Alan's Cardplayer Article

[thebroker]

In this week issue Alan writes that Bill Gates plays really low-limit due to his psycological bankroll. Even though he could play $300k-600k instead he plays $3-6 for example. I've read of Gates playing in the little games before, but have a different view as to why. The way I look at is the biggest game going is for stakes that are way to low to matter to him anyway, so why not play $3-6. Nobody can afford to sit with him 300k-600k. It would be like you or I walking in a room with .01-.02 being the smallest and .03-.06 being the biggest. Which game would you play in? Financially it doesn't matter. The outcome would'nt mean a damn thing in the morning. By the way Alan, I really learned a lot from your book and appreciate that you are an active member on this forum.

[Ed Miller]

I would assume that Bill plays low limit because he feels that's where he can play and make money (or at least not lose too much money). Bill is not going to throw his money away... I doubt you will see him play in the pit ever. He would never knowingly make any investment, deal, or bet that he thought was a loser.

[drewjustdrew]

Do you think if Bill Gates loses a dollar in vending machine, he calls Building Services for a refund? I'm sure every decision the man makes does not revolve around expected value of money.

[thebroker]

From what I've read he is a losing player. I agree that he probably wouldn't go against the house. He is a competitive person and I believe that is why he chooses poker over the pit.

[Al Schoonmaker]

Hi everybody,

First, thanks for reading and commenting on my article. Every writer likes to know that people pay attention to his work.

Since Bill Gates doesn't confide in me, I really don't know why he plays for low stakes. I think that his psychological bankroll is not primarily about money. A $10,000 loss is objectively trivial to him.

My understanding is that he is extraordinarily competitive. I've heard he gets angry when someone sucks out on him. Of course, all the stories about him are questionable. I've heard them all fourth or fifth hand, and they may have been "edited."

By playing at low stakes, he encounters weaker players, which increases his chances to win. With him and many people, winning is what it's all about.

I know that my most intense competitions are NOT at the poker table. In fact, they have nothing to do with money. When my family plays Scrabble or Trivial Pursuit, it's war.

I've also seen lots of people say, "I'm never going to play golf again," even if they don't play for money. The basic fact is that for many people winning involves lots more than just money. I think we poker players overstate the importance of making money and underestimate the importance of other motives.

By that's what you'd expect a psychologist to say.

Thanks again for your comments.

Al

[Ray Zee]

the main reason he plays small stakes is image. he deals in big figures and has business dealings with people all over that must respect him. if he is known as a big gambler it hurts his image and costs him more money in bank matters and business dealings.
another factor is that by playing small he never looks bad. if he plays large games and loses he looks like a sucker and that will follow him around. even though the money is small to him if he loses a million say, other contacts dont have the concept in mind to understand his loss in relation to his bankroll. so they see his loss as an amount that is meaningfull to them.

[Mac]

Saw something similar with ex-Sixers owner Pat Croce, playing $1-5 stud at Harrah's in AC. The whole table was joking with him that he should move up to the higher stakes tables, but he said he was just there to relax and have a good time. Speculating that Gates plays low limits
because "it's a better investment" is silly. I think you'd be amazed at how guarded some of these guys are with their money (particularly self-made successes like Gates and Croce). They realize they'd get beat up in a higher limits game so just relax with us low limit humps.
- MAC

[MRBAA]

I think there's a much simpler explanation: Gates isn't a gambler, he's a card player. I've read he also plays bridge with Warren Buffett. As such, he probably wants to play in a game commensurate with his skills. What would be the "fun" of sitting down with pro and stronger amateur players in a bigger game and being the worst player at the table? I think the money doesn't mean a thing -- his time is immensely valuable and when he spends it on poker, he is doing it to relax and enjoy himself in a game that is right for his degree of knowledge and experience.

[Jedi Poker]

According to Bill Gates, he and Paul Allen started Microsoft with several thousand dollars worth of poker winnings from their college buddies. He writes this in his book The Road Ahead. I read this book a few years ago and still remember that he made this claim somewhere between pages 28 and 42. The annual Forbes 400 issue has also mentioned this story for several years now.

