STATE OF WISCONSIN

CIRCUIT COURT

STEVE VERRETT,
8162 Stagecoach Road
Cross Plains, WI 53528;

DANE COUNTY

Case No:

_________________

and
MARK KROON
4310 Green Avenue
Madison, WI 53704
Plaintiffs,
Declaratory Judgment
Classification: 30701

v.
BRAD SCHIMEL,
Attorney General
17 West Main Street
Madison, WI 53703
Defendant.

PLAINTIFFS EXPERT WITNESS AFFIDAVIT

OF PROFESSOR ROBERT C. HANNUM
STATE OF WISCONSIN
DANE COUNTY

)
)
)

SS

I, ROBERT C. HANNUM, hereby depose and say under oath:

1.

I have been retained as an expert witness by the plaintiffs in the above entitled

action. I currently reside at {insert address here}.

Qualifications and Background

1

2.

I am a Professor of Risk Analysis & Gaming at the University of Denver.

3.

I graduated from the University of Dayton, with a Bachelor's Degree (B.S.) in

Mathematics in 1974 and from Florida State University with a Masters (M.S.) in Statistics in
1976, followed by a Doctorate (Ph.D.) in Statistics in 1979. In 2004, I became a Full Professor of
Statistics at the University of Denver (changed in 2010 to Full Professor of Risk Analysis &
Gaming) and am a member of the Expert faculty at the Gaming Studies Research Center,
University of Nevada Las Vegas. I am an active member in good standing of the American
Statistical Association; American Mathematical Society; Decision Sciences Institute; Society for
Legal Empirical Studies; and the International Masters of Gaming Law, a nonprofit association
dedicated to the education, advancement of the gaming law profession, and exchange of
professional information concerning the local and global practice and development of all aspects
of gaming law.
4.

My primary research interests are mathematics of gaming and casino games,

applications of mathematics in gaming law, and casino gaming operations. I have received
college grants for numerous gaming research projects including Statistical Issues in Gaming
Regulation (2001) and Advantage Play and Commercial Casinos (2004). I have also received a
University Internationalization Grant for research into International Casino Gaming:
Operations, Policies, and Impacts (2001).
5.

My primary teaching interests include the mathematics of gambling and

commercial gaming. During my tenure as a Professor of Statistics, I have developed a number of

gaming related courses including Probability Theory: The Mathematics of Gambling (a course
on the theory and applications of probability with an emphasis on casino gambling); Risky
Business: Introduction to Gambling & Commercial Gaming (a course on the theory of gambling
2

and the business of casino gaming); Gaming Law (a course held in Las Vegas, with half-dozen
world-class experts in gaming law, regulation, and operations); and The Art & Science of Poker
(a course covering the concepts, mathematics, theory, and culture of poker).
6.

I am the co-author of Practical Casino Math (2nd Ed. 2005) a comprehensive 300-

page book on the mathematics underlying casino games. I have also written numerous articles
and reports relating to the mathematics of gambling, game analysis, statistical modeling,
regression, and sampling design and analysis, including:
a. Robert Hannum, Matthew Rutherford, & Teresa Dalton, Economics of Poker: The
Effect of Systemic Chance, 6 J. Gambling Bus. & Econ. 25 (2012)
b. Hannum, R.C. and Cabot A.N. (2009). Toward Legalization of Poker: A Game of
Skill. Gaming Research & Review Journal, Vol. 13, No. 1.
c. Hannum, R.C. (2006). Skill versus Chance: A Delicate Dance. Casino Lawyer, Vol.
2, No. 3.
d. Cabot, A.N. and Hannum, R.C. (2005). Poker: Public Policy, Law, Mathematics
and the Future of an American Tradition. T. M. Cooley Law Review, Vol. 22, No. 3.
e. Cabot, A.N. and Hannum, R.C. (2005). Statistical Standards in Gaming
Regulation: Fact and Fiction. Casino Lawyer, Vol. 1, No. 3.
f. Hannum, R.C. (2003). A Guide to Casino Mathematics. Gaming Studies Research
Center, University of Nevada Las Vegas, http://gaming.unlv.edu/research/subject/.
g. Cabot, A.N. and Hannum, R.C. (2002). Gaming Regulation and Mathematics: A
Marriage of Necessity. John Marshall Law Review, Vol. 35, No. 3.
h. Hannum, R.C. (2000). Casino Card Shuffles: How Random Are They? Finding the
3

Edge: Mathematical Analysis of Casino Games. Vancura, Eadington, and Cornelius, eds.,
University of Nevada Reno Press.
7.

