When looking for answers to difficult questions, one needs to look no further than information or prediction markets. Much like the stock or options markets, these rapidly growing exchanges offer a bet (and price) that is directly related the likelihood of an event happening. Thse markets have been eerily accurate in their past predictions of United States presidents, Oscar-winning movies, and interest rate decisions, among many others.
The premise is simple: for any event, allow for the natural forces of the market to decide the odds and the price, based on all the information available.
Betfair is the largest such market in the world, with over 1 million clients. Since the British exchange was launched in June, 2000,
Betfair bettors (and their money) have proven to be remarkably accurate. As such,
Betfair is where we look for insight into the "is poker skill or luck?" dilemma.
The 2006
World Series of Poker championship event had 8,773 participants. As such, the likelihood of anyone (Joe Average) making the final table was 877-to-1 (10 players at the table out of 8,773 starting players). Generally speaking, any participant would make the final table once in 877 events.
During the same 2006 event, the likelihood of
Phil Ivey (considered by many to be the best player in the world and holder of five WSOP bracelets) making it to the final table was 27-1. Phil is expected to make the final table once in 27 events.
So as we see, the market believes that Phil Ivey is 32.5 times (877/27) more likely to make it to the final table than Joe Average. If poker was all luck and no skill, the market would give Phil Ivey the same chance of making the final table as Joe Average. Put in another way, would you bet on Joe Average over Phil Ivey? Me neither.
To learn more about information markets, visit
Betfair.
For more Happenings in Europe, visit
CardPlayerEurope.com
