Show One, Show All: Or Why it’s “Game Over” Without Information Regulation in Poker and Investing

Before Stuey Ungar went on to win three World Series of Poker Championships, he was a world class gin player – maybe the best that ever lived. Ungar was so good he had trouble getting action, which is why he eventually took on a suspected cheat. During the match, Ungar’s bodyguard informed him that his opponent was indeed cheating. Ungar said, “I know he’s cheating. Don’t worry. I’ll beat him anyway.” And he did.

But few people would knowingly play in a rigged game, let alone win. This is especially true in poker and investing. Both are zero sum games, where winners are offset by losers. And in both games, information is paramount.

Any edge we have is small, and predicated on our ability to process incomplete information with speed and accuracy. When our opponents cheat, they do it by obtaining information we can’t get, effectively eliminating our edge. In poker, a cheat may know our cards or know the value of the cards yet to come. In investing, a cheat may know about a pending company takeover or financial information yet to be announced. Read More »

The Salad Days of Poker

Reading Dr, Pauly’s Lost Vegas: The Redneck Riviera, Existentialist Conversations with Strippers and the World Series of Poker was a guilty pleasure. I had always been an avid reader. But when I was freelancing, so much of my effort had to be concentrated on outflow versus inflow.

Starting sometime last year, however, my reading drought ended and became a floodwater. I devour academic papers on any interesting topic. A lot of them have to do with finance, investing, regulation and economics. But they have also included studies on farmland allocation, pain and pain perception, and the ability of pigeons to learn probability.

I read a number of papers that demonstrated idiotic sports betters, en masse, are more efficient at determining the betting line than the pros — and how a sports-betting approach is now being used to select drugs for clinical trials and forecast sales at high tech companies.

I scour dozens of articles from five newspapers and three financial websites each day. My book queue, which once looked like dozens of imposing stalagmites growing up from my office floor, has been reduced to a few innocent piles.

But for all my voracious reading, I suspect Dr. Pauly’s book was the feast I enjoyed most this year. And not just because it was well-written and included the delicious cynicism (replete with crack whores and degenerate gamblers) we’ve come to count on from the good doctor. Anyone who loves poker will relish the shocking tails of professional poker as viewed through Pauly’s Thompson-esque lens. But I loved it because it so beautifully captured the salad days of poker. Read More »

Uncovering the Biggest Error in the World’s Largest Sporting Event: Part I

Tim Lavalli and I were hardly the only reporters who noticed. The entire media room was buzzing when the final chip counts on Day Seven of the 2006 World Series of Poker were announced. The fact that the count was two million too high escaped almost no one. Yet Tim and I were the only ones to follow up. There are a number of reasons why it happened this way.

Tim and I didn’t have day jobs, so we had time. We also didn’t have a conflict of interest. Because of the WSOP’s media model, many of the reporters directly worked for WSOP sponsors and/or other online poker sites that had a vested interest in maintaining a constructive relationship with Harrah’s. Compared to most of the poker media, Tim and I were “veterans” in 2006. We had more time in the field and had forged useful relationships with tournament staff and professional players. Both Tim and I are skeptical and have graduate school backgrounds in science and math. And Harrah’s initial explanation of the count anomaly just didn’t add up — and we couldn’t leave it alone.

In a nutshell: We were old, had time on our hands and had nothing to lose.

In the years that I covered poker, there are a number of articles that I look back on fondly. Some of them were just fun to write because they focused on some of poker’s more entertaining players. In retrospect, a few articles were even well written and composed. The following articles were neither fun to write nor particularly well written. But they ended up improving the integrity of the game I love. And for me, the old adage proved true. I didn’t care who won or lost. In the end, I cared how the game was played.

The following three posts contain the poker articles I am most proud of.

