The Morality of Online Poker
Dec 10, 2013

The Morality of Online Poker

For years, I have engaged in a rather profitable side hobby: online poker. Poker is a fascinating game with layers upon layers of complexity, and I love the challenge, the excitement, and the competition of it. It is also very profitable, even for someone like me who doesn't intend to move beyond small stakes. Anybody that spends a considerable portion of their life doing something, particularly if they are making money at that something, ought at some point to step back and consider the ramifications of their actions. Am I doing something morally praiseworthy or morally objectionable?

In this post I thus take up the question of the morality of online poker. The short answer is "it's not worse than many other things we commonly accept in society". Before I get into that, let's take a look at how I see the state of the game:

Regs vs Fishes:
People who play online poker are in one of two camps, typically referred to as "regs" and "fishes". I am in the regular camp, having played millions of hands and having thoroughly studied the game to develop my variation of the standard "tight aggressive" playing style that most regulars adhere to. The regulars multitable (I usually play 12-15 tables) and use a database software that gives a heads up display showing a range of statistics on how each player plays based on their observed history, which is used to easily make it possible to profile other players by playing style. The "fishes" are recreational players, who deposit 10 or 100 or, rarely for my stakes, 1000 bucks online and want to have some fun gambling.

When a recreational player sits down at a poker table, they are almost immediately identified as such. There are initial clues before you observe a single hand: displaying a low site-specific VIP status (regs hide it or show a high VIP status), only playing a single table (regs hide it or play many tables), not buying in full (regs auto buy in full unless they are a particular breed called shortstackers). Within five hands, most recreational players have made basic mistakes (making nonstandard bet sizes, limping preflop, calling down with trash, etc) such that it removes all doubt. Every regular at the table is aware of who the fish is and how to generally play against fishes. Within a pretty small number of hands, the fish is not just identified as a fish, but has fallen into one of several basic patterns that most recreational players fall into. The Heads Up Display starts lighting off with fancy colours showing stats where the fish is making mistakes to be exploited. The regular identifies the style of fish, and knows from the combination of experience and study precisely how to optimally play against them. In almost all cases, the fish is quickly relieved of all their money with the only question being which of the regulars at the table gets it. Of course, poker does have an element of luck to it and a fish can go on a few buyin upswing. A reg can't - and shouldn't - fold KK to a fish's AA. But the massive discrepancy in skill between the regs and fishes is such that the fish almost always loses it back in the same playing session, and if not then to some other regs in subsequent session. Few last 100 hands with their deposit, and I've played millions.

Unfortunately, while the view for the fishes is dismal - near certainty of quickly losing - the opposite is not necessarily true for the regulars. The trick for the regulars is to be able to win enough off of the fishes, and to hold their ground against the other regulars, so that the money being lost by the fishes isn't just raked away and ends up in the poker companies pockets. Rake is very high, and even good regular winrates are relatively low, measured in a few big blinds per hundred hands (hence needing massive volume). Because I am one of the better and more experienced low stakes regulars, in a rakeless environment I would turn out a small profit against other regulars (and a massive profit against fishes). But with the rake, playing against other regulars is, on average, a losing proposition that one is only forced into for the chance of sitting at a table with a one or two fishes. One final note is that this division is not hard: there are bad regulars, less bad fishes, people who know some of the standard lines to take but make many mistakes etc. For the purposes of this post, however, I will just treat the division as being pretty distinct.

An information asymmetry:
Online poker is predicted on a basic information asymmetry. The recreational players are entirely unaware of how massive the skill advantage is between regs and fishes. Heck, they don't even know the competition is between regs and fishes. They are certainly not aware of heads up displays, no idea there is canonical styles they ought to play, no idea how quickly they are identified as fishes, no idea just how trivial it is for regulars to exploit them, no idea that most of their actions are unquestionably mistakes. Most importantly, they are entirely unaware of the likelihood - approaching certainty - of their losing. They believe it is gambling. They believe that anyone can win. The reality is that while poker is probabilistic, it is a highly skill based game and in the not that long run the fish is going to lose.

The probabilistic element actually exacerbates the deception. In many skill games (basketball, video games, chess, etc...) when a very good and experienced player is pitted against a very poor player, there quickly becomes no illusion as to who the worse player is. With poker, however, the probabilistic part can make it so that the recreational player continues playing for a long time before realizing, if they ever do, the extent to which they are at a disadvantage. Any loss can be chalked up as being merely a run of bad luck. Even for a regular, it takes an enormous number of hands (perhaps fifty thousand or more) before one can claim a consistent win rate at a particular stake. Incidentally, this is the main reason why making other skill games for money is nowhere near as successful as for poker; to get bad players to pay money they require an illusion that they can win. The probabilistic nature provides that illusion.

There can be no sugar coating this: online poker is about exploiting people. It is a calculated attempt to take the maximum amount of money from someone else. The first retort to this argument is that online poker is voluntary. Everyone understands the point is to win money off each other, and know or have the ability to know the basic rules and mechanics of the game. However, because of the massive information asymmetry discussed above, the game that the recreational players think they are buying into is very different from the reality. It is a voluntary act, but not an informed voluntary act.

Is this morally objectionable?
In the above I painted the most objectionable picture of online poker I could, a picture about exploitation and deception of unaware people for profit. These are typically not words associated with morally praiseworthy acts and, indeed, I don't think one can reasonable argue that online poker is morally praiseworthy. But it is truly morally objectionable, as these negative words might imply?

