The Poker Business (cont'd)

I think it was appropriate to explain the general philosophy that dominated the early stages of our online poker business. We sat around, waiting on a big hand. We spent most of the time at $.25/.50 or $.50/1 online tables. Sometimes we ventured into the $1/2 range. We played solid hands for the most part and were profiting nicely.

However, the business was doomed before it really began for two reasons:
1) We are two cocky S.O.B.'s;
2) We began playing tournaments;
3) We weren't that good at poker.

The combination of 1) and 3) was truly a disaster. When combined with 2), it led to a quick ruin for the business. You see, you can play at cash games, sit around and wait for good cards, even if the competition is a little out of your league, and still be OK. We had some lucky streaks and thought we were making good profits. Then, we got bored. We began playing 9-Player SNG's for $20 a pop. We typically sat around, waited on good hands and played solid until the blinds ate up our modest stack. I think we came in fourth just about every time we played. Right out of the money.

The more we lost, however, the more we wanted to play. So we kept going. Eventually, the gains from the times we placed could not cover the losses from the buy-ins and our bankroll dwindled. The fact that it was the two of us playing together actually hurt us. This is because when two people argue about a situation, the one not taking the risk can typically win the argument. Err on the safe side, right? Well, if you use this strategy at a cash game table and assume the risky choice is right 50 percent of the time and the safe fold is correct 50 percent of the time (which is about right, considering I have a career 53% winning rate at showdowns on the river and am, by nature, a weak and conservative player so I am more apt to fold a winning hand on the flop or turn), then you should break even. At a tournament, however, it is more profitable to choose the risky side. This is because you must accumulate chips to win these tournaments. You must make technically bad plays in order to get enough chips to win because of the increasing blinds. And remember, there's no money for fourth place. At a cash game, technically, if you are seated with 9 players and are the fourth best player, you will come out ahead over time (there are 3 players better than you and 5 worse). This paradox is the exact reason I no longer play SNG tournaments (coupled with the fact that the winnings are arbitrarily distributed between players and have no correlation to the plays you make). I don't see a real edge in playing tournaments as opposed to playing cash games and getting instant returns on your good plays (which is not arbitrary at all). This is probably why some of the greatest poker minds in the world have no World Series of Poker Bracelets to show for it (and why Phil Hellmuth has ten bracelets while being unsuccessful at serious cash games).

At the end of the day, Lil Mac and I decided to disband the business and had the following things to show for it:

1) $50 from one single cash out;
2) $0.24 in my PokerStars account (not enough to buy in at the $.01/.02 tables);
3) The Top Gun play;
4) Some inside jokes that are only funny when playing poker or drunk and talking about poker;
5) Lil Mac lost his real job;
6) An honest feeling that poker sites cheat somehow to reward bad players;
7) A Greg Raymer 2004 World Series of Poker Poster purchased with Frequent Player Points.