Beyond Chance? The Persistence of Performance in Online Poker

PLoS ONE 10(3): e0115479, March 2015

35 Pages Posted: 15 Aug 2012 Last revised: 3 Mar 2015

Rogier J.D. Potter van Loon

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Martijn J. van den Assem

VU University Amsterdam - Faculty of Economics and Business Administration

Dennie van Dolder

Nottingham School of Economics - University of Nottingham

Date Written: December 1, 2014

Abstract

A major issue in the widespread controversy about the legality of poker and the appropriate taxation of winnings is whether poker should be considered a game of skill or a game of chance. To inform this debate we present an analysis into the role of skill in the performance of online poker players, using a large database with hundreds of millions of player-hand observations from real money ring games at three different stakes levels. We find that players whose earlier profitability was in the top (bottom) deciles perform better (worse) and are substantially more likely to end up in the top (bottom) performance deciles of the following time period. Regression analyses of performance on historical performance and other skill-related proxies provide further evidence for persistence and predictability. Simulations point out that skill dominates chance when performance is measured over 1,500 or more hands of play.

Keywords: poker, online poker, no limit texas hold’em, online gambling, skill, chance, game of skill, game of chance, performance persistence, predominance test

JEL Classification: C01, D80, K00, K34

Suggested Citation

Potter van Loon, Rogier J.D. and van den Assem, Martijn J. and van Dolder, Dennie, Beyond Chance? The Persistence of Performance in Online Poker (December 1, 2014). PLoS ONE 10(3): e0115479, March 2015. Available at SSRN: https://ssrn.com/abstract=2129879 or http://dx.doi.org/10.2139/ssrn.2129879

Rogier J.D. Potter van Loon

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Martijn J. Van den Assem (Contact Author)

VU University Amsterdam - Faculty of Economics and Business Administration ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Dennie Van Dolder

Nottingham School of Economics - University of Nottingham ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

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