Two Million Questions: Will Poker Answer (Part 1)

by Amy Calistri and Tim Lavalli, originally published September 8, 2006

As Poker seeks and gains more respectability with each successful tournament, each new television program and each lucrative advertising deal, the ‘powers that be’ within the growing poker community have more responsibility to ensure the integrity and fairness of the game. Poker has emerged from the dark, smoke-filled back room and has entered the mainstream of world culture and popular sports enthusiasm. Much of poker’s growth is coincident with gambling’s new consolidated company structures which bring more marketing resources and corporate respectability to the game. But just as poker has outgrown Benny’s Bullpen, the former setting of the WSOP, it also appears to have outpaced the control processes and security measures once designed to ensure a fair and honest game. Read More »

Uncovering the Biggest Error in the World’s Largest Sporting Event: Part II

The second article in the series went into excruciating detail to refute the “race-off” explanation for the introduction of two million extra chips into the 2006 World Series of Poker. At the time of its publication, Harrah’s was still publicly affirming this explanation. We subsequently learned, however, that by the time these articles were published, Harrah’s had proof that the race-off procedure had nothing to do with the massive chip count error.

Two Million Questions: Will Poker Answer (Part II)

by Amy Calistri and Tim Lavalli, originally published September 8, 2006

In Part I, we discussed that approximately two million extra chips found their way into the 2006 World Series of Poker Championship Event. As the “extra chips” revelation swirled through the poker media and the internet, there were two schools of thought. One explanation was that the increase was due to normal chip accretion via chip race offs and dead stacks. The other school theorized that chips were introduced through either player treachery or staff error.

In Part III, we will tackle the more nefarious arguments, examining the potential for organized cheating and supporting our own postulation that a serious staff error was made during the last chip color up in the Main Event. Part II examines the plausibility of the “normal” explanations for the excess chips.

Was This “Normal”?

Could over two million extra chips have come from normal chip accretion? Knowing this was a tournament of mammoth proportion, in both numbers and duration, many people feel intuitively comfortable with that explanation. We have even had Harrah’s officials tell us recently that they too assumed normal tournament chip accretion was a reasonable explanation for the chip overage. But as we will see, this explanation doesn’t hold water when simple math, the procedures, and chip count data are examined. Read More »

Uncovering the Biggest Error in the World’s Largest Sporting Event: Part III

Two Million Questions: Will Poker Answer (Part III)

by Amy Calistri and Tim Lavalli, originally published September 8, 2006

In Part II, we dismissed the possibility that two million extra chips found their way into the 2006 WSOP Championship Event through the normal processes of blinding off dead stacks and chip race-offs. We also noted that the vast majority of the chip increase occurred between the end of Day Five and the end of Day Seven. Before we investigate the two remaining explanations of cheating or an error, we wanted to narrow down the time frame when the increase occurred. If we could better determine “when” the increase took place, it might help us determine “how.” Examining available media reports we honed in on a specific time period during Day Seven.

Twenty Two Minutes:

Day Seven of the 2006 WSOP Championship began at noon with twenty-seven players. At approximately 1:14 PM, Eric Lynch was eliminated in 24th place. At 1:36 PM, twenty-one remaining players started their first break of the day. We believe, with the supporting data, that the increase in chip count can be attributed to this twenty-two minute period. It was during this time period that the $5K chips were colored up. Day Seven would play on until approximately 2:00 AM, when Fred Goldberg became the final table bubble boy. It would be sometime after that when the official end-of-day chip count confirmed the increase. Here’s some of the reported data from Harrah’s and Pokerwire from Day Seven that support this claim:

Time Reported

12:00 PM Starting chip count by Harrah/s (27 players) 88,256,000
12:29 PM Chip count by Pokerwire (25 players) 88,011,000
12:33 PM Chip count by Pokerwire (24 players) 88,011,000
1:14 PM Eric Lynch is eliminated in 24th place
1:14 PM Chip count by Pokerwire (23 players) 88,061,000
1:23 PM Rob Roseman is eliminated in 23rd place
1:35 PM Lee Kort is eliminated in 22nd place
1:36 PM First Break
1:36 PM Chip count by Pokerwire (21 players) 90,200,000
2:06 AM End of Day Seven chip count by Harrah’s 90,140,000

NOTES:
– The End of Day Five chip count by Harrah’s was 87,775,000
– The End of Day Seven chip count was verified by WSOP tournament officials with a physical count at the start of the final table.
– The total chip count reported by ESPN when Jamie Gold and Paul Wasicka started their heads-up play was 90,150,000 chips.

