# Game Theory and Poker

Save this PDF as:

Size: px
Start display at page:

## Transcription

1 Game Theory and Poker Jason Swanson April, 2005 Abstract An extremely simplified version of poker is completely solved from a game theoretic standpoint. The actual properties of the optimal solution are then compared to various common notions about game theory and bluffing in poker. No specialized mathematical knowledge is needed to understand this material. Introduction Let us consider a simple card game which we will call One Card Poker. The game is played with two players and a -card deck. The deck consists of an ace, a deuce, and a trey. To begin the game, one of the players is chosen to be the dealer; the other will be called the opener. After the dealer is selected, each player antes \$00, forming a \$200 pot. Then, the dealer deals one card to each player. After the players look at their cards, the opener is the first to act. He may check or bet \$00. If he bets, then the dealer may either call or fold. If the dealer folds, the opener takes the pot; if the dealer calls, there is a showdown and the high card takes the pot. The ace is considered the lowest card. If the opener begins the game with a check, then the dealer may either check or bet \$00. If the dealer checks, there is a showdown; otherwise, the opener must either call or fold. Note that there is no raising in this game. With the rules of One Card Poker in place, let us consider the following situation: the dealer is dealt the deuce and the opener bets. The dealer s hand can beat only a bluff. What is the game-theoretic optimal frequency with which the dealer should call in this situation? In The Theory of Poker, David Sklansky discusses using game theory to call a possible bluff. He writes, Usually when your hand can beat only a bluff, you use your experience and judgment to determine the chances your opponent is bluffing... However, against an opponent whose judgment is as good as yours or better than yours, or one who is capable of using game theory to bluff, you in your turn can use game theory to thwart that player or at least minimize his profits. He then gives the following example:

2 If your opponent bets \$20 to win \$00, he is getting 5-to- on a bluff. Therefore, you make the odds 5-to- against your folding. That is, you must call five times and fold once. Motivated by this, let us return to our example. The dealer has the deuce and can beat only a bluff. The opener has bet \$00 into a \$200 pot, giving him 2-to- on a bluff. We might therefore think that the dealer should call twice and fold once. Or, in other words, the dealer should call with his deuce with probability 2. As we will see, however, this is wrong. The game-theoretic optimal frequency with which the dealer should call with the deuce is. Another interesting example is the following: the dealer is dealt the ace and the opener checks. Should the dealer bluff? If the opener holds the trey, then a bluff is futile, but if the opener holds the deuce, then a bluff might work. Suppose that the dealer knows that the opener will always come out betting when he holds the trey. Then since the opener checked here, the dealer can be certain that the opener holds the deuce. In this situation, what is the game-theoretic optimal frequency with which the dealer should bluff? Again, let us return to the examples in The Theory of Poker: when I bet my \$00, creating a \$00 pot, my opponent was getting -to- odds from the pot. Therefore my optimum strategy was... [to make] the odds against my bluffing -to-. Since the dealer will always bet with the trey in this situation, he should bluff with the ace of the time in order to make the odds -to- against a bluff. But the analysis in this example began with the supposition that the opener will always bet when he holds the trey. What if the opener is a tricky player who will sometimes check with the trey, trying to goad the dealer into bluffing? Or, for that matter, what if the opener has the peculiar habit of never betting when he holds the trey? If he also checks whenever he holds the deuce, then what can the dealer conclude? The dealer is holding the ace and the opener has checked. Half the time, the opener will have the trey and a bluff is futile. The other half of the time, the opener will hold the deuce, and of those times, the dealer ought to bluff. So perhaps, against this opponent, the optimal frequency with which the dealer should bluff is. 6 But again, as we will see, this is wrong. The dealer s game-theoretic optimal bluffing frequency is, regardless of how often the opener checks with the trey. In fact, if the dealer tries bluffing only of the time, there is a strategy that the opener can employ a strategy 6 which involves always checking with the trey that capitalizes on this mistake. Finally, let us consider one last example before solving One Card Poker and answering all our questions. Consider the situation in which the opener is dealt the deuce. He checks and the dealer bets. His hand can beat only a bluff. What is the optimal frequency with which he should call this bet? Should he call 2 of the time, as suggested by the excerpt from The Theory of Poker? Or should he call of the time, as he would if faced with the same situation as the dealer? As we will see, there is no unambiguous answer to this question. For example, it may be optimal for the opener to call here 2 of the time, but only if he never checks with the trey and bluffs with the ace of the time. On the other hand, it may be optimal for the opener to call in this situation, say, 9 times out of 0, but only if he checks with the trey 0% of the 2

