Essential risk
Historically, poker is either sold as a mind sport or as gambling. This obviously doesn’t have to be binary: it can be one or the other to different people, but can also be both. Down the years the industry has tended to vacillate between the two extremes as the preferred route to get new people into the game, with varying degrees of success.
poker can’t be sold as a pure strategy game with no money involved
Looking at the top flops, one clear lesson can be gleaned: poker can’t be sold as a pure strategy game with no money involved. You simply cannot ignore the money being risked and its importance in piquing the average spectator’s interest. Put the best poker players in the world together and pit them against each other playing for basically nothing, as the Epic League did, and nobody cares. Pick nine random players nobody outside their own family has ever heard of on a big final table with millions up top and you have yourself an audience. Less obviously, it can’t just be sold as “pure luck gambling game,” for reasons I will outline later in the article.
Variance is essential to poker. Bad players have to be able to win in poker, and it is their ability, on any given day, to win against more skilled players that is the key ingredient which explains why they are willing to play them for money. Nobody in their sane senses would challenge Magnus Carlsen to a chess match for a significant amount of money, but recreational poker players will happily play against pros they know have a long term edge on them, precisely because they know that unlike pure skill games like chess, they aren’t drawing dead. Attempts at ‘no variance’ poker or ‘match poker’ have always failed in the past.
How ambassadorship has changed
When I started in poker almost two decades ago, the path to sponsorship was clear. Win a big tournament, get your face in the press hovering over a big novelty cheque, and get a sponsorship deal as a sort of bonus prize. First the industry put patches on winning players (or to be more precise, players who won big at least once). The problem with that model is that few players win big consistently, and many sites signed players after their first big win before taking years to realize it was also their last big win.
So it was they moved to sponsoring bona fide celebrities, the logic being they’re always in the public eye whether they win or not. That may be true, but what they’re in the news for matters too. Stars reportedly paid millions to sign the likes of Rafa Nadal, and yes he appeared in some special ads for them (mostly seen by existing customers), but when the dust had settled and the cheques signed, they found themselves not just on a very long list of sponsors, but down towards the bottom of it, not even noteworthy of a mention on the celebrity’s Wikipedia page.
Next the industry tried sponsoring content creators, but apart from a few exceptions, they quickly found these to be more appealing to existing customers and as such more of an audience retention tool than an acquisition one.
The solver era has ushered poker closer towards chess and made it more feasible to sell poker as a mind sport. The problem before was that while we all could see there was strategy in poker, even the best players often couldn’t agree among themselves what that actually looked like in practise. For example, what to do when folded around to you in the small blind? Some top players argued you should raise or fold seeking to end the hand there given your positional disadvantage postflop. Those players then proceeded to argue among themselves as to which hands were strong enough to be raised, and what raise size should be used. Others argued that limping was not only not terrible but preferable, as you wanted to put the least amount of money necessary into the pot out of position to see a flop and play as many hands as possible. These arguments raged but are now settled by solvers who can work out the most profitable way to play every hand at every stack depth.
the line between recreational and pro has blurred
Like all new technology, poker solvers caught on slowly. The earliest examples like PioSolver, Monker, and HRC were slow, cumbersome and difficult to use. As a result, only the most tech minded pros tended to use them. Solvers quickly showed humans just how bad we all are at poker, and a multitude of ways in which to play better, but this information initially disseminated very slowly. Over time though the tools got better, and easier to use, and more widely used as a result. The arrival of lookup tools like GTOWizard totally changed the game, making solves easily accessible at the click of a few buttons on a well designed user interface. As a result, there is less gatekeeping now, and recreational players can have access to the same powerful study and analysis tools as pros. In the process, the line between recreational and pro has blurred. Recreationals no longer have to aspire to be pros, they don’t have to make a living from the game, but they can make money (or not lose, or lose less), if they’re willing to put a little study in.
Selling poker as a strategy game
My books with Barry Carter and my training site SimplifyPoker.com focus mainly on niche formats like Satellites, PKOs, and Mystery Bounties. We know for a fact we have increased liquidity to these formats because of our books – especially satellites. As a result, operators have consulted with our books or with us directly to help design their tournaments. The irony here is one big reason I was happy to “spill the beans,” so to speak, on satellite strategy was that after years of being the biggest part of my online profits, they were dying. The main reason for this was the skill gap between pros and recreationals had reached such levels satellites were starting to feel more like chess than poker to losing recreationals: they might not be drawing dead, but they were drawing slim. They could see with their own eyes that the typical satellite on Stars that offered five seats and attracted more recreational players than pros, yet the pros were winning almost all of the seats. So they voted with their feet, or their mice, and stopped regging them.