Chip Count Data Discussion:

In Part I we discussed some of the problems with chip count data accuracy. As Day Seven progressed past the first break, there was a lot of variation in the reported chip count data. Performing a rough mathematical analysis, this variation straddled a mean approaching the 90,000,000 chip mark; well above the day’s official starting chip count and approximating the officially verified end-of-day count.

It also should be noted that the 500K increase reflected in the official end of Day Six count didn’t raise too many eyebrows, even when compared to the “near perfect” count of at the end of Day Five. The media had become used to the over and under variation of the end-of-day counts, commonly plagued by self-reporting and recording errors. For instance, the official end of Day Four chip count was $86,752,600; almost a million chips too low. But Day Seven’s end-of-day chip count, verified before final table play, raised more than eyebrows.

However, on site at the Rio in the tournament room, media did not have the luxury of the careful examination of the multiple tournament reports and chip counts we have analyzed over the past several weeks. Once we had honed in on the critical 22 minutes, then the only other plausible explanation for the huge chip increase became easy to dismiss. Let’s dismantle the cheating explanation right now and then we will explain what exactly did happen during those 22 minutes. Read More »

The Off-Grid Experiment

I never had a problem being productive as a freelance writer. My home office is big and well appointed. I had cats, which make great writing partners. I had music for every mood at my fingertips.

Flexible hours worked well for me. I’m wired to write in the earliest hours of the day. When I was writing the Matusow book, my day started at 4:30 am. At about 10:00 am, I’d take a 2 mile walk to clear my head. Afternoons and evenings were dedicated to research and rough drafts.

Being unproductive, however, was a problem for me. As a freelancer, if you don’t work, you don’t get paid. Since work is never a given, it’s hard not to take on more. More is what you strive for. Lining up your next article or next gig is part of a daily routine. Weekends became a technicality. Taking a vacation equated to a little less work for a little less pay in a different locale.

Working a day job has taken some getting used to. An ipod became a must. Office attire is decidedly casual, but pajamas don’t cut it. I haven’t found a good way to recharge during the day without my mid-morning walk. And starting to write at 8:30 or 9:00 means I miss out on some of my most productive hours. Read More »

Vegas in July

The pokerboyz and I went on our annual July pilgrimage to Vegas. It’s generally hot, cheap and a bit slow that time of year. But the poker scene was a lot slower than it has been in years.

We tried to play as many tournaments as possible. But one day Planet Hollywood cancelled its tourney due to lack of interest. Not a particularly good legacy if the rumors about the WSOP are true. Another day we all withdrew from the Binions 2:00pm when we realized we would make up 80% of the field. The same thing happened at Aria.

But that didn’t stop us from having a great time and playing what tourneys we could find. The M Resort did a good job of attracting good fields. And the locals are still turning out for the Orleans tourneys. I cashed in the Tuscany donkfest, accomplished without a rebuy even.

Idoru (aka Mike) had been looking for revenge after a somewhat lackluster Biloxi performance in January. He got it. I think he cashed four or five times.

Vegas is definitely now catering to the budget gambler. Registration lines were very long on Sunday, when cheap room specials kicked in.

Most of us stayed at the Monte Carlo, where they offered a $1.99 breakfast special between midnight and 5:00 am. As a bonus, each breakfast special could be accompanied by its own cheap beer for an added $1.50. The boyz got me my own Colt 45 – with a straw – at about 2:30 one morning.

This trip we tried to include a couple of cultural outings. I highly recommend stopping by the Chihuly exhibit at Aria. We also enjoyed the exhibition at the Bellagio entitled “Figuratively Speaking: A Survey of the Human Form” featuring works by Renoir, Hockney, Picasso, Degas and more.