3 time and bluffs with the ace 0% of the time. So we see here a somewhat counter-intuitive example where the optimal play for the opener depends not only on the current situation, but also on how he would have responded if the situation were different. After all, if this one hand is the only hand these two players will ever play with each other, then why should it matter that the opener intended to check with the trey 0% of the time? He was never and will never be dealt a trey! 2 Obvious Plays and Stupid Mistakes We now want to analyze One Card Poker using game theory. What this means is that we will consider a group of strategies for the opener and a group of strategies for the dealer. From these groups, we will try to find strategies which are optimal in a certain sense. But it would definitely be a waste of time if any part of that analysis were devoted to concluding that one should never fold a trey, or that one should never call a bet with an ace. For this reason, let us devote this section to enumerating the Stupid Mistakes in One Card Poker. We will thereafter assume that the players do not make these Stupid Mistakes. This will allow us to reduce the sizes of the groups of strategies we must consider. Stupid Mistake No. : Folding the trey. We will assume that neither player will ever fold the trey. Stupid Mistake No. 2: Calling with the ace. We will assume that neither player will ever call a bet while holding the ace. Stupid Mistake No. : Checking with the trey in position. We will assume that if the dealer holds the trey and the opener checks, then the dealer will automatically bet. Stupid Mistake No. 4: Betting with the deuce. If a player bets with the deuce, then according to the other Stupid Mistakes, his opponent will fold the ace and call with the trey. If the dealer holds the deuce and is checked to, then checking and betting have the same effect when the opener holds the ace, but betting loses an additional \$00 when the opener holds the trey. Similarly, when the opener holds the deuce, checking with the intention of calling a bet has the same effect as betting when the dealer holds the trey, but wins additional money when the dealer holds the ace and decides to bluff. So there is always a better option than betting the deuce. Betting the deuce is a no-win situation for the bettor, and we will assume that neither player will bet the deuce. Strategic Plays and Expected Value Given that the players will flawlessly avoid the Stupid Mistakes, they now have a limited number of choices. The dealer must decide how frequently he will bluff with the ace when the opener checks, and he must decide how frequently to call with the deuce when the opener bets. Let us denote these probabilities by q and q 2, respectively. As for the opener, he has three decisions. He must decide how frequently to bet out as a bluff when he holds the ace. Call this p. He must decide how frequently to call with the deuce when the dealer bets. Call this p 2. And finally, he must decide how frequently to bet out with the trey. Call this p. Note that it is not an obvious play to choose p =. If, for

4 example, the opener held the trey, and he somehow knew that the dealer held the ace, then the only correct play would be to check. To summarize, p is the probability the opener bluffs with the ace, p 2 is the probability the opener calls with the deuce, p is the probability the opener bets with the trey, q is the probability the dealer bluffs with the ace, and q 2 is the probability the dealer calls with the deuce. We now want to use these values to compute the opener s post-ante expected value (EV). What this means is that we will regard the \$200 pot, which was created by the antes, as belonging to neither player. So, for example, if the opener checks, the dealer bets, and the opener folds, then we regard this as a \$200 win for the dealer and a \$0 win (or loss) for the opener. After computing the opener s post-ante EV, it will be a simple matter to convert this into a pre-ante EV; that is, the opener s EV for the entire hand, including his original \$00 ante. There are three possible non-zero post-ante results for the opener. Either he loses \$00, wins \$200, or wins \$00. We will begin by computing the probabilities of each of these outcomes. Case : the opener has the ace, the dealer has the deuce. In this case, the opener loses \$00 if he bluffs and is called. This happens with probability p q 2. He wins \$200 if he bluffs and the dealer folds. This has probability p ( q 2 ). He cannot win \$00. Case 2: the opener has the ace, the dealer has the trey. Here, the opener can only lose \$00, which happens whenever he tries to bluff. The probability of this is p. Case : the opener has the deuce, the dealer has the ace. In this case, the opener checks. With probability q, the hand is checked through and the opener wins \$200. With probability q p 2, the dealer bluffs and gets called, and the opener wins \$00. The opener cannot lose \$00. Case 4: the opener has the deuce, the dealer has the trey. The opener cannot win anything. He loses \$00 when he calls the dealer s bet with probability p 2. Case 5: the opener has the trey, the dealer has the ace. Here, the opener wins \$00 when he checks and the dealer bluffs. This has probability ( p )q. Otherwise, with probability ( p )q, the opener wins \$200. Case 6: the opener has the trey, the dealer has the deuce. Here, the opener wins \$00 when he bets and the dealer calls. This has probability p q 2. Otherwise, with probability p q 2, the opener wins \$200. Since each of these cases has probability, we can combine them to see that the opener 6 loses \$00 (cases, 2, and 4) with probability he wins \$200 (cases,, 5, and 6) with probability Q = 6 (p q 2 + p + p 2 ), () Q 2 = 6 (p ( q 2 ) + q + ( p )q + p q 2 ) = 6 (p p q 2 + 2q + p q p q 2 ), (2) 4

5 and wins \$00 (cases, 5, and 6) with probability This gives him a post-ante EV of Q = 6 (q p 2 + ( p )q + p q 2 ) = 6 (p 2q + q p q + p q 2 ). () Q + 2Q 2 + Q, where one unit of EV represents a \$00 average win per hand. If we want to include his ante, then, in each of these cases, we must reduce his final outcome by \$00. Also, we must acknowledge that, with probability (Q + Q 2 + Q ), he loses his original ante of \$00. This gives him a total EV for the entire hand of 2Q + Q 2 + 2Q ( Q Q 2 Q ), which simplifies to Q + 2Q 2 + Q. (4) 4 Game Theory Analysis In a way, the idea behind game theory is very basic. In this case, we simply want to understand how the players choices of the p and q values affect their EVs. To accomplish this, we will need to simplify and rewrite the expressions derived in the previous section. Plugging (), (2), and () into (4), we find that the opener s total EV for the entire hand is 6 ( p q 2 p p 2 )+ 6 (2p 2p q q +2p q 2p q 2 )+ 6 (p 2q +q p q +p q 2 ), which simplifies to 6 ( p q 2 + p p 2 q p q + p q 2 + p 2 q ). In order to make use of this, it will be convenient to rewrite this as 6 [p ( q 2 ) + p 2 (q ) + p (q 2 q ) q ] (5) and also as 6 [q (p 2 p ) + q 2 (p p ) + (p p 2 )]. (6) From (5), we see that something special happens when q = q 2 =. In this case, the opener s EV is simply, and this does not depend on the opener s choices of the numbers 8 p, p 2, and p. If the dealer chooses these q-values, then the dealer is indifferent as to how the opener plays the game. The dealer s EV will be, regardless of how the opener plays. 8 For this reason, we will refer to q = q 2 = as the dealer s indifferent strategy. 5

