Poker Strategy With Ed Miller: To Deal Or Not To Deal

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Well, someone did it again. And it got a lot of press, so I’d better talk about it. Before The Masters golf tournament in April 2017, a fellow named Spencer McIlmoyle placed a three-leg parlay bet for $27.45. He bet that Sergio Garcia would win the Masters at 45-to-1. Then he bet that Alabama would win the NCAA football championship at 4-to-1. And finally he bet that the New England Patriots would win Super Bowl LII at 5.5-to-1.

The way parlay bets work is that you must win all the propositions on your bet or else you lose. But if you do win them all, you multiply the odds together to see how much you won. So this 45-to-1 and 4-to-1 and 5.5-to-1 parlay is equivalent to a single bet that pays 1,494-to-1. That’s a win of a little over $41,000 on the $27.45 bet.

Sure enough, Garcia won The Masters. At 45-to-1 it was a pretty big longshot. Then Alabama won the NCAA football championship. And it was the divisional round of the NFL playoffs and the Patriots were the top seed in the AFC and the betting favorite to win the Super Bowl.

Mr. McIlmoyle began to get nervous about his bet. He posted it to Twitter and asked what he should do—if he should hedge the bet, and if so, how.

The Patriots won their first game fairly easily. But in the second playoff game, they were losing 20-10 to the Jacksonville Jaguars near the beginning of the fourth quarter. If the Patriots didn’t come back and win the game, despite hitting the first two propositions, Mr. McIlmoyle’s whole bet would lose.

Mr. McIlmoyle hit the panic button. The sportsbook he placed the bet at offers to settle parlay bets early rather than make you sweat out the whole bet. It’s like the game show Deal or No Deal. They offer you a price to buy out your bet, and you can either take it or not. With the Patriots down two scores in the fourth quarter, he sold his bet back to the book for around $6,000.

It goes without saying that if the book is offering a price and it’s either take it or leave it, the book will try to lowball you. After all, they’re not all that worried about the Patriots winning or not — your little parlay is just a tiny part of their total risk on the game. So they offer you a deal that’s good for them and if you take it, great. And if you don’t, no big deal.

The Patriots went on to win the game and Mr. McIlmoyle publicly flagellated himself for bailing on the bet. Oh well.

Here’s the thing. First, Mr. McIlmoyle gave the sportsbook an extra advantage over him beyond the one that they price into the bets in the first place. By selling out on their terms, he gave the book the edge on him coming and going. If you gamble like this over the long term, it will cost you a lot of extra money. You can save yourself from this fate with a little forethought. (In past articles I have talked about how this thought process applies just as equally to poker tournaments.)

Let’s talk about how Mr. McIlmoyle could get what he wanted without having to sell to the books on their terms. So he wanted to bet on three things—Sergio Garcia, Alabama, and the Patriots. The events occurred in that order, so the biggest decision (if it got that far) would be on the Patriots. He could have thought ahead. “How much of a decision am I going to want on the Patriots if it gets that far?”

In reality, he had a $41,000 decision, and that was clearly way too much. Maybe he would have been more comfortable with $10,000 or $5,000 or $3,000. Obviously I can’t say. That’s a personal decision. Let’s say for the sake of argument that a $5,000 decision would give him exactly what he wanted out of the gamble. It would provide just the right amount of rush after a win, the right amount of excitement leading up to it, without any of the dread that comes with having too much money on the line.

Since the total parlay paid 1,494-to-1, then to have a $5,000 decision on the end he could have bet $3.34 on it. Thinking ahead like this helps to make sure you don’t accidentally overgamble.

“But Ed,” you might say, “he didn’t want to gamble just three dollars. He wanted more action than that.”

Ok, fair enough. He could have used some of the rest of the $27.45 that he bet making bets on the other legs of the parlay. For example, maybe he could have bet $10 just on Sergio Garcia to win the Masters. If that happens, he collects $450 and doesn’t have to sweat the football.

Maybe splash a little on Garcia and Alabama alone. Or Garcia and Patriots. Or Alabama and Patriots. And so forth. Basically he could break up the bet into a number of other bets—while still keeping just enough on the whole enchilada parlay—so that he’s happy all the way through as the legs start winning and he’s in a good mindset rather than a desperate one when the Patriots stumble a little bit in one of their final games.

Poker Tournaments and Variance

Okay. So the exact same logic applies to poker tournaments. Too often, players enter poker tournaments, but once they get to the final table, they realize that they’re playing for way more money than they are comfortable playing for. They are desperate to make a deal, and they often end up giving away too much of their equity to a better bankrolled, more confident player. While winning $20,000 still feels like a win even when your equity was $26,000, if you consistently (and predictably) deal away your equity in the situations where it matters most, you will really hurt your long term results.

So what to do? First, think ahead before entering a tournament. Think about how much money will be on the final table, and don’t just take a more-is-better attitude. More isn’t better if as soon as the more gets close, you start freaking out.

Think about how much you’re comfortable playing for. If the final table money is way beyond that, honestly you probably shouldn’t play the tournament.

Instead, find some smaller tournaments and grind those. Get to some final tables. Don’t make deals. Get and stay comfortable playing for the prizes at the top of those tournaments.

Then, if you win a few of those and your bankroll is getting bloated, revisit the tournament you were thinking about playing in before. Do those prizes still feel impossibly big? Or will you be in the right mental state once the final table hits to play your best and not deal away your equity. As long as you are planning ahead, you will make better gambling decisions and your results will be better in the long run. ♠

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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