My defence, if you can call it that, of online poker is that these same characteristics manifest themselves repeatedly in our society. In most of the transactions we do, we aim to maximize our own personal profit at the expense of others. We gladly take the maximum profit when investing in stocks, sell our house for the maximum we can, buy a new house for the minimum we can, etc. There are exceptions (donations, tipping, choosing more expensive but ethical businesses, etc), of course, and some of these exceptions represent the better parts of our society, but this basic dynamic of maximizing personal gain is certainly integral to a huge number of societal institutions.

More than just trying to maximize our profit without caring much who suffers for it, many societal actions also involve various information asymmetries. The average person, for instance, who tries to trade stocks is likewise at a very significant information disadvantage in that the experts in the field - the financial industry - know vastly more and are capable of making vastly superior decisions. This trickles down through many aspects of society. Any time an average person engages with an expert, whether that is a realtor, retailer, lawyer, etc, the potential for such an information asymmetry is possible and the average person is constantly being faced with the possibility of making less than optimal decisions based on less than perfect information. In the free market, the information asymmetry between different market actors whether they be people, companies, or governments is often the dominant way individuals profit. Extending this point further, beyond just information asymmetries there are asymmetries in all sorts of other factors whether it is access to certain resources, capabilities or other attributes that people use to maximize their own profit.

It isn't just online poker, much of our society is entirely predicated on precisely the same kind of exploitation based on information or other asymmetries. If we were to bring strong moral condemnation down on online poker, I don't believe it is possible to do so without either being hypocritical or condemning much of society along with it. Indeed, there are other similar components in society (such as aspects of our financial system) that are both much larger in scale and much more coercive in effectively requiring people to participate unlike the more voluntary nature of online poker. Hence, I don't even think that online poker is uniquely bad among similar bad things in society.

Gambling addiction:
That gambling addiction exists adds a further wrinkle to the above defence. It isn't just that one is exploitively manipulating an information asymmetry to profit, one is doing this against people with a legitimate mental health problem.

First, an observational point. Because I have played with many tens of thousands of players, my database provides some grounding for the frequency of various player types. The players I see over and over and play for tens or thousands of hands with are, overwhelmingly, regulars. As in, those that play the most are winners, and overwhelmingly so; those that are worst I see overwhelmingly only once and never again. There are bad regulars, of course, those that break even or lose a little, but the drooling fish who is tossing his money away simply doesn't reappear over and over again. Most instaquit when they get stacked, some rebuy a few times but I almost never see a consistent pattern of massive loses being compounded over and over. Granted, I play small stakes so I don't see those with big problems losing massive sums, and I am not trying to say gambling problems don't exist. However, it is worth noting that gambling addiction would appear to be relatively rare; most losers appear to deposit fifty or a few hundred, play till they lose, and quit. It is, for most, entertainment, much like going to the bar.

Be that as it may, I still take the issue seriously, and believe steps should be taken. It is precisely because of gambling addiction problems that I think online poker should be legal, heavily regulated, and taxed. Most sites offer voluntary self exclusions and the like, but the ability to have synchronized player databases to provide exclusions from all sites in a jurisdiction at once to problem gamblers, and have funds from taxation (and requirements on online poker operators to fund them these themselves) poured into proactive prevention and help for gambling addictions  could do much to defang the problem.

Back to the morality of this. A similar conclusion can be drawn here as before: the addiction part of online poker is not worse than many other industries we accept. Take the analogy with alcohol, for instance. Many people have serious alcohol addiction problems and similarly we can, and to some extent do, take steps to try and mitigate this problem. However, we don't invalidate as immoral every person involved in any way in the alcohol industry. It is not typically considered immoral to profit off of owning a bar, even though undoubtedly some percent of patrons will be alcoholics. Automakers are not morally culpable for deaths in drunk driving situations. I believe that we should work - and work hard - to address and deal with all mental health issues, gambling addiction among them. But that is not realistically solved by banning the entire enterprise nor does it make anyone involved in it morally culpable.

My moral framework:
On this blog I largely advocate for positions that I believe benefit society. I believe, for instance, in governance that works towards our better values and enacts positive change. It is a sort of macroscopic altruism, if you will, that tries to identify not merely neutral or nonnegative acts, but morally praiseworthy ones, and tries to encourage society and government to act in these ways. I don't, however, expect the same at the micro or individual level. That is, I accept that people always have and always will act predominantly in their own self interest. It is a larger theme of mine that we often suppress (perhaps to make ourselves feel better) just how large the role of selfishness (or close in-group preference such as families) is in our society and how off to the side our altruistic tendencies usually are. While we may individually act selfishly, we can come together through societal structures, whether they be cultural customs of government itself, to enact altruistic ends.

Online poker certainly can't be claimed to be a morally praiseworthy act. It is a selfish act, one that is exploitive and uses distinct information asymmetries to one's advantage. However, this is not so very different from a wide range of other activities long since enshrined as acceptable in our society. You can reject the above moral framework, but whatever moral framework you choose will find it hard to accept these other actions and reject online poker. For now, at least, that is enough for me to keep on playing.

Thoughts on this post? Comment below!

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2 comments: said...

Our society is inherently flawed because it is a capitalistic,money driven society. Theocratic societies worship god and tradition, while capitalist societies worship money. No amount of morality is going to change that about American society. The system gives rise to the morals of a society, it is not the other way around. So online poker is not going away as long as people who make the money, for example Poker Stars, continues to have a strong pull on our government decisions. The knowledge gap is irrelevant because the people making the money do not mind. Ethics, after all, is bad for business.

Carrie Blanc said...

In modern times, poker is now having a big spectator sport. Millions of people watch these poker online and experience only the best. players duke it out on live television to win loads and loads of money. With the advent of the internet, poker has also become digital. In fact aside from the traditional card dealing, it has other versions like video poker. With the advance technology of Internet and major online poker rooms buying publicity in major sports TV channels and tournaments, online poker really benefited in recent years.

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