6 If the dealer deviates from the indifferent strategy, then he is making a mistake in the sense that the opener (if he can spot the deviation) can increase his EV above (and 8 possibly even give himself a positive EV) by choosing the appropriate counter-strategy. Let us consider some examples. Suppose that the dealer does not bluff enough with the ace, does not call enough with the deuce, and bluffs with the ace more often than he calls with the deuce. In other words, the dealer has chosen a strategy in which q 2 < q <. In order for the opener to maximize his EV in this case, he should never call with the deuce (since the dealer does not bluff enough), always bluff with the ace (since the dealer does not call enough), and never bet out with the trey (since the dealer will bluff more often than he will call). In other words, the opener should choose the strategy p =, p 2 = 0, and p = 0. From (6), we see that the opener s EV will be 6 [ q q 2 + ]. Since q 2 < q <, this EV will always be greater than, and may very well be positive. 8 For example, if q 2 = and q 6 =, then the opener s EV will be As another example, suppose that the opener is the kind of passive player that will never bet out with the trey. The dealer sees this and reasons, as in the introduction, that he should only bluff of the time. If he does this, then the opener can counter by simply 6 doing nothing! The opener can simply never bet out and never call, unless he has the trey. In other words, the opener chooses the strategy p = p 2 = p = 0. Referring to (5), we see that by doing this, the opener has an EV of, which is better for the opener than. 6 8 In fact, if the players alternate positions and the passive player uses the indifferent strategy when he is the dealer, then his EV over every pair of hands will be + = and he will be a long term winner. The point here is that the dealer wants to bluff in a way that puts the opener on the edge and makes it difficult for him to decide whether or not he should call. This is why the bluffing frequency should match the pot odds. But no amount of bluffing is going to make it difficult for him to call with a trey. So the bluffing frequency must be targeted at making his decision with the deuce a difficult one. This is accomplished precisely by making q =. For one final example, suppose that the dealer has read The Theory of Poker and has decided that he should bluff with the ace of the time. That is, he chooses q =. He also knows that, with the deuce, his hand can beat only a bluff. So when the opener bets \$00 into a \$200 pot, the dealer should make the odds 2-to- against his folding. That is, he should call twice and fold once. So he decides upon q 2 = 2. By (5), we see that the opener s EV is now [ p + 6 p ]. The opener can maximize his EV by choosing p = 0 (never bluffing), p = (always betting with the trey), and doing whatever he likes with the deuce. By doing this, the opener s EV is zero. In other words, by calling 2 of the time with the deuce, the dealer has forfeited his 8 EV advantage, which is his natural advantage due to acting last. If the players take turns 6

7 being the dealer, he could end up a long term loser by forfeiting this advantage every other hand. The only way for the dealer to prevent the opener from being able to seize back some of this advantage is to play the indifferent strategy, q = q 2 =. It is for this reason that the indifferent strategy is more commonly referred to as the optimal strategy. As we have seen, in this game it is optimal to call with the deuce of the time, not 2 of the time. So is there a flaw in the examples from The Theory of Poker? In fact, there is not. When your opponent bets \$00 into a \$200 pot, you should play in a way that makes the probability you will call 2. But it is not the probability that you will call from your perspective which should be 2, but the probability from your opponent s perspective. When the opener bets with the ace, he does not know whether the dealer has the deuce or the trey. Half the time, the dealer will have the trey and will automatically call. The other half of the time, the dealer will have the deuce. Of those times, the dealer will call with frequency. So the probability that the dealer will call, from the opener s perspective, is = 2. This phenomenon might be better illustrated if we were using a 4-card deck: one ace, one deuce, one trey, and one four. In that case, what would be the optimal frequency with which you should call a bet with the deuce? Well, that would be related to how frequently you would call a bet with the trey. In order to play optimally, you would have to play the deuce and the trey (and the four as well) in a way which makes the overall probability that you will call a bluff 2. But this does not mean you would call specifically with the deuce 2 of the time. In fact, you would probably call much less frequently than that. 5 Multiple Optimal Strategies We just saw that the dealer has a unique optimal strategy, q = q 2 =. The situation for the opener, however, is different. From (6), we see that any set of p-values which satisfies p 2 p = 0 p p = 0 will be an indifferent strategy for the opener and will give him an EV of 6 (p p 2 ), regardless of how the dealer plays. In other words, the opener can choose p arbitrarily, and then choose p = p p 2 = p +. By doing this, he will assure himself an EV of ( ( 6 p p + )) = 8, no matter what strategy the dealer selects. In other words, all such strategies are optimal strategies. For example, choosing p = gives p = and p 2 = 2. So always betting out with the trey, bluffing with the ace of the time, and calling with the deuce 2 of the time is 7

