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. Sultanpoker Simulations point out that skill dominates chance when performance is measured over 1,500 or more hands of play.
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Citation: Potter van Loon RJD, van den Assem MJ, van Dolder D (2015) Beyond Chance? The Persistence of Performance in Online Poker. PLoS ONE 10(3): e0115479. https://doi.org/10.1371/journal.pone.0115479
Academic Editor: Matjaz Perc, University of Maribor, SLOVENIA
Received: August 23, 2014; Accepted: November 24, 2014; Published: March 2, 2015
Copyright: © 2015 Potter van Loon et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited
Data Availability: All relevant data are within the paper.
Funding: Financial support for this project was provided by Erasmus University Rotterdam, the Erasmus Research Institute of Management (ERIM), and the Tinbergen Institute. DvD received further support through the Netherlands Organisation for Scientific Research (VICI NWO Grant 453-06-001), and the Economic and Social Research Council via the Network for Integrated Behavioural Sciences (award n. ES/K002201/1). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.
Competing interests: The authors have declared that no competing interests exist.
Poker is the most popular card game in the world. Every day, hundreds of thousands of people play poker for real money on the Internet (Online Poker Traffic Reports). In 2013, online poker rooms generated approximately €2.8 billion in gross win (H2 Gambling Capital). The popularity of the game is also evidenced by the many TV reports of major poker tournaments and the number of participants in these tournaments. In 2014, for example, 6,683 people paid $10,000 to participate in the most renowned poker tournament, the Main Event of the World Series of Poker in Las Vegas.
At the same time, there is a widespread controversy about the legality of poker and the appropriate taxation of winnings. A key issue in the debate is whether poker is to be considered a game of chance or a game of skill. Unlike with games of skill, organizing or playing a game of chance is prohibited or restricted in many countries. Also, many countries have a separate gam(bl)ing tax for games of chance, while money won in a game of skill is generally subject to regular income tax. Kelly, Dhar and Verbiest  map legislation and case law on poker for various countries, and show that there is great variation. US regulation even differs across states. Over recent years, several law papers have argued that poker is a skill game and should be recognized as such [2–4].
Authorities often have a less permissive stance towards online poker than towards live poker. In the US, for example, the Unlawful Internet Gambling Enforcement Act (UIGEA) that was adopted in 2006 had a major impact: although the act did not forbid online gambling, it did prohibit the transfer of funds to and from online gambling businesses. As depositing money is necessary for playing online poker, this act effectively declared online poker illegal. If poker were to be considered as a skill game and not as gambling, this could be an argument to exempt the online poker business from the UIGEA .