I held a Session Chair at the 1997, 2000, and 2009 International Conference on

Gambling and Risk-Taking. I was a referee for two papers in the 2007 volume Optimal Play:
Mathematical Studies of Gambling. I have also appeared as a featured speaker at a number of
gaming conferences, including:
a. Poker and Skill, 14th International Conference on Gambling & Risk Taking,
Lake Tahoe, May, 2009.
b. Super Pan 9: Unraveling the Mystery of the 70% Banking Rule, 14th
International Conference on Gambling & Risk Taking, Lake Tahoe, May, 2009.
c. Gaming Math: How Casinos Make Money, Johns Hopkins Conference for
Educators, Las Vegas, NV, January 2009.
d. Poker and the Law," Gaming Law Symposium, Drake Law School, September
2008.
e. "Table Games and Profitability: Money, Math, and Myths," Gaming Operations
Summit, Las Vegas, NV, April 2007
f. "Knowing When to Hold 'Em and When to Fold 'Em: The Mathematics of Poker,"
NSF Program on Games of Chance, University of Utah, July 2005.
g. "A Mathematical Analysis of Casino Dead Chip Programs," International Academy
of Business and Economics Conference, October 2003.
h. "Mathematics and Gaming Regulation," University of Nevada School of Law,
October 2003.
4

i. "Statistical Standards in Gaming Regulation: Fact and Fiction," International

Masters of Gaming Law Symposium, September 2003.
j. "Gaming Law and Mathematics," University of Nevada School of Law, September
2002.
k. "How Casinos Make Money," Asia-Pacific Gaming & Casinos World Conference,
Singapore, June 2002.
l. "Casino Mathematics," Seminar for casino executives, Aruba, March 2002.
8.

I am a consultant in the areas of casino gaming, the mathematics of gaming, game

analysis, statistical modeling, regression, sampling design and analysis, and have been retained
by and/or worked with numerous gaming companies and authorities. These include, IGT
(International Game Technology) (expert witness); Gaming VC; ShuffleMaster; Pro Shuffle;
Pari-Mutuel Poker & Billiards; Spin & Win; Connecticut Department of Revenue (consulting
expert); Wisconsin Department of Revenue (expert witness); Mississippi Gaming Commission;
Iowa Racing & Gaming Commission; and Casinos Austria Research & Development.
9.

I have served as a source for expert analysis and opinion on various aspects of

gaming mathematics and casino games. I appeared as an expert witness and presented testimony
on the mathematics of casino games, expectation, profit objective, and the role of skill in poker
in the following cases:
a.

State of South Carolina v. Chimento (2009). This case involved the criminal

convictions of five poker players for violating a state gambling statute. On appeal, the
convictions were reversed on the ground that poker is not a game of chance, and therefore is not
gambling within the meaning of South Carolina law. The South Carolina Supreme Court heard
5

oral arguments in the case on October 19, 2010.

b.

Commonwealth of Kentucky v. 141 Internet Domain Names (2008). This case

concerned a government effort to seize 141 separate domain names associated with online
gambling. The Poker Players Alliance filed an amicus brief arguing that the poker-related
domain names did not relate to gambling because poker is not a game of chance. (Testimony via
affidavit.)
c. Peter B. Stone v. Commissioner of Revenue Services, State of Connecticut (2006).
This case concerned whether or not: (1) the plaintiff was a professional gambler in the trade or
business of gambling under the Internal Revenue Code, 26 D.S.C. 162(a); (2) the Department
of Revenue Services' income tax was discriminatory as applied to Plaintiff and other individuals
categorized by the Commissioner as non-professional gamblers; (3) the State impermissibly
discriminated against individuals based upon the type of gambling activity engaged in; and (4)
the State selectively enforced income reporting requirements against those winning larger sums
of money in gambling activities.
d.