8 an optimal strategy for the opener. On the other hand, choosing p = 0 yields p = 0 and p 2 =. So it is also optimal for the opener to never bet with the trey, never bluff with the ace, and call with the deuce of the time. For each different value of p between 0 and, there is a different optimal strategy that the opener may employ. As is the nature of optimal strategies, each of these guarantees the opener an EV of, regardless of the strategy the 8 dealer chooses. However, if the opener chooses a strategy outside of this group, then the dealer can capitalize on this mistake. For example, suppose the opener does not call enough with the deuce; that is, p 2 < p +. By (6), we see that the dealer can capitalize on this by choosing q = (always bluffing with the ace). By (5), if the dealer chooses q 2 = (calling of the time with the deuce), then he nullifies the effect of p on his EV, allowing him to isolate the opener s mistake. With these choices, using (5), the opener s EV is [ 2p 2 2 ] 6 p < [ ( 2 6 p + ) 2 ] p = 8. 6 Paradoxes Let us return now to the examples in the introduction. Consider the situation where the opener is dealt the deuce and checks. The dealer bets. What is the opener s optimal play? Suppose he has a perfect random number generator and can call with any probability he likes. Which probability is optimal? As we have seen, any probability p 2 of the form p + is optimal, provided he bets out with the trey with probability p and bluffs with the ace with probability p. In other words, it will be optimal for the opener to call here with any probability between and 2, provided he plays the ace and trey in a manner which is consistent with that choice. To some degree, this flies in the face of conventional wisdom. We know the opener s card: the deuce. We know the betting sequence so far: check, bet. We can even know everything there is to know about his opponent s tendencies. That is, we can know the precise values of q and q 2. And still we do not have enough information to answer the question, What is the opener s optimal play? His optimal play depends not only on his cards, the betting, and his opponent. It also depends on how he intends or intended to play in other situations. This seems very counter-intuitive. A play has either a positive expectation, a negative expectation, or zero expectation. Other hands, at least in our mathematical model, are independent of this one. How can the opener s actions in other hands affect the value of his chosen action in this hand? How could these other actions play any role in determining the best play here? But therein lies the catch. At no time until now did we ever ask, What is the best play? We only asked, What is the optimal play? So let us now address the best play. If we know everything about our opponent, then we know the value of q. Looking at (5), if q >, then the opener maximizes his EV by taking p 2 =. In other words, the best play is to call. If q <, then the opener maximizes his EV by taking p 2 = 0. In other words, the best play is to fold. If q =, then (5) shows us that it does not matter what p 2 is. The opener gets the same EV no matter what frequency he calls with. So all plays are best plays. 8

11 to optimally call a bluff can only be regarded as a defense. But since it defends both you and your opponent, a better defense is to simply not play at all. That being said, it should be pointed out that there are times when the optimal strategy will be profitable; namely, when your opponent makes Stupid Mistakes. In that case, you can play optimally and be a long term winner. By playing optimally, you ensure that changes in his bluffing and calling frequencies will not affect his EV. Since his EV will be intrinsically negative due to his Stupid Mistakes, you will have a positive expectation. (On the other hand, if he is making Stupid Mistakes, then you can probably outwit him without game theory.) When your opponent does not make Stupid Mistakes, playing optimally is an exercise in futility. But nonetheless, there is still value in understanding the theoretical aspects of optimal play. In order to profit, you must know, for example, when your opponent is bluffing too much. But what does it mean to bluff too much in a situation. It means, of course, bluffing more than is optimal. So you must know what the optimal strategy is (even though you will consciously avoid it) in order to decide on the proper counter-strategy against your opponent. References [] David Sklanksy, The Theory of Poker. Two Plus Two Publishing, 989

### Poker with a Three Card Deck 1

Poker with a Three Card Deck We start with a three card deck containing one Ace, one King and one Queen. Alice and Bob are each dealt one card at random. There is a pot of \$ P (and we assume P 0). Alice

### THREE CARD BRAG (FLASH)

THREE CARD BRAG (FLASH) Introduction Three Card Brag is a gambling game played with a standard 52 card pack without jokers. The cards in each suit rank in the usual order from high to low: A-K-Q-J-10-9-8-7-6-5-4-3-2.

### During the last several years, poker has grown in popularity. Best Hand Wins: How Poker Is Governed by Chance. Method

Best Hand Wins: How Poker Is Governed by Chance Vincent Berthet During the last several years, poker has grown in popularity so much that some might even say it s become a social phenomenon. Whereas poker

### Laboratory work in AI: First steps in Poker Playing Agents and Opponent Modeling

Laboratory work in AI: First steps in Poker Playing Agents and Opponent Modeling Avram Golbert 01574669 agolbert@gmail.com Abstract: While Artificial Intelligence research has shown great success in deterministic

### Dartmouth College. Sandbagging in One-Card Poker

Dartmouth College Hanover, New Hampshire Sandbagging in One-Card Poker A Thesis in Mathematics By: Daniel Hugh Miao Advisor: Peter Doyle 04 Abstract In 950, Kuhn developed a simplified version of poker

### Bonus Maths 2: Variable Bet Sizing in the Simplest Possible Game of Poker (JB)

Bonus Maths 2: Variable Bet Sizing in the Simplest Possible Game of Poker (JB) I recently decided to read Part Three of The Mathematics of Poker (TMOP) more carefully than I did the first time around.

### Texas Hold em. From highest to lowest, the possible five card hands in poker are ranked as follows:

Texas Hold em Poker is one of the most popular card games, especially among betting games. While poker is played in a multitude of variations, Texas Hold em is the version played most often at casinos

### Mathematical Analysis Of Packs Poker. September 22, 2014. Prepared For John Feola New Vision Gaming 5 Samuel Phelps Way North Reading, MA 01864

Mathematical Analysis Of Packs Poker September 22, 2014 Prepared For John Feola New Vision Gaming 5 Samuel Phelps Way North Reading, MA 01864 Office: 978 664-1515 Fax: 978-664 - 5117 www.newvisiongaming.com

### MIT 15.S50 LECTURE 2. Wednesday, January 16 th, 2013

MIT 15.S50 LECTURE 2 Wednesday, January 16 th, 2013 OUTLINE: POSTFLOP PLAY 1 st Half: Continuation Betting, Fundamental Theorem of Poker, Flop Analysis 2 nd Half: Implied Odds, Set Mining, Bluffing (with

### Probability and Expected Value

Probability and Expected Value This handout provides an introduction to probability and expected value. Some of you may already be familiar with some of these topics. Probability and expected value are

### Expected Value. 24 February 2014. Expected Value 24 February 2014 1/19

Expected Value 24 February 2014 Expected Value 24 February 2014 1/19 This week we discuss the notion of expected value and how it applies to probability situations, including the various New Mexico Lottery

### Probabilities of Poker Hands with Variations

Probabilities of Poker Hands with Variations Jeff Duda Acknowledgements: Brian Alspach and Yiu Poon for providing a means to check my numbers Poker is one of the many games involving the use of a 52-card

### Artificial Intelligence Beating Human Opponents in Poker

Artificial Intelligence Beating Human Opponents in Poker Stephen Bozak University of Rochester Independent Research Project May 8, 26 Abstract In the popular Poker game, Texas Hold Em, there are never

### UNDERGROUND TONK LEAGUE

UNDERGROUND TONK LEAGUE WWW.TONKOUT.COM RULES Players are dealt (5) five cards to start. Player to left of dealer has first play. Player must draw a card from the deck or Go For Low. If a player draws

### BAD BEAT. Bad Beat will reset at \$10,000 with a qualifier of four deuces beaten. Every Monday at 6:00 AM the Bad Beat will increase by \$10,000.

