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Poker Bots Invade Online Gambling

One more comment... having been on both sides of the fence - hands down I have more respect for poker players. From both an intellectual and integrity persepective. Intellectually I find Wall Street to be highly overrated - put it this way, if the average IQ in America is 100, Wall Street is surely beating it... but maybe like 115. Is Wall Street articulate, composed, and well spoken? You betcha. Notice how these are all superfical characteristics... But Wall Street rarely learns from their mistakes... poker players have to. That's kind of the point, your bankroll is history if you don't.

From an integrity perspective the 3 online players in this thread speak well to it - guittarrzan, Scooot, and Spurious have overtly demonstrated a mutual respect amongst them, but for all intents and purposes are virtual strangers. There's an echelon in poker that once reached, fosters mutual respect. Obviously this is not all poker players (but most poker players are also losing players and lying through their teeth when they boast about how great they are) but amongst the top players great sportsmanship is very common.

Poker is all about having an edge; there's a very famous addage about how if you're the 10th best player in the world it's meaningless if you're sitting at a table with the top 9. I think it's due to this that poker creates a different kind of community, the best in the world aren't looking to make money off the other top players (debatable, also attests to ego and why people play), they're looking to take on weaker players. Top players typically encompass an unusual combination of humilty, tenacity to improve, and respect for each other. I personally find how most personalities on Wall Street operate to be fairly deplorable. Find me the 1 in a million on Wall Street described above and I can easily hand over the other 999,999.

One other point, until you've lived the pain of playing poker full time - it's very hard to adequetely justify the above points and why I have such a huge respect for professional poker players. The emotional pain of tilt is in my opinion, the worst I've ever had; it's incomparable to anything else I've experienced. Explaining this to people who have never done it is near impossible.

On a side note... never ask a poker player if they won today. Just don't :)

And way to keep the thread going Andy... I had pretty much checked out of it ;)
 
If we set up a working group, it will most likely be for NYC-based folks. Let start it small and keep expectation low first.

Here is a frank question and I expect frank comments.

It seems to me the folks who play poker professionally don't make much money when time invested is taken into account. We are not talking about players like Scotty Nguyen but thousands and thousands who make 5, 6 figure per year.
Compare that to many kids here with a bachelor degree, do MFE and make that much after school.

I have seen many applicants this year from people who have made 100-150K/year playing poker. I do not want to imagine the number of hours they spent online playing, studying stats and what not.

Is it a case of "grass is greener" when they look to a different line of career? How many of these people will crash and burn out after a few years with nothing (saving, degree, career) to show for it?


Well to start, the vast majority of players don't make money. Period. But then again, the vast majority of players are recreational players playing for entertainment.

The players who make a constant living from within the game itself (not sponsorship or outside sources like coaching) can do extremely well but there aren't many that do. It just may seem that way because it's a small group that knows each other from playing on the sites and posting in the forums.

From my personal experience, I'm extremely happy I found poker in some sense. But I also think about all the time that I've spent thinking about poker, reading about poker, studying poker and playing poker....if that time would have been better served elsewhere. And ultimately...I think it would have...but I probably wouldn't have done it.

At the time, when I was 18-21 years old, had I not been getting better at poker (and making way more money than I could with idle college jobs) I would have not been applying myself to other useful endeavors. Its a shame to think that but its my honest opinion. Through poker though, I gained this incredible thirst for knowledge and it has probably altered the way I look at the world in general and believe I'm a much better person for it.

Most successful players these days are young and incredibly smart. I think there is no doubt that the online breed of player is much more advanced than his live/casino counterpart. And most of these smart "kids" are probably forgoing a very great education at some top ranked schools (dropping out or just not applying themselves academically) because they can do so well in poker. But ultimately it's their own choice. It's hard to tell a 21 year poker player do spend 10 hours a day studying when that could potentially be worth $10,000 to him at the tables. I think as these players age and become a bit more financially secure, their interests will grow outside of poker. We're literally talking about less than 1% of the poker players in the world though.

