History of Poker

Wednesday, May 12, 2004, Bellagio Resort and Casino. Resting elbows and forearms on the spongy beige cushion, two men face off at a table designed for 10 players. The dealer lifts the green deck from the shuffling gadget recessed into the baize on her left, and slides in the brown deck she used for the previous hand. She cuts the green deck. The freshly unknowable sequence of the 52 cards will determine who wins the next pot.



Or it won't. The man on the right, Todd Brunson, will have something to say about that. He's been doing this for a living since he turned 21 13 years ago, and he's earned a reputation for playing what is called smash-mouth poker. Riffling together a stack of cranberry and white $25,000 chips, he shifts his weight in his chair to get comfortable. At 6 feet, 260 pounds, he calls to mind a retired fullback still issued plenty of meal money. Above his ginger beard and what appear to be baize-colored eyes, he sports a conventional haircut – until you spot the ponytail plunging to the small of his back, which makes it a mulletus maximus. Instead of waiting for the shuffle to favor him, Brunson prefers to run over opponents with a ferocious assault of raises, irrespective of the cards they've been dealt.



Andy Beal, the man in the black headphones, is an unlikely candidate for roadkill. Eighteen years older than Brunson, he is 6 feet 2 inches tall and broad-shouldered, and exceptionally trim for a middle-aged guy with a desk job. He recently lost 30 pounds on the Atkins diet, and two years earlier, he survived a broadside collision in which both vehicles were totaled. He flew in on Tuesday from Dallas, where he normally starts work at Loan Acceptance Corporation by 7 a.m. With coffee-brown hair swept back from his ruddy forehead, he could be either a cowboy financier or a family guy on a Vegas vacation. He's both. Poker is something he does for enlightenment and to challenge himself. It's a math- and money-based contest in which he has less of a pedigree than Brunson, whose father, Doyle, happens to be the back-to-back world champion who literally wrote the book, Super/System, on how to run over a game. Yet Beal has at least as much computational firepower as his opponent, and much deeper pockets. Loan Acceptance is a subsidiary of Beal Bank, with assets of $7.2 billion, and Andy isn't the guy who pours quarters and dimes into the coin-counting machine.



The game he is playing with Todd is heads-up limit hold'em, with fixed bets of $100,000 before and after the flop, and $200,000 after the fourth and fifth community cards are revealed. No one has ever played poker this high, with $2 million pots being won every five minutes or so. Right now, Todd holds about a 2-1 lead: $15 million to just under $8 million. Andy bought in for $10 million – four racks of cranberries – and has another $5 million on reserve in the cage. Todd went to the cage with $11.9 million, but Bellagio had only about $5 million in cranberries left, so he had to settle for $7 million in flags – 14 100-chip racks of the red, white, and blue $5,000 chips. Whenever he runs low on big chips, he pushes two racks of flags over to Andy in exchange for two 20-chip stacks of cranberries.



The match on Table 1 has drawn a sizable audience, with many people standing on tiptoes along the rail, others craning their necks from seats at adjacent tables. A few of them, including Todd's father, have shares in Todd's action. The stakes are so high that no single player besides Beal can afford them. The Brunsons and several other pros – including Chip Reese, Jennifer Harman, Howard Lederer, Chau Giang, David Grey, and Barry Greenstein – have been forced to pool their resources to be able to compete as a tag-team against the lone Texan. Along with Lederer and Harman, the younger Brunson has been their most successful representative.



Although he is winning and playing well, Todd hasn't been able to concentrate at anything close to 100 percent. He can't get his mind off the death a few days ago of his best friend's Russian-born wife. Todd's wife, Angela, was also born in Russia, and the two couples have been close since they met. Todd still doesn't know whether he should be playing this career-defining match or home with his wife and their friend.



Perhaps in part because of Todd's grief and distraction, Andy roared back over the next 90 minutes, catching hands, keeping the pressure on, and moving ahead – or, as the pros like to say, "getting winner" – by just over $7 million. But then Todd caught some hands, regained his focus, and staged a healthy comeback. By 9:50 p.m., he was $1.1 million ahead – five and a half big bets, about the size of an average pot. Having regained the momentum, Todd preferred to keep playing. "Once I get rolling and draw a bead on a guy," he later told me, "I wanna play for three days." Andy, on the other hand, felt himself hitting a wall. His body clock, set on Central Time, registered midnight. He was also aware that his opponent's poker day usually began at around 5 p.m. In terms of their habits and biorhythms, this was bedtime for him and prime time for Todd, so he decided to call it a night. He thanked Todd and his partners for the competition, and arranged to resume the match at 7 a.m., when he'd face a new player while enjoying the circadian advantage.



When the series of heads-up showdowns began in December 2001, Andy Beal had been playing blackjack at Strip casinos for 25 years and doing pretty well for himself. His numbers-crunching acumen and Xerox recall enabled him to count into a five- or six-deck shoe, giving him about a 3 percent edge against the house. By the late '90s, however, the more Wall Street-minded casinos were starting to flat-bet him – barring him not from their premises, as the Mob-controlled joints used to do, but from raising his bet when the count was in his favor. After some testy exchanges with pit bosses, Beal took his chips to the Bellagio poker room, tucked away next to the sportsbook of that posh, almost tranquil casino. The hold'em, Omaha, and stud games ranged from $4-$8 to $30-$60. Two steps up, in the corner, was the high-stakes area, five tables segregated from the 16 others with a hip-high row of pillars. Flat-screen TVs shared wall space with murals of masked Venetians trysting, playing cards, toting up stacks of gold lucre. The first seat Beal found was in an $80-$160 hold'em game. He exchanged one of the flags he'd been betting on single hands of blackjack for two and a half racks of orange $20 chips. Expertise wouldn't be held against him in this nine-handed game. The only problem was, he didn't have any.