BAD BEAT Bad Beat will reset at \$10,000 with a qualifier of four deuces beaten. Every Monday at 6:00 AM the Bad Beat will increase by \$10,000. OFFICIAL RULES Horseshoe may change or cancel this promotion

Two-State Options John Norstad j-norstad@northwestern.edu http://www.norstad.org January 12, 1999 Updated: November 3, 2011 Abstract How options are priced when the underlying asset has only two possible

### Nash Equilibria and. Related Observations in One-Stage Poker

Nash Equilibria and Related Observations in One-Stage Poker Zach Puller MMSS Thesis Advisor: Todd Sarver Northwestern University June 4, 2013 Contents 1 Abstract 2 2 Acknowledgements 3 3 Literature Review

### LESSON 7. Managing the Trump Suit. General Concepts. General Introduction. Group Activities. Sample Deals

LESSON 7 Managing the Trump Suit General Concepts General Introduction Group Activities Sample Deals 170 Lesson 7 Managing the Trump Suit GENERAL CONCEPTS Play of the Hand Drawing trumps Playing the trump

### Chapter 7. Sealed-bid Auctions

Chapter 7 Sealed-bid Auctions An auction is a procedure used for selling and buying items by offering them up for bid. Auctions are often used to sell objects that have a variable price (for example oil)

### Training Manual. Shuffle Master Gaming Three Card Poker Training Manual R20020325

Training Manual 2001 Shuffle Master, Inc. First Printing All Rights Reserved Printed in the United States of America No part of this publication may be reproduced or distributed in any form or by any means,

### Double Deck Blackjack

Double Deck Blackjack Double Deck Blackjack is far more volatile than Multi Deck for the following reasons; The Running & True Card Counts can swing drastically from one Round to the next So few cards

### Russell Thomas

From Actuarial Science to Poker Russell Thomas 11.14.2013 1 Agenda Playing poker vs. Being an Actuary Rules of No Limit Texas Hold em Poker skills Conclusions 2 How does Poker relate to being an Actuary?

### \$2 4 40 + ( \$1) = 40

THE EXPECTED VALUE FOR THE SUM OF THE DRAWS In the game of Keno there are 80 balls, numbered 1 through 80. On each play, the casino chooses 20 balls at random without replacement. Suppose you bet on the

### How to Play. Player vs. Dealer

How to Play You receive five cards to make your best four-card poker hand. A four-card Straight is a Straight, a four-card Flush is a Flush, etc. Player vs. Dealer Make equal bets on the Ante and Super

### In the situations that we will encounter, we may generally calculate the probability of an event

What does it mean for something to be random? An event is called random if the process which produces the outcome is sufficiently complicated that we are unable to predict the precise result and are instead

### Perfect Bayesian Equilibrium

Perfect Bayesian Equilibrium When players move sequentially and have private information, some of the Bayesian Nash equilibria may involve strategies that are not sequentially rational. The problem is

### Unit 19: Probability Models

Unit 19: Probability Models Summary of Video Probability is the language of uncertainty. Using statistics, we can better predict the outcomes of random phenomena over the long term from the very complex,

### SYMMETRIC FORM OF THE VON NEUMANN POKER MODEL. Guido David 1, Pearl Anne Po 2

International Journal of Pure and Applied Mathematics Volume 99 No. 2 2015, 145-151 ISSN: 1311-8080 (printed version); ISSN: 1314-3395 (on-line version) url: http://www.ijpam.eu doi: http://dx.doi.org/10.12732/ijpam.v99i2.2

### The cloth covering a Three Card Poker 6 Card Bonus table (the layout) shall have wagering areas for eight players.

*Three Card Poker 6 Card Bonus is owned, patented and/or copyrighted by SHFL Entertainment, Inc. Please submit your agreement with Owner authorizing play of Game in your gambling establishment together

### GAMING MANAGEMENT SEMINAR SERIES. Prices of Casino Games. Jason Zhicheng Gao 高 志 成

GAMING MANAGEMENT SEMINAR SERIES Prices of Casino Games Jason Zhicheng Gao 高 志 成 Casinos-Games-Players Casinos make money by offering games to the players. Games are casinos major products, and players

### GAMES WITH ONE DIE Games where you only use a single die can be plenty exciting indeed. Here are two good examples of this!

