Poker Strategy With Ed Miller: Gambling Skills Are Poker Skills

When you play poker for a while it’s very easy to get bogged down in the details. What should I do with A-10 here? Should I bet out or check-raise there? Getting lost in the poker strategy weeds can end up being costly long-term, because poker is a gambling game, and general gambling concepts ultimately dominate.

Now I’m not saying it’s possible to be good at poker while ignoring the details of poker strategy. You do have to think about what to do with A-10 or when to check-raise. But my experience with many poker players is that they are too focused on the details and not enough on the big picture. Their ignorance of some important general gambling concepts causes them to analyze the detailed situations incorrectly. Here are just a few examples where poker players reach bad conclusions by misapplying gambling concepts:

• Waiting for a better spot
• Playing small ball
• Considering rule variations (like straddles, playing with “the rock” and so on)
• Table selection
• Many aspects of tournament poker

For my columns in 2018, I’m going to discuss gambling ideas more generally, and then show you how to apply the ideas to poker. I’ll also point out how the concepts are often misapplied in conventional poker wisdom.

I will draw examples from other types of gambling. There are two reasons. First, poker is very complicated with a lot of moving parts compared to other types of gambling. It’s often easier to explain the concept using something else as an example and then think about how it applies to poker. Second, poker players often dabble in other types of gambling, and so the examples may also help you directly.

I’ll kick this series of articles off with a very simple idea. If you want to win at gambling, variance is your friend.

Variance Is Your Friend

I know. Nits are already cringing. I can’t tell you how many conversations I’ve had over the years with poker players who are thinking as creatively as they can about how to reduce their variance. I can probably count on one hand the conversations I’ve had with poker players about creative ways to increase variance.

Variance is the enemy. Let’s reduce variance. Slow and steady winning is the ideal, right?

Nope. Not at all. That’s a very backwards way to think about gambling.

Think about how casinos work. Every bet in a casino is designed to offer the prospective player a negative expected value. (I’ll talk more about expected value in future articles.) Every bet is supposed to have a house edge. This house edge is the “price” you’re paying for the service of playing a gambling game.

Forget it for a moment if you’re thinking, “I would never play a game with a house edge.” In fact, if that’s your first thought, you’re squarely in my target audience here, because you’re probably also a variance-reducer.

Put yourself in the shoes of one of the many millions of people who do play these games. How many of them do you think are deluding themselves and actually think that if they play long enough they’re gonna get rich?

Honestly very few. Most of them know the house has an edge, yet they play the games anyway. Why? They’re not just lighting money on fire, though you may be tempted to see it that way. They’re buying something—variance.

The variance makes the game. Think about roulette. If you bet $38 on one number, you have a 1 in 38 chance of winning 35 times your bet, or $1,330. That averages out to finishing each spin with $36. (On 37 of 38 spins, you finish with $0, and on 1 of 38 you finish with $1,368. If you divide $1,368 by 38 you get $36.)

Another way to finish each spin with $36 is to bet $1 on each of the 38 numbers. You would be guaranteed to “win” on every spin, and your $38 would turn into $36 every time.
From an expected value perspective, betting it all on one number and betting $1 on each number is exactly the same. But you see people bet it all on one number (or a few numbers) all the time—that’s the normal way to play the game. If you saw someone betting every single number, however, you’d think they were nuts.

The cost is the same. The average loss per spin is the same. The average loss per hour is the same. But betting every number seems nuts because you get nothing in return for your loss. If you bet the normal way, you get variance in return. This is the transaction.

Variance provides entertainment, triggers positive and negative emotions, and if I’m honest can feed addictions. People pay for these things. Lack of variance does none of this and no one will pay for that.

If you’re running a casino, variance is your friend. Without it, you have no product and likely will have no customers.

If you’re a winning gambler, it can be helpful sometimes to think of yourself as a mini casino. You win for the same reason the casino does—by making a long series of mostly positive expectation bets. Your “customers”—in poker these would be your opponents—will want something for their losses. They want variance. Even if they think they don’t, they do. Because without variance, the losing players would realize immediately that they’re wasting money and time playing and stop. They’re buying variance, just like your average casino gambler.

Don’t be nitty. Don’t try to think of every possible way to eliminate variance. It may feel like doing so is in your long-term interest, but it’s not. First, while it costs money to buy variance, it also often costs money to sell variance. (I’ll discuss this idea in more depth in future articles.) You usually have to pay for the privilege of winning with less variance.

On top of having to pay for less variance, your opponents will also notice the lack of variance. They may start complaining that you never “give them action.” Poker always has some variance, so they won’t quit on you immediately, but over time they will notice that they aren’t getting their money’s worth by gambling with you, and you’ll lose their business.

Of course, there’s a limit to this idea. Your bankroll limits how much variance you have to sell, and if you sell it too cheaply (by taking on even more variance than necessary to get the expected value out of your bets), then you will have to play smaller (and therefore win less overall) to compensate. This isn’t good either.

Your goal is to balance variance. Too much variance is no good because it hits your bankroll requirements too hard. But too little variance is also no good, because you’re ultimately “ripping off” your customers by not giving them something in return for their losses. Over time, they will notice, and you’ll slowly lose your opportunities. As a winning poker player, variance is your friend. ♠

Ed’s newest book, The Course: Serious Hold ‘Em Strategy For Smart Players is available now at his website edmillerpoker.com. You can also find original articles and instructional videos by Ed at the training site redchippoker.com.

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