Thomas Calaway v. Wisconsin Department of Revenue (2005). This case

concerned a petitioner who was alleged to have been engaged in a trade or business in playing
slot machines in Las Vegas and Atlantic City.
10.

I specialize, and am an expert, in the mathematics of gambling, game analysis,

statistical modeling, regression, sampling design and analysis. Given the nature of my research
and teachings, I have developed a thorough knowledge, grasp, and appreciation of the
mathematics underlining casino games, including the game of poker and its many elements of
skill. I have researched and taught in these areas and continue to do so.

11.

I have been asked by the Plaintiffs in this case to make this Affidavit and to testify

on their behalf to provide independent expert evidence as to whether poker is a game of skill.
The matters deposed reflect my knowledge of gaming mathematics as derived from my
experience indicated above.
Analysis and Opinion
12.

Poker is a five-card vying game played with standard playing cards. A vying game

is one in which, instead of playing their cards out, the players bet as to who holds the best card
combination by progressively raising the stakes until either (a) there is a showdown, in which
the players reveal their cards and the best hand wins all the stakes (the pot), or (b) when all but
one player has given up betting and dropped out of play and the last person to bet or raise wins
the pot without a showdown. Most variants of poker are based on a standard five-card pokerhand ranking system according to strength, from the strongest hand to the weakest. The ranking
of the cards in a standard fifty-two-card deck is as follows:
A royal flush, the top hand, consists of an Ace, King, Queen, Jack, and Ten, all of the same suit.
A straight flush is any five-card sequence in the same suit.
A four of a kind is all four cards of the same value.
A full house is a three of a kind combined with a pair.
A flush is any five cards of the same suit that are not in sequence.
A straight is any five cards in sequence, but not in the same suit.
A three of a kind is any three cards of the same value.
Two pairs are any two separate pairs.
A pair is any two cards of the same value.
13.

If a hand contains none of the above combinations, it is valued by the highest card

in it. In standard poker there is no ranking of suits. If two hands are identical apart from the suits,
they will be counted as equal. Further, if there are two equally high hands in a showdown, the pot
is split between them.

14.

Betting in poker proceeds in rounds. In a round of betting, the players act in

sequence, and can make one of several moves. If nobody has bet, then the player whose turn it is
to act may either check, which means that he chooses not to bet, and to allow the next player to
act, or he can bet, which means that he wishes to contribute some chips to the pot, and creates
an obligation for the other players to at least match his bet if they wish to stay in the hand. Once
a player has bet, the next player has three options: he can fold, which means that instead of
matching the bet, he discards his hand and forgoes any ability to win the pot; he can call,
which means that he matches the amount of the previous bet exactly; or he can raise, which
means that he augments the size of the bet, and imposes an obligation on all of his opponents to
call his bet in order to stay in the hand. A round of betting ends when either all of the players
have called the largest bet on the table, or one player has induced all of his opponents to fold (in
this latter scenario, the hand ends as well, and the remaining player takes the pot).
15.

The most popular type of poker played today is Texas HoldEm. The game

typically accommodates between two and ten players. In Texas HoldEm, the players create fivecard poker hands by combining two personal, or hole, cards, with five community cards.
Players may use one, both, or none of their hole cards. A typical hand of Texas HoldEm takes
between 1 and 3 minutes, and the sequence of play is as follows. First, the two players to the left
of the dealer each post small forced bets, known as blinds. The blinds are the only compulsory
bets in Texas HoldEm, and the obligation to pay them rotates around the table every hand. Once
the blinds are posted, each player is dealt two cards face down (the hole cards). These cards are
unique to the player to whom they were dealt. A round of betting then takes place, in which all of
the players who wish to stay in the hand must at least match the size of the larger blind. After the
first round of betting, three shared cards (the flop) are placed face up in the middle of the table.

Another round of betting then takes place. Next, a single shared card (the turn) is turned up
among the community cards in the center of the table, followed by a third round of betting.
Finally, the last shared card (the river) is added to the community cards, and a fourth and final
round of betting occurs. At the end of this round, if two or more players are still active in the
hand, then the player who makes the best five-card hand by combining his two cards with the
five community cards wins the pot.
16.