[TACTIC rules for dice games] Here are 21 different dice games, with one, two, three or even more dice. We wish you lots of enjoyment! GAMES WITH ONE DIE Games where you only use a single die can be plenty

### TABLE OF CONTENTS. ROULETTE FREE System #1 ------------------------- 2 ROULETTE FREE System #2 ------------------------- 4 ------------------------- 5

IMPORTANT: This document contains 100% FREE gambling systems designed specifically for ROULETTE, and any casino game that involves even money bets such as BLACKJACK, CRAPS & POKER. Please note although

### LESSON 1. Opening Leads Against Notrump Contracts. General Concepts. General Introduction. Group Activities. Sample Deals

LESSON 1 Opening Leads Against Notrump Contracts General Concepts General Introduction Group Activities Sample Deals 8 Defense in the 21st Century GENERAL CONCEPTS Defense The opening lead against notrump

### Champion Poker Texas Hold em

Champion Poker Texas Hold em Procedures & Training For the State of Washington 4054 Dean Martin Drive, Las Vegas, Nevada 89103 1 Procedures & Training Guidelines for Champion Poker PLAYING THE GAME Champion

### RULES FOR TEXAS HOLD EM POKER

RULES FOR TEXAS HOLD EM POKER DEFINITIONS In these rules Action means a player acting in turn All-in means a player has invested all of his/her remaining chips in the outcome of a hand. His/her wager cannot

### Training Manual. SHFL entertainment Three Card Poker Training Manual 2013.04.10

Training Manual SHFL entertainment Three Card Poker Training Manual 2013.04.10 2001 SHFL entertainment First Printing All Rights Reserved Printed in the United States of America No part of this publication

### A New Interpretation of Information Rate

A New Interpretation of Information Rate reproduced with permission of AT&T By J. L. Kelly, jr. (Manuscript received March 2, 956) If the input symbols to a communication channel represent the outcomes

### Why is Insurance Good? An Example Jon Bakija, Williams College (Revised October 2013)

Why is Insurance Good? An Example Jon Bakija, Williams College (Revised October 2013) Introduction The United States government is, to a rough approximation, an insurance company with an army. 1 That is

### Mus is the most popular Spanish game, due to its attractiveness and characteristics. This game was born in Basque Country

Mus is the most popular Spanish game, due to its attractiveness and characteristics. This game was born in Basque Country Object of the game The winner of the game is the team who wins three sets. The

### The power of money management

The power of money management One trader lost (\$3000) during the course of a year trading one contract of system A. Another trader makes \$25,000 trading the same system that year. One trader makes \$24,000

### Casino Control (3 Card Poker) Approval 2006 (No 1)

Australian Capital Territory Casino Control (3 Card Poker) Approval 2006 (No 1) Notifiable Instrument NI2006 481 made under the Casino Control Act 2006, section 96 (Rules for Authorised Games). 1 Name

### We employed reinforcement learning, with a goal of maximizing the expected value. Our bot learns to play better by repeated training against itself.

Date: 12/14/07 Project Members: Elizabeth Lingg Alec Go Bharadwaj Srinivasan Title: Machine Learning Applied to Texas Hold 'Em Poker Introduction Part I For the first part of our project, we created a

### Creating a NL Texas Hold em Bot

Creating a NL Texas Hold em Bot Introduction Poker is an easy game to learn by very tough to master. One of the things that is hard to do is controlling emotions. Due to frustration, many have made the

### Optimal Drawing Strategy for Deuces Wild Video Poker Stephen Jensen

Optimal Drawing Strategy for Deuces Wild Video Poker Stephen Jensen Abstract Video poker, an extremely popular computerized version of the traditional game of poker, offers many opportunities for mathematical

### Video Poker in South Carolina: A Mathematical Study

Video Poker in South Carolina: A Mathematical Study by Joel V. Brawley and Todd D. Mateer Since its debut in South Carolina in 1986, video poker has become a game of great popularity as well as a game

### Pascal is here expressing a kind of skepticism about the ability of human reason to deliver an answer to this question.

Pascal s wager So far we have discussed a number of arguments for or against the existence of God. In the reading for today, Pascal asks not Does God exist? but Should we believe in God? What is distinctive

### Expected Value and the Game of Craps

Expected Value and the Game of Craps Blake Thornton Craps is a gambling game found in most casinos based on rolling two six sided dice. Most players who walk into a casino and try to play craps for the

### Minimax Strategies. Minimax Strategies. Zero Sum Games. Why Zero Sum Games? An Example. An Example

Everyone who has studied a game like poker knows the importance of mixing strategies With a bad hand, you often fold But you must bluff sometimes Lectures in Microeconomics-Charles W Upton Zero Sum Games

### Introduction to Discrete Probability. Terminology. Probability definition. 22c:19, section 6.x Hantao Zhang

Introduction to Discrete Probability 22c:19, section 6.x Hantao Zhang 1 Terminology Experiment A repeatable procedure that yields one of a given set of outcomes Rolling a die, for example Sample space

### (SEE IF YOU KNOW THE TRUTH ABOUT GAMBLING)

(SEE IF YOU KNOW THE TRUTH ABOUT GAMBLING) Casinos loosen the slot machines at the entrance to attract players. FACT: This is an urban myth. All modern slot machines are state-of-the-art and controlled

### In this variation of Poker, a player s cards are hidden until showdown. Prior to receiving cards, you must place an initial wager known as an ante.

1 POKER Poker is one of the most skilful and fascinating games ever devised, offering players a chance to test their skills against other players rather than the house (casino). Poker is as much a game

### Automatic Bet Tracker!

Russell Hunter Street Smart Roulette Automatic Bet Tracker! Russell Hunter Publishing, Inc. Street Smart Roulette Automatic Bet Tracker 2015 Russell Hunter and Russell Hunter Publishing, Inc. All Rights

### THE ROULETTE BIAS SYSTEM

1 THE ROULETTE BIAS SYSTEM Please note that all information is provided as is and no guarantees are given whatsoever as to the amount of profit you will make if you use this system. Neither the seller

### 1 Uncertainty and Preferences

In this chapter, we present the theory of consumer preferences on risky outcomes. The theory is then applied to study the demand for insurance. Consider the following story. John wants to mail a package

### Sleeping Beauty, as described on wikipedia, citing Arnold

Sleeping Beauty Sleeping Beauty, as described on wikipedia, citing Arnold Zuboff Sleeping Beauty volunteers to undergo the following experiment. On Sunday she is given a drug that sends her to sleep. A