The main issue is probably with the...."less smart" players that either think they are good, and can beat the game but ultimately can't. And it's a simple case of either them not being able to understand the game well enough or being honest enough with their ability to know that they are fighting a losing battle. You see a lot of young players (players of any age really) that hit short term success either in a big tournament or run up a stake in cash games that think they are better than they are. And what I view is a bigger issue is not the mountain of money they have just accumulated eventually getting sprinkled back into the poker economy....but that that one fluke of success due to short term variance is mistaken for superior skill which keeps them in the game for years and away from more profitable avenues (college, degree, job, etc). And in a sense, you can say that it's almost better for this player to maybe lose a big tournament and flame out of poker early...than win a big one and believe he is better than he really is which sucks him into burning through not just money...but time.

I'm kind of ranting but you get the idea. I don't think the major issue is that the really good and profitable players could be doing better outside of poker. Because they probably could...nobody ever made a billion dollars player poker. But these sorts of people will be successful both inside and outside of poker...and after their poker days are over. This is because they are smart and can handle themselves in terms of being honest with their life in general and knowing when it's time to do something else. And again...this is just a handful of players in the poker community. The bigger problem is that heard of players that see the ones making money and try to emulate their success for years to come and don't know when to throw in the towel and pursue other goals.

A lot of success from poker...comes from skills outside the game itself. You need to know how to play the game: what to bet, when to bet and when to fold...etc. But you also need a ton of self control, maturity and need to be brutally honest with yourself if you'll succeed and those "outside" skill sets that players accumulate (me included) will stay with them the rest of their lives. Sadly, it's usually the players that don't have these "outside" skills that generally stick it out in the game...not the better players making all the money.


-Scott
 

DominiConnor

Quant Headhunter
I'm rather intrigued by this thread, it seems to me that between us we have every skill we need to have a good shot at this.
As headhunter, I'd like to confirm that several high end trading outfits do like people who have done well at poker, as long as they have a useful set of other skills of course.
So the payload is not just the winnings, but being seen to win by people who will pay you to win for them.
An MFE+part authorship of a winning poker bot would be the basis for a cool resume.
But it would have to win...

I'd also like to point out than in Britain online gambling is entirely legal and serious business, and some people have moved to and from the banking quant world to the online gambling industry. Some respectable and large trading firms in London also handle betting on both sport and financial markets since it is not only legal but often the tax is lower or zero. I'd say 20% of the ads on the British version of Bloomberg TV are for this.
The CQF actually has had professional and semi-pro gamblers to talk to students, and some of the risk optimisation work is based upon Paul Wilmott's experience of playing blackjack.

So do we do something or do we talk ?
 
If we set up a working group, it will most likely be for NYC-based folks. Let start it small and keep expectation low first.

Then I am out of the loop, since I am neither NYC nor American based.

Here is a frank question and I expect frank comments.

It seems to me the folks who play poker professionally don't make much money when time invested is taken into account. We are not talking about players like Scotty Nguyen but thousands and thousands who make 5, 6 figure per year.
Compare that to many kids here with a bachelor degree, do MFE and make that much after school.

I have seen many applicants this year from people who have made 100-150K/year playing poker. I do not want to imagine the number of hours they spent online playing, studying stats and what not.

Is it a case of "grass is greener" when they look to a different line of career? How many of these people will crash and burn out after a few years with nothing (saving, degree, career) to show for it?

The other two have already commented on it, but I want to add a thing or two.

Scooot described people who are luckily successful and believe to be better than they are and inevitably fail, and nothing to show for, and in the end getting out way too late.
While I was successful at poker, I never really hit huge success and only made enough money to support myself through college. It was good money and I was always happy to play poker, but in the end I quit, because I was (and still am) attending a competitive school and pursuing a difficult undergrad and being successful at poker are difficult to combine.
I decided to quit poker and focus more on school, because in the long run, I would be better off.