It is my considered opinion, based on my experience, on research that I have

personally conducted, and on a review of the scholarly literature, that Texas HoldEm is a
game in which skill predominates over chance in determining the outcome. Thus, in my
opinion, it would be incorrect to describe Texas HoldEm as a game of chance. An
explanation of my reasoning follows.
17.

Some games, like lotteries, slot machines, and roulette, are games of pure

chance, in which a player can do nothing (aside from cheating) to alter his odds of winningor,
more likely, losing.
18.

On the other hand, games of pure skilli.e., games in which chance cannot

influence the outcomeare very rare. A game cannot be one of pure skill if the rules of the game
either purposefully introduce an element of chance (e.g., by vesting unreviewable discretion in
baseball umpires to call balls and strikes) or fail to control for a foreseeable chance event (e.g.,
by refusing to allow golfers to take a mulligan when the wind interferes with a shot, even though
this happens frequently).
19.

Games that might be considered pure skill include Tic-Tac-Toe, Checkers, Go,

Hex, and Chess, though some would argue that many of these games confer a slight advantage to
the player who goes first (or second), and in so doing introduce into the game an element of
9

chance (assuming the order in which players move is decided by a random mechanism).
20.

Because even in the most skillful of games, such as golf, baseball, and chess, a

chance eventa freakish gust of wind that carries a perfectly struck golf ball into a hazard, an
umpires bad call, or the arbitrarily awarded advantage of playing the white side of the
chessboardmay frequently alter the outcome of the game, it makes the most sense to ask not
whether skill always and exclusively determines the winner, but instead whether skill
predominates over chance. That is, one should consider whether skill or chance plays a greater
role in determining the outcome of the game. The predominance standard most accurately
tracks how people actually think about games of skill, and is also easy to apply consistently
because it is susceptible to measurement.
21.

The predominance of skill or chance can be difficult to prove using only a single

approach, and it is certainly possible to over- or under-estimate the role of skill or chance in a
game. However, if the results of several approaches all point to a game being one of skill, then
the evidence is compelling.
22.

Some ways to determine whether skill predominates in a game are to ask whether:

a) It is possible for a player significantly to alter the likely outcome of the game.
b) Varying levels of skill result in significantly varying outcomes.
c) There is a correlation between previous success and present and future successes.
d) Performance can improve with education, learning, and experience.
e) Good players consistently and routinely prevail against bad players.
23.

To adequately assess the predominance of skill or chance in poker, it is essential

to consider the results of a large number of hands, or the long run. Unlike some other games,
non-tournament poker has no fixed end-point. A poker player can play only one hand, and then

10

retire for good, or he can play thousands of hands over the course of a lifetime. Thus, anybody
analyzing the nature of poker must decide whether to consider only a single or a few hands of
poker, or instead consider poker over the long run.
24.

The long run is the most appropriate framework, for two reasons.

a. First, a long view is the most consistent with the scientific method. In science, and in
statistics especially, large sample sizes are crucial to ensure that the results of a trial accurately
reflect reality. Small sample sizes, on the other hand, create a significant risk of error, as one
risks generalizing from idiosyncratic facts. For example, if an observer examined a single point
of tennis, in which the ball clipped the tape at the top of the net and fell unpredictably to one side
or the other, the observer could reach the erroneous conclusion that tennis is a game in which
chance predominates over skill. It is only by considering many points that one can develop a
valid understanding of the nature of tennis. The same holds true for poker.
b. Second, a long-run perspective more accurately represents the way that people actually
play poker. Many play the game for years. On the other hand, I have never encountered anybody
resembling the hypothetical player who plays only one hand before retiring.
25.

Skill and chance both play a role in Texas HoldEm. The winner of a hand of

Texas HoldEm is determined by the interplay of two separate factors: the deal of the cards, and
how the cards are played. The deal of the cards represents the influence of chance in the hand,
while the players decisionswhether to call, bet, raise, or foldall require the application of
skill.
26.

Importantly, these factors function largely independently of each other: the deal of

the cards never dictates a players decision-making, and a player has no power to alter the cards

11

that are dealt. This independence draws a bright line between skill and chance, and allows us to
test the influence of either factor on a players success (or failure) in the game of Texas
HoldEm.
27.

