practically disappeared overnight in the United States. Meanwhile, online poker’s international growth continued apace. The break of online poker in the United States is reflected in the entrant stats for the WSOP. The year following the UIGEA, WSOP entries went from an all-time high of 8,773 to 6.358, a decrease of 27%.  This is during a time when television coverage continues apace.

What sustains the WSOP?  Even after the UIGEA, the WSOP still continues to attract many entrants, far above the trend before online poker.  I would be interested to know the international composition of the WSOP field.  I expect the international component of the WSOP field to have grown following the UIGEA.  The international entrants would still be able to play online poker outside of the United States. 4 of the past 7 winners of the WSOP are from outside the US (if we include Merson as international since he moved to Canada in order to continue playing poker online).  The greater international component of the WSOP could be a reflection of the larger trend of Las Vegas tourism (which is growingly international), and also the growth of gambling internationally.  The WSOP continues to grow internationally, particularly in Asia, and the EPT and WPT continue growing internationally.

Lot’s more research needs to be done to determine the interaction between land based gambling and online gambling.