I've never regretted playing poker once in my life. I earned good money even when I was a high school student and the skills and traits learned at poker are transitioning very well into the real world (based on reports from others).
I would say that I am more stress resistant than some people with on the job experience.
 
I'm surprised that so few people on a quant forum have tried to write poker bots.

First off, the serious AI and game theory reserach done at Alberta and CMU has nothing to do with successful on-line poker bots. Simple statistical algorithms work just fine, as is true with quant investing as well. You can get fancy, but you don't have to. All you need is a database to tell you what people are likely to do given their cards and the betting situation. If you optimize the play given that, it will win consistently against all but very good and great players.

Another key is game selection. Good bots search for good games and get out if they are losing. One huge advantage of a bot is it can survey hundreds or thousands of potential games and get into the best ones faster than any human.

Most bots I've seen were written as hobbies by quants who have no knowledge of or love for poker. They enjoy letting it run and and make money, and don't really care when it gets cut off. They are usually detected for their pattern of making consistent money and taking it out regularly, but playing only lower stakes. That's just not common.

The serious bots run by professional advantage gamblers use sophisticated anti-detection techniques, inlcuding buying real identities from real people. $50 buys you an Eastern European identity, but it's $2,000 to $5,000 for a US college student. Of course, the advantage gamblers are not just using these to run poker bots, they're doing on-line sports betting and spread betting as well, sometimes even casino play where they can find a hole. In all but poker, winners are so rare that they get a lot of scrutiny.

I played professional poker in the 70s with a lot of other quant gamblers. Our pure poker skill was less than current world-class players. A top player today played more hands in a year when they were 15 than we played our entire careers. But there was a lot more to making money at poker in those days. You had to get invited to good games, collect winnings and avoid arrest and other harassment. There wasn't much casino poker and, of course, no on-line poker. You had to be good at all other games, because someone who lost money to you at poker would challenge you to backgammon or gin rummy or golf; if you turned him down, you were a hustler only playing games at which you had the advantage. Also you had to be willing to do a little sports betting or card counting when the poker pickings were slim (plus the $100/hand blackjack--remember this is the 70s so $500 or $1,000/hand today--was a great place to get invited to a private high stakes poker game).

The quant gamblers went off in three directions. Card counters tended to be anti-social and guys who liked to fight against things. Most of them hated casinos more than they loved money. A lot of them drifted into running small hedge funds. The sports bettors were very social. A successful sports bettor is a friend to the bookmaking operation, he helps them set the spread. They turned up on Wall Street as executives running risk-taking businesses. The poker players, like me, were in between. We weren't organization men like the sports bettors, but we had to get along with people, unlike the card counters. Most of us traded for banks or ran portfolios.
 
I'm surprised that so few people on a quant forum have tried to write poker bots.

Most bots I've seen were written as hobbies by quants who have no knowledge of or love for poker.

I think said above is the inflection point - it's tough to explain poker solely in terms of formulas and numbers because of the psychology aspect (actually Schoonmaker's "The Psychology of Poker" does a good job of "gridding" players on a 10x10 matrix based on tight/passive/loose/aggressive but it is a somewhat tedious read imho), which probably makes conceptualizing a poker bot more difficult. I think it's also very tough to successfully implement a robust model for something not well understood, to the point above RE: bots written by quants with little background on poker.

Given the geographic limitations of the proposed group i.e. the fact that there aren't going to be any poker experts I would suggest approaching this project as any other implementation of a problem - start with the simplest example possible and work your way up.

Would think a head's up (2 players) limit hold'em game with constant blinds would be the simplest; this is a fairly straightforward problem as due to the cap on betting (that's the "limit" part) decisions in this game would be due to pot odds (fair break even calculations).