So, faced with a dying format I saw no harm in opening my playbook and revealing the plays recreationals didn’t know about. I was warned in advance the book would sell very few copies as it wasn’t just niche, it was a niche of a niche. This turned out not only to be wrong, but to be wrong by a factor of over one hundred, in terms of actual as opposed to intended sales.
those who work hardest and smartest will have the biggest edges
One unforeseen consequence of the success of the book was that it encouraged recreationals back into the pool, as they quickly found that armed with the new knowledge they acquired, it was a fair fight against the pros, or in many cases they could even win long term. Poker will always be a meritocracy where those who work hardest and smartest will have the biggest edges, a less than zero sum game (taking rake into account) creating more long term losers than winners, but as long as the losing players at least feel they have some chance, the game continues.
Strategy content can therefore be a powerful driver of market activity. Strategy content is the gateway for a lot of new players in the same way it is for chess: people can be attracted by the puzzle as much or even more than the potential prizes.
Larry, David, and Ray
I recently gave a talk at the Edge Expo in Dublin on this topic, and a similar one at a corporate after dinner event. In those talks, I asked listeners to think about three different players or archetypes we see in poker. I call them Larry, David, and Ray.
Larry
Larry is the Whale. Typically he got into poker via other forms of gambling, and he enjoys the social aspect. Larry is independently wealthy and as such is pegged as a high value customer by online and live operators. He either doesn’t know about the strategy aspect of poker, or doesn’t care. He’s here to gamble and have fun, and those two things are synonymous in his mind. Larry doesn’t exercise bankroll management, and why would he? He’s a losing player and no amount of bankroll management will change that. He has a budget rather than a bankroll.
Historically Larry is the player operators fight hardest to recruit. But there are a couple of problems with Larry. First, as unlikely as he is to go bust, his need for the stakes to be high, and his losing at those stakes at a high clip, means he may reach the tipping point beyond which he’s not willing to lose any more, at which point he wanders off into the pit or the slot machines, where he’s guaranteed to lose, but also guaranteed to lose more slowly. Poker isn’t much fun when you’re just losing quickly, which is a much bigger problem for Larry online who can increase his loss rate by playing way more tables and hands than he can online.
the rich whale who is so unpleasant nobody would want to be in their company unless paid
A second problem that can arise with a lot of Larrys is, well, he’s just not a very nice guy. The forced socialization of live poker can be quite the draw for the rich whale who is so unpleasant nobody would want to be in their company unless paid to be. Many of the most egregious examples of sexism, racism, and other unsavoury isms not only come from Larrys, but are tolerated on the strictly business grounds that “well, it’s Larry, we need him in the game, he’s the biggest donator.” And that may be true in the short term, but in the longer term how many potential new players are repulsed from the game by this behavior?
There is a third problem with Larry specifically for online operators. In my first ever sponsorship deal, I got a call from the boss of the skin I was representing. They had a rich businessman in the midlands (who was actually called Larry as it happened) who was losing a fortune, and they wanted me to coach him. Larry was not easy to coach, and not particularly keen on the idea. He accepted the idea that he was a losing player grudgingly at best, and felt it was just either bad luck, or online poker was rigged against him. He was unwilling to be coached at distance, and equally unwilling to travel, so my boss ended up having to drive me to his mansion in the midlands once a week, and sit outside in the car while I tried to get explain pot odds for the seventh time that day, or why cold calling a four bet out of position with seven two offsuit for half your stack might not be a winning play.
After a few weeks, I’d had enough:
“This is pointless. He’s never going to be a winning player.”
“You think I don’t know that? Who said anything about making him a winning player? We just want him to lose more slowly.”
The boss went on to explain the real deal with online poker to me. The site I represented operated as a skin on a network. The revenue they got came from the rake generated by the players on their skin (they got none of the rake from players on other skins). Their main costs were the transaction costs associated with deposits and withdrawals made by their players, something on the region of 2%. So what happened when Larry felt the urge to play a bit of online poker, deposited ten grand on a Friday evening, at a cost of about €200 ($208) to the skin? Well, what nearly always happened was that Larry lost the lot in 20 minutes or less. Great for the other players at his tables, but terrible for the site as it meant Larry paid only a small fraction of the €200 in rake, and they ended up having to make up the shortfall to the network. My boss ultimately didn’t care whether Larry won or lost, he just wanted him to do it more slowly to ensure the rake generated covered the transaction costs.