Put another way: the question of whether skill or chance predominates in Texas

HoldEm is the same as asking whether the deal of the cards or the decisions of the players
constitute the predominant factor in determining the outcome of the game. In my opinion Texas
HoldEm is not a game of chance because the decisions of the players have a much larger impact
on the outcome than the deal of the cards.
28.

I base this opinion, in part, on studies conducted by myself and other scholars.

The scholars appear to be in unanimous agreement that skill predominates in poker. Indeed, the
collective expert opinion is unequivocal: poker is a game of skill, and in the long run, a skilled
player will beat an unskilled player. Anthony Cabot & Robert Hannum, Poker: Public Policy,
Law, Mathematics, and the Future of an American Tradition, 22 T.M. Cooley L. Rev. 443, 466
(2005) (Cabot & Hannum); see Robert Hannum, Matthew Rutherford, & Teresa Dalton,
Economics of Poker: The Effect of Systemic Chance, 6 J. Gambling Bus. & Econ. 25, 42 (2012)
(clearly the driving force behind the economic outcome of Texas Holdem is skill rather than
chance); Steven D. Levitt, Thomas J. Miles, & Andrew M. Rosenfield, Is Texas Hold Em A
Game of Chance? A Legal and Economic Analysis, 101 Geo. L.J. 581, 585 (2013) (skill is the
primary factor determining the distribution of player returns); Steven D. Levitt & Thomas J.
Miles, The Role of Skill Versus Luck in Poker: Evidence from the World Series of Poker 2
(NBER

Working

Paper

No.

17023,

2011),

http://pricetheory.uchicago.edu/levitt/Papers/WSOP2011.pdf (Levitt & Miles) (there is strong

evidence in support of the idea that poker is a game of skill); Noga Alon, Poker, Chance and
12

Skill 1 (2006), http://www.tau.ac.il/~nogaa/PDFS/skill4.pdf (Alon) (poker is predominantly a

game of skill).
29.

The validity of this conclusion is underscored by the fact that it is has been

arrived at by a host of scholars employing a wide variety of empirical approaches. In my most

recent study, using a database of more than one billion hands of real online poker involving 1.8
million players, I and the other authors present a regression-based method for isolating and
measuring the systemic chance and skill elements in Texas Hold em poker. We conclude that,
though there is an element of systemic chance in poker, virtually all of the variation in players
returns on investment (ROIs) from playing online Texas Holdem can be attributed to something
other than systemic chance. Robert Hannum et al., Economics of Poker, 6 J. Gambling Bus. &
Econ. at 42. The study goes on to conclude that the factor that accounts for most of the variation
in player profits is skill. See id.
30.

Other science also strongly suggests that skill predominates over chance in poker.

In one of my studies (Hannum & Cabot, 2009) I conducted a computer simulation pitting a
player who played randomly against a player who employed a simple strategy. The logic behind
analyzing this scenario is that if skill plays no part in poker, then a player making random betting
decisions should fare as well as any other player. In this scenario, where one player has no skill
whatsoever, the gap in skill levels is large and a skilled player can devise a relatively simple
strategy (in this case, raise when possible, otherwise call) to consistently defeat the unskilled
player. Direct mathematical analysis using a decision tree approach, supplemented and
confirmed by simulations of one billion hands, shows that the skilled player will win 96.8
percent of the hands outright (and 0.21% will result in a tie) with a win rate of 1.6 big bets per
hand.
13

31.

To put this margin of victory into perspective, consider that many poker players

play games in which one big bet is $20 (quite a few professionals play games with much
higher stakes). In this simulation, the strategic player would have won an average of $32 per
hand from the random player. In many poker rooms, a dealer might deal 30 hands per hour. Thus,
a player following a very basic strategy could expect to make $960 an hour against an opponent
who plays randomly.
32.

Since a player making random decisions would fare just as well as any other

player in a game of pure chance (such as roulette), these figures for the Texas HoldEm match-up
speak to the overwhelming dominance of the role of skill in poker. That a player can implement a
strategy to defeat another player in such an overwhelmingly high percentage of the hands with
such a large win rate is strong evidence in support of my view that skill predominates over
chance in determining outcome in poker.
33.