I believe I'm the only player based in the NYC area; would be happy to help explain/define the above problem but to be honest I have very little personal interest in building a poker bot for a few reasons; I enjoy the game for the intellectual component and automating a bot in my opinion is somewhat distasteful. But I also pay way too much for eggs who's layers allegedly lived a much nicer life than ordinary chickens so there you go :)
 
I'm surprised that so few people on a quant forum have tried to write poker bots.
And we are hoping to change that with this discussion here, Aaron.
I think it's an interesting subject to investigate from a quant's perspective. When you take out emotion, you have a mountain of a poker hand play data which you can study from.
Crunching power is really cheap these days. You can rent out servers from Amazon by the hours. Some experienced online poker players can suggest what he want to mine of out the data and someone can write the code to do it.
So from a purely technical perspective, this is a very interesting project.
 
Also, he probably won't plug it himself but if you'd like to know more about Poker and Wall Street you can always pick this up:
Poker Face of Wall Street
Thanks for the link, cutiepie. His latest book is A World of Change
Aaron Brown is well known around here as a risk manager at AQR. His poker past is something he mentioned from time to time but many people here don't know it.
Here wrote some very well received guest posts for Quantnet
http://www.quantnet.com/risk-versus-portfolio-management/
http://www.quantnet.com/do-quants-destroy/
http://www.quantnet.com/cds-versus-insurance/
 
And we are hoping to change that with this discussion here, Aaron.
I think it's an interesting subject to investigate from a quant's perspective. When you take out emotion, you have a mountain of a poker hand play data which you can study from.
Crunching power is really cheap these days. You can rent out servers from Amazon by the hours. Some experienced online poker players can suggest what he want to mine of out the data and someone can write the code to do it.
So from a purely technical perspective, this is a very interesting project.

That's a good idea - maybe the players outside of NYC would be able to e-participate from that perspective as well. Apologies if the prior comment came off as snide, wasn't my intention. Just trying to point out that to code a bot you really are going to want to have a better understanding of the game (which will be likely missed if there aren't any actual players involved) outside of the math.
 
Then I am out of the loop, since I am neither NYC nor American based.
What I'm going to do is to put some interested parties together, people who have expressed an interest here as well as people who have talked to me privately.
There is a wide discrepancy of technical skills and game knowledge between people here so it's impossible to put everyone on the same page. There are enough indication here so if you see someone who you like to work with, by all mean contact them privately.

Let start it small and see if we can make it past a point of no return. When we get enough traction, we can then make it a bigger project.

I'm just thinking out loud here . How about a poker bot competition with a cash prize, short of like algo trading. Throw in a 10K prize, have some training data, benchmark and have teams submit their bot algo into a platform and compete for a few days.

I'm drawing a parallel between past trading competitions that our members here have done (Interactive Broker Trading Olympiad) so people like @Scooot can see if this is something feasible.

And if there are other academic teams out there studying this and need a few helping hands, we can certainly join them.

It's all in the name of getting better at what we do for a living, or out of passion. Monetary goal is an after thought here.

I'm a facilitator first and foremost so this is something I'd like to see going on on Quantnet. Everyone here has some common interest and it's personally interesting to be talking about something other than MFE admission chance.
 
Excellent find. Another great read by the same author
http://www.themorningnews.org/archi..._the_pain_and_the_pain_is_always_the_high.php

According to the Times, it’s an appealing article for anyone who a) loves great writing; b) occasionally, fool-heartedly daydreams of undertaking poker as a profession; c) wants to read a brilliant account of what it feels like to lose $9,000 on a misread flush-draw; or d) wants to read what that feels like when your opponent is a Vegas stripper with heart-shaped sunglasses propped on her nose like Lolita.
 
Andy,

I'm not sure if you're (or anyone else) is aware that there are already automated poker competitions held annually very similar to the trading competitions you talking about. Teams from Alberta and CMU, among others compete there.