Larry was the most egregious example on the skin of this, but there were dozens of other losing players who weren’t just losing their own money but also the skin’s. These players typically deposit a few times but don’t generate much rake. They tend to stop playing if they continue to lose, and withdraw if they somehow get lucky and have a big win. They are also the most easily put off poker by stories about Bots/AI/RTA etc and the quickest to buy into the “online is rigged” conspiracy to explain their own losses.
David
David is the professional. In the early days of online poker, sites competed eagerly and viciously for his patronage, offering preferential rakeback deals, and other VIP perks. Then around eight years ago the tide shifted and several sites, spearheaded by Amaya era PokerStars, decided they wanted to keep all the losing players money themselves. They took the simplistic bird’s eye view that poker is money in from losing players, money out divided between the sites (rake) and pros (profits). The simplistic argument was get rid of the pros and keep all the losing players money themselves. Ultimate shill Daniel Negreanu tried to convince us that more rage is better, and even filmed his girlfriend saying “fuck the pros,” a message he not only endorsed but presumably prompted.
There are a number of problems with this simplification. If you force all the winners to leave, well, the next level down (breakeven and small losing players) get a boost and become winners. The problem with culls as many a dictator has found to his ultimate cost is that once you start doing them, it’s hard to stop. You tend to have to keep doing them until almost nobody is left.
there are players who are losing right now and always will be
Another problem is that poker is a game of aspirations illusions and delusions. There are players who are losing right now but aspire to become winning players at some future point. And there are players who are losing right now and always will be (shoutout to Larry in his mansion in the midlands) but are deluded enough to think they might win some day. But even if you do manage to create the “perfect ecosystem” (from the online operator’s perspective) of “only losers,” then when word gets out, all aspirations, illusions, and delusions of winning disappear, and with it the dreamers.
Things swung back in recent years with sites recognizing that in return for their share of the spoils, pros do present overall positives to the industry. And I would similarly accept that the mixed feelings sites have about us all are, on balance, fair. Pros offer both positives and negatives to the ecosystem. The major positive is they provide liquidity and ensure that games start, but they are very selective of the games they play. They have little or no brand loyalty to one poker site, and will happily switch if it is +EV. They obviously withdraw money from the poker ecosystem.
They tend to be vocal in complaining if there are issues. That might seem like a bad thing for the industry, but can actually be a good thing. Many good initiatives that helped the industry long term were originally proposed or promoted by complaints from the pros, and many bad ones like the “more rake is better” one were nipped in the bud by pro protests.
Ray
Larry and David are the two archetypes the poker industry has put the most efforts into wooing historically. There is, however, a third type, and one I believe the industry has largely neglected, and would benefit greatly from making a greater effort to cultivate:
Ray, the Student.
Like Larry, Ray has considerable income outside of poker. Unlike Larry, not only is he aware of the strategy aspect to poker, but he is attracted to it. He wants to pit his wits against the best, he’s happy to devote a decent amount of time to study and improve, but he has no aspirations or illusions about becoming a pro. He just wants to get better, be competitive, and enjoy the mental battle. He doesn’t mind losing a certain amount for his recreation, and if he doesn’t lose (or win) he tends to do it slowly: exactly what the sites want. As such, his rake to transaction cost is the higher than either Larry or David, so he is in fact the most valuable customer they can have. Not only that, but he tends to keep his poker money on the site even when he wins, he rarely withdraws, because he doesn’t need the money, and is happy to leave it in there to fund his hobby going forward.
he has a good understanding of the issues and risks
He plays a lot, almost as much as David, and therefore generates a lot of rake, but he’s not bothered about rakeback, and certainly not going to shop around for the best deal. He exercises sensible bankroll management so he is very unlikely to go broke, and very likely to go on playing. He tends to show loyalty to a poker room even during online poker scandals, as he has a good understanding of the issues and risks, and is harder to scaremonger.
In essence, from the operator’s perspective, Ray combines the positive aspects of both Larry and David, with none of the negatives. Ray is the customer online poker really really wants, yet the sites historically have done very little to cultivate him. There have been intermittent initiatives, training content provided by sites to losing players to help them win, or at least lose more slowly, but there needs to be more, much more, of this. Every site should be thinking what more they can do in this area, and the industry as a whole should be leaning more into the idea of poker as a meritocracy that rewards those who work hardest and smartest, rather than the one that it’s a mindless gambling game where the only way to win is to get very lucky. Or worse yet, that the house is the only winner.