Why Poker Players Are More Like Economists Than You’d Think

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BetMGM Oct 28, 2022, 5:53 AM

Poker is a game in a league of its own. Other card-based casino table games like blackjack and baccarat are largely a question of chance, tempered by your knowledge of probability. Conversely, poker is closer to a science. That’s because the best poker stars today apply the principles of game theory economics to their play. How that came about is quite a story! Keep reading to discover what poker and economics have in common and how to apply game theory to online poker.

From gutshot gambling to game theory economics

The image of poker has changed a great deal since the origins of the game in the Wild West. Back then, gamblers would play stud poker in saloons that would sometimes fill with gunsmoke when disputes over the cards turned violent – those old-time players relied more on chance and gut instinct than poker theory. Poker continued to be predominantly a gambling game into the 20th century when the popularization of Texas Hold’em changed the poker world forever.

With its combination of hole cards and community cards, Texas Hold’em transformed poker from a game of chance into a game of skill that forces players to bet, raise, call and fold strategically. It’s no wonder that Texas Hold’em has been adopted as the main game of the World Series of Poker. You have to know the potential strength or weakness of your hand without ever seeing your opponent’s cards. You’ll also need to figure out what your opponent’s hand could be. Texas Hold’em is even more mathematically complex than chess, so it’s beyond the ability of any human player to calculate the odds perfectly at a live table. 

However, the mathematical challenge in this variant was dramatically affected by the arrival of online poker. Suddenly, players could use advanced poker tools such as trackers and solvers to identify the best play for any given situation. This had a noticeable effect on how people would play poker online. Specifically, the old gutshot approach gave way to a more scientific method known as game theory optimal (GTO) poker.

When is poker game theory optimal?

GTO poker gets its name from game theory, a mathematical modeling tool that economists use to model how consumers and companies behave under various circumstances. Game theory analyses situations where a player’s best strategy depends on what other players may choose to do. For example, a goalkeeper in a game of soccer may choose to dive left or right, depending on what direction he thinks a penalty-taker will shoot. 

In the same way, companies will price their products depending on how they think their competitors will price theirs. The sweet spot for game theory is known as a Nash equilibrium. Invented by Nobel prize-winner John Nash (as played by Russell Crowe in the movie A Beautiful Mind), a Nash equilibrium exists when all players make the best possible choices given their rivals’ choices. For companies, this means maximizing profits according to the prices that other companies choose. For online poker players, this means making the best play depending on the choices available to your opponent.

How to think about game theory optimal poker theory

There is one crucial difference between GTO poker and game theory economics. Economists assume that companies operating in the same market are playing a positive-sum game, growing the size of the pie so that more spoils can be had for all. Poker, by contrast, is a zero-sum game. There can be only one winner at the end of the day! This rules out the possibility of achieving a true Nash equilibrium in a poker game. 

That said, it is totally possible to apply game theory to poker. The primary aim is to make the decision that will return the most profit in the long term. According to GTO theory, the way to do that is to think in terms of hand range. This means thinking about every possible hand that you or your opponent would logically call or raise within a specific situation. Playing optimally in this way makes exploiting you very difficult, allowing you to minimize your losses and maximize your profit over time.

GTO poker theory in practice

The widespread use of GTO theory among online poker players has changed the game significantly. One of these changes is a marked increase in aggressive bluffing. Game theory shows that you should, on average, have a ratio of two bluff bets to one value bet on the flop. Betting more often with weaker hands forces your opponents to call often. This has two advantages. First, it increases your chances of winning when your hand is strong. Second, your bluffing hand may improve on later streets.

Another change is a general improvement in short-stack play. When you’re down to your last chips, the choice often comes down to whether you go all in or fold. GTO poker tools help players to narrow down their options with accurate recommendations as to when to shove or fold.

A third important change that GTO theory has brought is the use of mixed strategies. If you think about it, your opponent could always be using tracking software to analyze your play and read your range when you play poker online. A player with a mixed strategy will prevent this by making suboptimal plays from time to time. Say you have a mediocre hand and the player to your right open raises. The correct orthodox move would be to fold. With a mixed strategy, you would alternate between calling, folding and three-betting.

Putting poker theory into practice at BetMGM

Interested in exploring the ins and outs of GTO poker? You’ll get all the practice you need when you register for a poker account at BetMGM. Hone your strategy with daily and weekly Texas Hold’em and Omaha tournaments. You could even play it old school with Seven Card Stud. For something to relax with in between poker sessions, our online casino will keep you entertained with a broad range of online slots and casino table games, such as blackjack, roulette and baccarat, with live dealer options included.

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Our BetMGM editors and authors are sports experts with a wealth of knowledge of the sports industry at all levels. Their coverage includes sports news, previews and predictions, fun facts, and betting.

Our BetMGM editors and authors are sports experts with a wealth of knowledge of the sports industry at all levels. Their coverage includes sports news, previews and predictions, fun facts, and betting.