In a second study (Hope & McCulloch, 2009), researchers examined over 100

million hands of online poker involving actual players and found that in approximately 76% of
all hands, a player won without a showdowni.e., 76% of hands ended when one player induced
all of his opponents to fold. Further, of the remaining 24% of hands that did go to showdown,
fully half were won by a player who did not have the best handi.e., in half of all showdown
hands the player whose cards would have ended up best had decided to fold earlier in the hand.
Thus, 88% of the time, the decisions made by the playersand not the cards dealtdetermined
who won the hand. This study illustrates in simple numerical terms the predominance of skill
over chance.
34.

Other scholars (Croson, Fishman, & Pope, 2008) present evidence of skill

differentials among poker players finishing in one of the final two tables in high-stakes Texas
14

HoldEm tournaments between 2001 and 2005 (data included 899 players in 81 separate
tournaments). Comparing poker to golf (using data from professional golf tournaments), a game
universally held to be predominantly skill-based, the authors observe that skill differences
among top poker players are similar to skill differences across top golfers. The main conclusion
in this study is that there appears to be a significant skill component to poker: Previous finishes
in tournaments predict current finishes. It is my opinion that the conclusions of that peer
reviewed study are correct assuming the accuracy of its underlying data.
35.

Others (Dedonno & Detterman, 2008) examine whether poker is a game of luck

or skill by comparing players who were taught strategies based on expert opinion with other
players who were taught no strategies. Participants who were instructed out-performed those
who were not instructed. The authors conclude: The unequivocal finding is that poker is a game
of skill. These authors observe that the reason poker appears to be a game of luck is that the
reliability of any short session is low and that obtaining accurate estimates of poker ability may
not be easy. The skill involved in poker is complex and luck (random factors) disguises the fact
that poker is a game of skill. I endorse the conclusions of those authors based on my analysis of
their methodology and reasoning.
36.

One scholar (Alon, 2006) conducted a detailed analysis of several simplified

models of poker, which can be viewed as toy models of Texas HoldEm. The author notes that
the simplified models allow a precise mathematical analysis and yet capture many of the main
properties of the more complicated real game. The analysis suggests that skill plays an important
role in poker and the author concludes that skill is far more dominant than luck, and that poker
is predominately a game of skill. Professor Alons study is a good simplified analysis of the
question presented, and I agree with his conclusions.
15

37.

Using a game-theoretic approach to study the relative roles of skill and chance in

games, other scholars (Borm & van der Genugten, 2001) conclude that the level of skill in the
three popular variants of poker, Seven Card Stud, Texas HoldEm, and Draw Poker, is greater
than that in roulette, craps, and blackjack.
38.

Finally, I am aware of and have reviewed the testimony of on the analysis of Dr.

Randall Heeb given in the case of U.S. v. DiCristina, 886 F. Supp. 2d 164 (E.D.N.Y. 2012). That
analysis was grounded in sound scientific methodology and in keeping with the principles
discussed supra. Employing commonly-used statistical techniques, Dr. Heeb analyzed millions
of hands of Texas Hold em played on the website PokerStars between April 2010 and March
2011, an extremely large dataset that enables highly accurate inferences.

To enhance the

robustness of his results, Dr. Heeb conducted two separate analyses. First, he examined whether
a players success generally predicted his success when dealt a specific pair of starting down
cardsfor example, a King and a Nine in different suits. To do this, Dr. Heeb calculated each
players average success rate on all other possible pairs of starting down cards and grouped the
players according to whether their averages fell above or below the sample median. He then
compared whether players above the median won more (or lost less) when dealt King-Nine than
players below the median. That comparison allowed Dr. Heeb to assess whether more skilled
players perform better than less skilled players when dealt the same cards.
39.

Next, Dr. Heeb created a skill index to test whether skill correlated with a players

win rate. He randomly divided the data on millions of poker hands into halves and used
regression analysis on the first half to create an index of skill that pegged 240 statistics about
how players played to their win rates. He then applied this index to players in the second half of
the data and measured its correlation with a players actual win rate. By doing so, Dr. Heeb was
16

able to observe whether a players win rate increased along with his skill, as measured by his
index.
40.

