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The Role of Skill Versus Luck in Poker: Evidence from the World Series of Poker

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  • Steven D. Levitt
  • Thomas J. Miles

Abstract

In determining the legality of online poker - a multibillion dollar industry - courts have relied heavily on the issue of whether or not poker is a game of skill. Using newly available data, we analyze that question by examining the performance in the 2010 World Series of Poker of a group of poker players identified as being highly skilled prior to the start of the events. Those players identified a priori as being highly skilled achieved an average return on investment of over 30 percent, compared to a -15 percent for all other players. This large gap in returns is strong evidence in support of the idea that poker is a game of skill.

Suggested Citation

  • Steven D. Levitt & Thomas J. Miles, 2011. "The Role of Skill Versus Luck in Poker: Evidence from the World Series of Poker," NBER Working Papers 17023, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17023
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    References listed on IDEAS

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    1. Carhart, Mark M, 1997. " On Persistence in Mutual Fund Performance," Journal of Finance, American Finance Association, vol. 52(1), pages 57-82, March.
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    Cited by:

    1. Ben van der Genugten & Peter Borm, 2016. "Texas Hold’em: A Game of Skill," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 18(03), pages 1-13, September.
    2. Duersch, Peter & Lambrecht, Marco & Oechssler, Joerg, 2017. "Measuring Skill and Chance in Games," Working Papers 0643, University of Heidelberg, Department of Economics.
    3. Mikołaj Czajkowski, 2015. "Poker - a game of luck or skills. Review of theoretical and empirical studies and conclusions for law regulations," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 40.
    4. Eil, David & Lien, Jaimie W., 2014. "Staying ahead and getting even: Risk attitudes of experienced poker players," Games and Economic Behavior, Elsevier, vol. 87(C), pages 50-69.
    5. Jussi Palomäki & Michael Laakasuo & Mikko Salmela, 2013. "'This is just so unfair!': A qualitative analysis of loss-induced emotions and tilting in on-line poker," International Gambling Studies, Taylor & Francis Journals, vol. 13(2), pages 255-270, August.

    More about this item

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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