### Introduction to the Rebate on Loss Analyzer Contact: JimKilby@usa.net 702-436-7954

Introduction to the Rebate on Loss Analyzer Contact: JimKilby@usa.net 702-436-7954 One of the hottest marketing tools used to attract the premium table game customer is the "Rebate on Loss." The rebate

### cachecreek.com 14455 Highway 16 Brooks, CA 95606 888-77-CACHE

Baccarat was made famous in the United States when a tuxedoed Agent 007 played at the same tables with his arch rivals in many James Bond films. You don t have to wear a tux or worry about spies when playing

### LOOKING FOR A GOOD TIME TO BET

LOOKING FOR A GOOD TIME TO BET LAURENT SERLET Abstract. Suppose that the cards of a well shuffled deck of cards are turned up one after another. At any time-but once only- you may bet that the next card

### Standard 12: The student will explain and evaluate the financial impact and consequences of gambling.

STUDENT MODULE 12.1 GAMBLING PAGE 1 Standard 12: The student will explain and evaluate the financial impact and consequences of gambling. Risky Business Simone, Paula, and Randy meet in the library every

### SPANISH 21. 3. Player blackjack always beats a dealer blackjack and is paid 3 to 2.

SPANISH 21 Spanish 21 is standard blackjack with optional bonus wagers. All rules pertaining to blackjack as posted on the WSGC website will remain the same and are not altered in this game except as noted

### THE 101 CASINO BLACKJACK X with BUSTER BLACKJACK BONUS BET v1.2

THE 101 CASINO BLACKJACK X with BUSTER BLACKJACK BONUS BET v1.2 The 101 Casino 1 Type of Game The game of Blackjack X with Buster Blackjack Bonus Bet v1.2 utilizes a player-dealer position and is a California

### PLACE BETS (E) win each time a number is thrown and lose if the dice ODDS AND LAYS HARDWAYS (F) BUY & LAY BETS (G&H)

craps PASS LINE BET (A) must be rolled again before a 7 to win. If the Point is and the shooter continues to throw the dice until a Point is established and a 7 is rolled before the Point. DON T PASS LINE

### Financial Markets. Itay Goldstein. Wharton School, University of Pennsylvania

Financial Markets Itay Goldstein Wharton School, University of Pennsylvania 1 Trading and Price Formation This line of the literature analyzes the formation of prices in financial markets in a setting

### ECON 459 Game Theory. Lecture Notes Auctions. Luca Anderlini Spring 2015

ECON 459 Game Theory Lecture Notes Auctions Luca Anderlini Spring 2015 These notes have been used before. If you can still spot any errors or have any suggestions for improvement, please let me know. 1

### The game also features three optional bonus bets.

Type of Game The game of Commission Free Fortune Gow Poker utilizes a player-dealer position and is a California game. The player-dealer shall collect all losing wagers, pay all winning wagers, and may

BREAK-EVEN ANALYSIS In your business planning, have you asked questions like these? How much do I have to sell to reach my profit goal? How will a change in my fixed costs affect net income? How much do

### On the Paradox of the Question

On the Paradox of the Question Theodore Sider Analysis 57 (1997): 97 101 Ned Markosian (1997) tells a story in which philosophers have an opportunity to ask an angel a single question. In order to circumvent

### Poker. 10,Jack,Queen,King,Ace. 10, Jack, Queen, King, Ace of the same suit Five consecutive ranks of the same suit that is not a 5,6,7,8,9

Poker Poker is an ideal setting to study probabilities. Computing the probabilities of different will require a variety of approaches. We will not concern ourselves with betting strategies, however. Our

### LESSON 7. Leads and Signals. General Concepts. General Introduction. Group Activities. Sample Deals

LESSON 7 Leads and Signals General Concepts General Introduction Group Activities Sample Deals 330 More Commonly Used Conventions in the 21st Century General Concepts This lesson covers the defenders conventional

### Random Fibonacci-type Sequences in Online Gambling

Random Fibonacci-type Sequences in Online Gambling Adam Biello, CJ Cacciatore, Logan Thomas Department of Mathematics CSUMS Advisor: Alfa Heryudono Department of Mathematics University of Massachusetts

### Ultimate Texas Hold'em features head-to-head play against the player/dealer and an optional bonus bet.

*Uultimate Texas Hold'em is owned, patented and/or copyrighted by ShuffleMaster Inc. Please submit your agreement with Owner authorizing play of Game in your gambling establishment together with any request

### FINAL EXAM, Econ 171, March, 2015, with answers

FINAL EXAM, Econ 171, March, 2015, with answers There are 9 questions. Answer any 8 of them. Good luck! Problem 1. (True or False) If a player has a dominant strategy in a simultaneous-move game, then

### Example Hand Say you are dealt the following cards: Suits Suits are ranked in the following order.

Chinese Poker or 13 Card Poker This game is played with 4 players. Each player is dealt 13 cards. The object is to arrange them into 3 groups: one consisting of 3 cards (front hand), and two consisting

### YesFreeCash.com Free Bonus Hunting Tutorial For Beginners

YesFreeCash.com Free Bonus Hunting Tutorial For Beginners Written by the team of www.yesfreecash.com 2007 yesfreecash.com This is a guideline written by yesfreecash.com to help people who don t know much

### Know it all. Table Gaming Guide

Know it all. Table Gaming Guide Winners wanted. Have fun winning at all of your favorite games: Blackjack, Craps, Mini Baccarat, Roulette and the newest slots. Add in seven mouthwatering dining options

### SOME ASPECTS OF GAMBLING WITH THE KELLY CRITERION. School of Mathematical Sciences. Monash University, Clayton, Victoria, Australia 3168

SOME ASPECTS OF GAMBLING WITH THE KELLY CRITERION Ravi PHATARFOD School of Mathematical Sciences Monash University, Clayton, Victoria, Australia 3168 In this paper we consider the problem of gambling with

### Elementary Statistics and Inference. Elementary Statistics and Inference. 16 The Law of Averages (cont.) 22S:025 or 7P:025.