Dr. Heebs analyses, which employed the best practices of informed statisticians

and empiricists, yielded several conclusions supporting pokers status as a game predominated
by skill. He concluded that players with higher predicted skill on average have higher win
rates and correspondingly, over time, win more money. Skillful players are more successful
than less skilled players with every possible starting hand and [s]killful players earn more
profit than less skilled players with every possible winning hand type.
41.

The importance of skill manifests itself relatively quickly. Eight-eight percent of

the most skilled players (the top 10%) will be ahead of the least skilled players (the bottom 30%)
after just 240 hands and 90% will be ahead after just 300 hands. That finding is critical. As
already noted, the average poker session lasts four to five hours, oftentimes more, and consists of
hundreds of hands. Thus Dr. Heebs results stand for the proposition that at the end of a normal
poker session the most skilled players will be ahead of the least skilled players 80%-90% of the
time.
42.

In contrast with these numerous studies finding that skill predominates over

chance in poker, I am aware of no study reaching the conclusion that poker is a game
predominately of chance.
43.

In my opinion, the studies above establish conclusively that in the long run, skill

predominates over chance in poker. However, even if one takes a short-term view of poker, skill
predominates over chance in determining the relevant outcomes: who wins the hand, and how
many chips that player wins.

17

44.

As noted above, every hand of poker involves multiple decision points, and each

of those decisions is influenced by numerous factors requiring skillful evaluation. In order to

make the right decisions at the table, poker players must become skilled practitioners in a variety
of disciplines, including:
a) Mathematics, i.e., calculating odds;
b) Observation, i.e., reading hands and recognizing patterns and tells;
c) Psychology, i.e., assessing an opponents motivations;
d) Persuasion and deception, i.e., convincing ones opponent to make a mistake;
e) Judgment, i.e., processing incomplete information quickly to reach the right decision;
f) Situational awareness, i.e., selecting profitable games and exploiting ones position at
the table; and
g) Money management.
45.

Every decision at the poker table, whether correct or incorrect, represents the

players efforts to distill these various disciplines and processes into a single choice.
46.

For example, in every individual hand, a poker player must determine whether he

has the best hand or not. This act itself requires tremendous skill, as it requires the player to
compare the strength of his hand against the unknown strength of his opponents hands using
whatever incomplete information is available to him at the time. To get to the right answer, the
player must utilize powers of observation and pattern-recognition to establish what sorts of hands
his opponents might be holding. Skilled players can read their opponents with a high degree of
precision, while poor players rely on crude guesswork, or do not even make the attempt.
47.

If the player determines that he has the best hand, then he must ensure that he gets

the maximum possible value for his hand. He must have an intimate knowledge of the odds to
know how much to bet to ensure that his opponents will be wrong to bet against him, and he

18

must be sufficiently capable of persuasion and deception to induce them to unwittingly make
those bad bets. Skilled players maximize the returns from their winning hands, while poor
players squander the opportunity by either betting too little, and thus underperforming, or betting
too much, and thus scaring their opponents into folding.
48.

If, on the other hand, the player determines that he holds the worst hand, then he

must determine whether he can nevertheless take the pot by bluffing, i.e., inducing his opponents
to fold better hands (including the best hand). Again, his skills at persuasion and deception are
crucial. He must know when and how much to bet, and he must control his body language and
verbal cues to signal strength in a way that will fool his opponents. Skilled players can convince
their opponents to fold even strong hands, while poor players disclose their bluffs through
unconscious tells.
49.

In the alternative, the player may decide that the optimal course of action is to

lose the minimum amount by folding an inferior hand early. The decision to fold such a hand is
akin to the decision to cut ones losses in a bad investment, and it represents a very skillful
exercise in judgment. One of the key variables separating profitable players from perpetual losers
is the ability to extricate oneself from a bad hand.
50.

Of course, this does not mean that chance never determines the winner of a poker

hand. A player can play a hand poorly only to find salvation in a lucky river card. However, this
situation seldom occurs. Indeed, people tend to remember these dramatic hands because they are
so rare, and because they represent a significant deviation from the way that poker hands are
supposed to work.
51.

Even in the unusual case in which a bad player catches a lucky card, skill results

in better outcomes. The lucky player still might make a bad decision during the last round of
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betting, and either fold the best hand or fail to extract the maximum value from his opponents.
And his skilled opponents might recognize their misfortune and fold their hands without losing
any additional chips. Thus, even in this case, which the data establishes is rare, playing skillfully
produces better results.
52.