Measuring a bots success can be somewhat difficult...especially when comparing it to other bots. I'm not 100% sure how they grade the bots at these competitions.

One solution the Alberta team did with POLARIS (their HU LHE bot...google it) was they had it play two TOP ranked professionals...one, Matt Hawrilenko, who is/was generally considered the best HU LHE player, ever. They'd deal the same cards in both games and give the bot one side of the cards one match and the human those same cards (and the bot the other side) the next round.

Matt Hawrilenko I believe was also approached by SIG to do some work in the investment field. I'm not sure to what extent he worked with them but I believe he was there for at least a little bit.

I'm definitely interested in setting up a bot for research purposes. I can't be involved with anything linking it up to the poker sites and profiting from real and unknowing players. I also have full confidence I can explain poker concepts and strategy to others as well as put the decisions needed in a more quantifiable manner that not only a human can understand...but a computer can interpret as well.

Scott
 
An MFE+part authorship of a winning poker bot would be the basis for a cool resume.
But it would have to win...

As a cautionary point if you were to accomplish building a winning bot you'd probably want to research the legal component first, as well as be cafeful about how it was presented on a resume. I built a poker book review website and was asked to take it down because the hedge fund didn't want to have any connection to gambling. You also run the risk of being banned on sites (as hinted at by Scooot) which is obviously lethal for a pro online player. I would imagine laws vary by both state/country so just be careful before making it public knowledge.
 

alain

Older and Wiser
I will envision a partnertship from the point of view of research. Something similar to what the University of Alberta has done. Then, we could publish the findings.
 
When NYT has a series of article on online poker, I found it rather strange. They probably got wind of the impending investigation. No wonder.
Don't know if you guys hear this yet
http://www.nytimes.com/2011/04/16/technology/16poker.html

The owners of three of the largest Internet poker companies operating in the United States were accused Friday of tricking regulators and banks into processing billions of dollars of illegal Internet gambling proceeds.

Eleven people including the owners of Full Tilt Poker, Absolute Poker and PokerStars were charged with violating anti-Internet gambling laws, according to charges filed by federal prosecutors in Manhattan.

Prosecutors also filed a civil money laundering complaint seeking to recover at least $3 billion from the companies, which are all based overseas, court documents said.

In addition, according to the government statement, restraining orders were issued against more than 75 bank accounts used by the poker companies and their payment processors. And the Internet domain names of the companies were also seized.

Representatives for the companies could not immediately be reached to comment on the charges.

Two of the men were arrested on Friday, one is expected to turn himself in to law enforcement and eight others are not in the United States, prosecutors said.

Raymond Bitar, 39, of Full Tilt Poker, and Isai Scheinberg, 64, of PokerStars, were charged with violating the Unlawful Internet Gambling Enforcement Act and other laws. Absolute Poker owners Brent Beckley, 31, and Scott Tom, 31, faced similar charges.

“These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck,” Janice K. Fedarcyk, the head of the New York F.B.I. office, said in a statement. “They lied to banks about the true nature of their business. Then, some of the defendants found banks willing to flout the law for a fee.”

The criminal charges outlined a scheme by the company owners and some employees to direct the gambling profits to online shell companies that would appear legitimate to banks processing payments.

In one case, the government said, the companies tricked banks in processing billions of dollars by disguising the gambling proceeds as payments to nonexistent online merchants. At other times, the poker companies used “payment processors,” who obtained bank accounts and then lied about the source of their revenue.

And in a third instance, the government said, the poker companies persuaded a few small, struggling community banks to process the payments “in return for multimillion-dollar investments.”

The charges are part of a crackdown on Internet gambling in the United States, where it has been illegal since 2006.

In March, Wynn Resorts said that it had entered into a partnership with PokerStars, and that they would work for passage in the United States of legislation that would define illegal Internet gambling. Lawmakers have in the past tried to pass legislation legalizing Internet gambling in the hope of reaping billions in tax revenue.
 
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