I got in one session at the Venetian’s Omaha hi/lo game. But I could have played there all week. I love that game. Every time I play it, I bump into someone I know. Last time I played it, I ran into Barrister who I had played with in Tunica. This time, I met up with Dr. Will Shead, who wrote this review of “Check-Raising the Devil” for the Journal of Gambling Issues. With a twinkle in his eye, he claimed he was in Vegas doing “field research.” Um. Yeah. me too.

There were lots of totally ridiculous moments, of course. I nearly spewed coffee out my nose when Idoru showed up wearing this T-shirt with the infamous 2+2 photo shop work of art.

I also took a fast pass by the Rio to say a quick hello to Otis, Mean Gene, and Flip Chip. It was the last day of the WSOP Championship prior to the November final. The boys looked pretty tired. And I could only see Dr. Pauly and BJ from a distance as they were still hunkered down inside the ropes.

On one hand, I was a little nostalgic for the old days when I covered the WSOP. On the other hand, I was relieved not to put in the backbreaking hours.

It was great to see everyone. But the sluggish poker scene had us rethinking next year’s meeting venue. Vegas either has to go through a lot of consolidation to beef up the field sizes — or we might have to consider a venue running a larger tournament event. Of course, it would be hard to pass up our annual picture at Binion’s. But maybe at our advancing ages, that would be a good thing.

Poker Alienation (and the Perfect Dress)

The World Poker Tour hit it out of the park when they hired one of the best tournament directors in the business. Matt Savage is a poker player’s TD. He’s known for his consistency, accuracy and fabulous structures. But the WPT lost it in extra innings for me with the “Royal Flush Girls.” The question isn’t whether there should have been five. The question is: How far is poker willing to go to alienate women players and fans.

Poker has enjoyed a legacy as a big tent game. Man, woman, black, white, off the Mayflower, or “off the boat” — you got to put your money down and get the same seat as anyone else. Recognizing that woman didn’t have the same earning power as men, women’s events with lower buy-ins were added to almost every tournament lineup. Of course, women were always welcome to play any event. Whether women’s events are now archaic is a tired discussion. But the fact remains, poker had a track record for trying to be inclusive. Read More »

Last Longer

I thought I played in the longest running regular home game in Austin. The gang has been getting together almost every week for more than 15 years. But in Friday’s paper, I learned that Austinite Emma Long has been running hers for over 60 years.

Emma was the first woman elected to the Austin City Council back in 1948. Over the years, her game has attracted its fair share of Texas dignitaries, including a drop in by LBJ. And this isn’t a girls’ night out. It’s all about the cards. After numerous questions from the reporter on the story, Emma told him to “Stop talking. We’re playing poker.” Emma is 98. You go girl. You can read more about her here.

Some people have a list of pros or celebs they’d like to play poker with. I have enjoyed playing against pros like Robert Williamson III, David Benyamine, Rafe Furst, Surinder Sunar and Chau Giang. But it was more about the game than the players. Up until now, there had been only one person I really wanted to play with. I wanted to play against the billionaire banker Andy Beal and got my wish in 2006. Read More »

Investing and Poker a la Fargis

The Pokershrink took this picture of Chris Fargis in January 2006. Fargis was on his way to winning the Triple Draw Lowball event at the WSOP Circuit at the Grand in Tunica. For the win, he pocketed $22 grand.

Through 2006, Fargis amassed over $137K in recorded live tournament events. As mostly an online player, that was the just tip of the iceberg.

In the picture, Fargis’ T-Shirt says “Why Work?” But by January 2007, poker had become a drag for Chris and he was looking for something different. In this post, he asked his blog readers for ideas. As you can see, Dr. Pauly suggested opening a bar in Brooklyn called the “Triple Draw.” Since Fargis obviously excelled at risk vs. return decisions, I suggested investment. In his subsequent post, he said he planned to pursue investment/trading as a possible career. Read More »