Elementary Statistics and Inference 22S:025 or 7P:025 Lecture 20 1 Elementary Statistics and Inference 22S:025 or 7P:025 Chapter 16 (cont.) 2 D. Making a Box Model Key Questions regarding box What numbers

### Slots... 1. seven card stud...22

GAMING GUIDE table of contents Slots... 1 Blackjack...3 Lucky Ladies...5 Craps...7 Roulette... 13 Three Card Poker... 15 Four Card Poker... 17 Texas Hold em Bonus Poker... 18 omaha Poker... 21 seven card

### MA 1125 Lecture 14 - Expected Values. Friday, February 28, 2014. Objectives: Introduce expected values.

MA 5 Lecture 4 - Expected Values Friday, February 2, 24. Objectives: Introduce expected values.. Means, Variances, and Standard Deviations of Probability Distributions Two classes ago, we computed the

### The Math. P (x) = 5! = 1 2 3 4 5 = 120.

The Math Suppose there are n experiments, and the probability that someone gets the right answer on any given experiment is p. So in the first example above, n = 5 and p = 0.2. Let X be the number of correct

### FACT A computer CANNOT pick numbers completely at random!

1 THE ROULETTE BIAS SYSTEM Please note that all information is provided as is and no guarantees are given whatsoever as to the amount of profit you will make if you use this system. Neither the seller

### RULES AND DEALING PROCEDURES

RULES AND DEALING PROCEDURES The object of DJ Wild Stud Poker is to have a higher five-card poker hand than the dealer. The game is played with a 53-card deck with the joker and all deuces serving as fully-wild

### How to Win at Tic-Tac-Toe

XOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOX How to Win at Tic-Tac-Toe By Ryan Aycock Copyright 2002 XOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOXOX To Susan and Kellie, who rightfully believed

### WHAT ARE THE ODDS? The Wizard of Odds Analyzes the New Casino Games

The Wizard of Odds Analyzes the New Casino Games BY MICHAEL SHACKLEFORD The insurance business has always been a gamble but actuaries haven t exactly been considered high rollers at the gaming table. Until

### Game Theory for Humans. Matt Hawrilenko MIT: Poker Theory and Analytics

Game Theory for Humans Matt Hawrilenko MIT: Poker Theory and Analytics 1 Play Good Poker Read-Based Approach Game Theoretic Approach Why Game Theory? Computer Scientists Humans Audience Theory Practice

### How to Play Blackjack Alex Powell, Jayden Dodson, Triston Williams, Michael DuVall University of North Texas TECM 1700 10/27/2014

How to Play Blackjack Alex Powell, Jayden Dodson, Triston Williams, Michael DuVall University of North Texas TECM 1700 10/27/2014 Blackjack Blackjack is a fun game that can be played either for money at

### Fighting an Almost Perfect Crime

Fighting an Almost Perfect Crime Online Poker Fraud Detection Philipp Schosteritsch, MSc Consultant for Software Development and Technical Advisor on Cyber Security & Privacy Foundation Graz, 2014 Contents

### Bored MUMSians. Is it possible that he is left with the number 1?

Sam Chow One Player Games Bored MUMSians Han writes the numbers 1, 2,..., 100 on the whiteboard. He picks two of these numbers, erases them, and replaces them with their difference (so at some point in

### Making Decisions in Chess

Making Decisions in Chess How can I find the best move in a position? This is a question that every chess player would like to have answered. Playing the best move in all positions would make someone invincible.

### January 2012, Number 64 ALL-WAYS TM NEWSLETTER

January 2012, Number 64 ALL-WAYS TM NEWSLETTER Help from the Collective Public How Much to Wager How to Apportion Wager Dollars Inside This Newsletter Announcements Winter: A Good Time to Explore, Learn

### ! Insurance and Gambling

2009-8-18 0 Insurance and Gambling Eric Hehner Gambling works as follows. You pay some money to the house. Then a random event is observed; it may be the roll of some dice, the draw of some cards, or the

### V. RANDOM VARIABLES, PROBABILITY DISTRIBUTIONS, EXPECTED VALUE

V. RANDOM VARIABLES, PROBABILITY DISTRIBUTIONS, EXPETED VALUE A game of chance featured at an amusement park is played as follows: You pay \$ to play. A penny and a nickel are flipped. You win \$ if either

### AMS 5 CHANCE VARIABILITY

AMS 5 CHANCE VARIABILITY The Law of Averages When tossing a fair coin the chances of tails and heads are the same: 50% and 50%. So if the coin is tossed a large number of times, the number of heads and

### Chapter 2. My Early Days Trading Forex

Chapter 2 My Early Days Trading Forex I want to talk about my early days as a Forex trader because I m hoping that my story will be something you can relate to. So it doesn t really matter if you are brand

### REWARD System For Even Money Bet in Roulette By Izak Matatya

REWARD System For Even Money Bet in Roulette By Izak Matatya By even money betting we mean betting on Red or Black, High or Low, Even or Odd, because they pay 1 to 1. With the exception of the green zeros,

### An Unconvered Roulette Secret designed to expose any Casino and make YOU MONEY spin after spin! Even in the LONG Run...

An Unconvered Roulette Secret designed to expose any Casino and make YOU MONEY spin after spin! Even in the LONG Run... The UNFAIR Casino advantage put BACK into the HANDS of every Roulette player! INTRODUCTION...2

### Making \$200 a Day is Easy!

Making \$200 a Day is Easy! Firstly, I'd just like to say thank you for purchasing this information. I do not charge a huge amount for it so I hope that you will find it useful. Please note that if you