Learning the rules and basic tactics of limit hold'em by the seat of his pants, Beal quickly gathered that solid play at a full table involved folding most of your starting hands. The blackjack player in him got impatient. He also observed that at Table 1 over in the corner, two men – Ted Forrest and Chip Reese, as it happened – were waiting for the white-chip game to start. (Bellagio's $500 chips are white, and this game had limits of $2,000 and $4,000.) Down sat the well-bankrolled novice. Playing Reese and Forrest three-handed is usually quicker than filing a Chapter 11 petition, but since Beal didn't know them from Adam and would be risking a small fraction of a normal day's income, he was hardly afraid. He just wanted to play for more interesting stakes and not have to fold half his hands. He also found the slippery intricacy of three-handed poker decisions much more challenging than those he'd been making in blackjack. And because of a warm run of cards, he managed to hold his own until the other white-chip maestros began to arrive – the Brunsons, Giang, Harman, and Greenstein. They introduced themselves and invited him to play in their game.



Unfortunately for them, or for him, Beal had a plane to catch. He explained that his family and business responsibilities required him to head for the airport. But he proposed that during his next trip, three months hence, one of them play him heads up with limits of $10,000-$20,000. Todd Brunson assumed he was kidding, but told him, "We'll be sitting right here at this table."



Back home in Dallas, Beal picked up Super/System and a few other team-written primers by McEvoy and Cloutier, Sklansky and Malmuth. He was impressed by the rigorous logic but disappointed by how little attention they paid to heads-up strategy. Reading the no-limit section of Super/System, he recognized a kindred spirit in the senior Brunson's creative attack mode. He was also much taken with Sklansky's definitive wonk treatise, The Theory of Poker. The more Beal studied these books, the more poker felt like an extension of his commercial and other endeavors.



Beal had stuck his toe into Texas real estate back in 1976 while still a math and business major at Baylor. His watershed deal was buying, sight unseen, a 150-unit apartment building in Waco. Barely outbidding his competitors, he effectively went all in, risking his life savings and then some. Within months, he had made his first million and discovered his knack for giving due diligence – evaluating the fundamentals, reading economic terrain, extrapolating a deal's future upside. By 1988, when the savings-and-loan crisis was bankrupting thousands of financial institutions, Beal decided to open one. He launched Beal Bank with a $3 million investment and began buying defaulted loans for 40 cents on the dollar. Six years later, the bank's capitalization reached $1.5 billion, with assets of more than $7 billion. Its Tier 1 capital represented almost a quarter of its assets, even though the FDIC required only a 5 percent capital-to-assets ratio. The bank's core business remains commercial real estate, though it also funds loans and purchases debt securities. In 2003, American Banker gave it the highest rating among institutions with assets greater than $500 million.



There was more to Beal's life than making money, however. A math geek since high school, he had continued to brood over Pierre Fermat's famous Last Theorem, that Ax + Bx = Cx is impossible if x is a prime number. Who cares about such things? Theoretical physicists and mathematicians, the kind of folks who eventually discover things like relativity, quantum mechanics, black holes, nuclear fusion, and the dark matter drifting through space. Back on earth, Beal constructed several algorithms and programmed a dozen of his bank's computers to test a related but brand-new hypothesis, that if Ax + By = Cz, where A, B, C, x, y, and z are positive integers and x, y, and z are all greater than 2, then A, B, and C must have a common prime factor. When his computers produced no exceptions, the discovery was enthusiastically hailed by the math world. In 1993, under the auspices of the American Mathematics Society, Beal endowed a prize (originally $5,000, eventually rising to $100,000) to encourage young mathematicians to prove or disprove what is now called the Beal Conjecture.



Meanwhile, in 1995, he launched Beal Aerospace, with the goal of producing expendable rockets. Not only could their payloads be profitable, but he believed they could serve as prototypes for intergalactic escape-and-rescue vehicles. NASA's progress in both of these areas had failed to impress him, but instead of writing his congressman or griping to dinner guests, he invested $200 million in an effort to do a better job. While NASA, Boeing, and Lockheed Martin had put their faith in reusable shuttles, Beal Aerospace focused on what its founder called "evolved expendable launch vehicles." The project had sprung from his conviction – a "mathematical certainty," he told me – that an asteroid will eventually strike the earth, destroying all but the most primitive forms of life. To avoid extinction, humans will need to colonize other planets.



The aerospace venture failed for a number of reasons. One was a territorial dispute between Guyana and Venezuela about the site of the spaceport. (The site must be near the equator, where much less fuel is required to launch a payload into orbit.) And not only did the federal government subsidize Beal's rivals, but the State Department refused to grant him an export license to launch from outside the U.S., citing the Missile Technology Control Regime, an outmoded 1987 treaty that as Beal pointed out, fails to distinguish between ballistic missiles and peaceful uses, and is ignored by rogue states and terrorists, anyway.



As Beal saw his poker experiment, taking on the world's best hold'em players wasn't terribly different from buying and selling real estate, starting a bank, building a deep-space rocket, or probing the conundrums of theoretical mathematics. They all required intelligence, curiosity, foresight, and creative risk management, not to mention being kinda fun. Yet why aim so high, we might ask, and on so many fronts? Too much money on his hands? An ego spinning out of control? One clue may be found on the wall of his office, which features the usual photographs of his family, friends, and business associates. Above everything else is a framed sheet of white paper with 12 printed words: Only those who attempt the absurd will achieve the impossible. – Albert Einstein.