Finally, poker differs in kind from games traditionally regarded as gambling. This

is so for two reasons.

a.

First, unlike other casino games, poker is fair because there is no house edge. In

house-banked games such as roulette, craps, keno, and slots, to name a few, players cannot win
in the long-run because the odds are rigged in favor of the casino. This highlights one of the
central concerns behind laws against gambling: legislators reasonably worry that the house will
dupe members of the public into making bad bets.
b.

Take, for example, roulette. If a player bets on a single number in American roulette

(where there is a double zero on the wheel), the probability of winning is 1/38 and the probability
of losing 37/38. The payout for winning, however, is only 35-to-1. Short of a biased wheel or
cheating, there is nothing the player can do to change these probabilities or the expectation,
which is 5.3%. Thus, a player will lose on average 5.3% of the money wagered, regardless of
the particular bets made and the pattern of betting. Because the spins of the roulette wheel are
independent trials and the probabilities of winning and losing remain constant from trial to trial
(and the expectation is negative on each trial), it is mathematically impossible to devise a system
or employ a strategy to change this expected win (loss) percentage. Poker is different. Unlike
roulette and other casino games, the rules of poker do not favor any of the players: all of them
have an equal chance to win. Furthermore, the house does not participate in poker games.
Instead, the house makes its money by collecting a percentage of every pot, known as a rake.
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Because the house is disinterested in the outcome of a poker hand, the concerns animating
legislation against gambling are muted when it comes to poker.
c. Second, bets in poker serve a different function than bets in traditional casino games. In
traditional casino games, bets simply establish the amount that a player is willing to wager, and
chance is the predominant factorin many cases the only factorthat determines the outcome
of the game. The player places his bet, and then waits for the wheel to spin, pulls the slotmachine lever, rolls the dice, waits to hear his numbers called, or watches his horse circle the
track. The size or nature of his bet has no impact on the outcome.
d.

Not so in poker. In poker, the bets themselves constitute the players most important

tools to alter the outcome of the game. By betting at the right time and in the right amounts,
players can win more pots by bluffing their opponents into folding, they can augment the size of
pots that they plan to win, and they can otherwise manipulate their opponents into making
mistakes. Thus, unlike a gambling bet, a poker bet is never solely a wager on the outcome of a
chance event; it is instead a form of strategic communication, like a chess move, or a bid in
bridge.
53.

For the reasons above, I conclude that skill predominates over chance in Texas

HoldEm Poker. Thus, in my opinion, it would be incorrect to describe Texas HoldEm as a game
of chance.
References
[1] Alon, N. (2007). Poker, chance and skill. Available at
http://www.cs.tau.ac.il/~nogaa/PDFS/skill4.pdf.
[2] Borm, P., & van der Genugten, B. (2001). On a relative measure of skill for games with
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chance elements, TOP Official Journal of the Spanish Society of Statistics and Operations
Research, Vol. 9, No. 1, pp. 91-114.
[3] Cabot, A.N., & Hannum, R.C. (2005). Poker: Public policy, law, mathematics and the future
of an American tradition. T.M. Cooley L. Rev., Vol. 22, No. 3, pp. 443-513.
[4] Croson, R., Fishman, P., & Pope, D.G. (2008). Poker superstars: Skill or luck? Chance, Vol.
21, No. 4, pp. 25-28.
[5] Dedonno, M.A., & Detterman, D.K. (2008). Poker is a skill. Gaming L. Rev., Vol. 12, pp. 3136.
[6] Hannum, R.C., & Cabot, A.N. (2009). Toward legalization of poker: The skill vs. chance
debate. Gaming Research & Review Journal, Vol. 13, No. 1, pp 1-20.
[7] Hope, P., & McCulloch, S. (2009). Statistical Analysis of Texas HoldEm. Available at:
http://www.cigital.com/resources/gaming/poker/100M-Hand-AnalysisReport.pdf.

Professor Robert C. Hannum

Subscribed and sworn to before me
this
day of
Notary Public, State of
My Commission Expires
is permanent

, 2015

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