It is impossible to know why Gates played 3-6 instead of the 3,000-6,000 game that Doyle Brunson supposedly challenged him to join. But Gates has been known to treat his millionaire Microsoft workers to breakfast at Denny's. He and Warren Buffett have also been known to order Burger King Whoppers while playing bridge.

My guess is that Bill Gates just has so much money, that to him there really is no difference between a $175 Kobe Steak and a $1.89 Whopper. Or a 3-6 and a 3,000-6,000 game for that matter!

[thebroker]

Nice post, I'd never heard about the college poker games before.

[thebroker]

This guys ONLY worth 1 billion and plays head-up $20k-40k. Is he believed to a sucker? I'm curious if it has in any way hurt his business. Certainly helped Forrest out.

[Al Schoonmaker]

Hi everybody,

This thread is a lot of fun, and I'm glad I mentioned Bill Gates, even though nobody really knows why he plays $3-$6. However, the NY Times bestseller, "The Millionaires Next Door," provides an insight into Gates and lots of other rich people.

It said that the public's perception of high spenders is completely false, that the single word that best describes millionaires is "frugal." They don't just hate to lose money playing poker. They hate spending it. That's one reason they get rich.

Bill Gates has so much money that he couldn't spend it or lose it at poker or get rid of it almost any other way. But, if that story about treating people to breakfast at Denny's is true (and I have no reason to doubt it), his "psychological bankroll" is REALLY small.

Have any of you ever played with him? All the stories I've read are third hand or worse. I've heard, for example, that he didn't even play for a couple of hours. He watched the game. I've also heard that he doesn't tip the waitresses when they deliver the free drinks. I have no idea whether these stories are true, but they are consistent with the pattern of "frugality."

I do know that he did not contribute significantly to charity until he took a lot of heat for not doing so.

Regards,

Al

[MRBAA]

Al, I always enjoy reading your posts and often agree with your perspective, but you are just flat out wrong on Gates and charity. He gave very little for a long time, but always said he wanted to really make a difference and planned to give most of what he has eventually.

He has now taken significant steps towards doing this. The Gates foundation is already the world's largest private foundation. It is run by his father (among others) and has focused on education and healthcare in some of the world's poorest nations. Only governments give more. To say he did this because he was concerned about his image seems to me unlikely. He could have made a few high profile donations (a children's hospital here, a university endowment there) and buffed his persona at a fraction of the price. I believe he is a brilliant and driven man who is determined to change the world as much as he can -- and I like the direction his efforts are taking.

btw, the story about staring Microsoft with college earnings is a canard as well. Gates' father was a banker and invested about $1mm seed money to get Microsoft off the ground.

[SittingBull]

complimentary drinks. This is interpreted to mean "free drinks".
If one tips the waitress,he is paying sometime for the drinks. The waitress' salary should be paid by her employer,NOT the customer.
If the drinks are advertised as "complimentary" they should be "free drinks".
I rarely tip the waitress when I play poker and order a drink.
I also believe the idea of tipping 15% to 20% of one's restaurent tap is also absurd--UNLESS THE waitress is my sister or mother.
The "tip" should be included in the price of the meal.
For example,instead of dinner being advertised for 40.00,it should be priced at 48.00. The waitress/waiter should receive full pay from their employers ONLY--NOT from their customers.
A person should not allow himself to fall for these advertising scams. BTW,Y should Gates buy ohter people their breakfasts?? Were they his sisters/father/mother/brothers??
I remembered when my sister-in-law chided me for not tipping the waitress 20% of the dinner tab. She wanted to know if I would have done the same to my sister if she were the waitress.
I said "NO"--but this waitress was not my sister.
If I had a rich buddy,I WOULD NOT expect him to pay for any of my meals.

Happy pokering,
Sitting Bull

[Munga30]

Gates' father was a lawyer.

Gates Jr. Bio (http://www.prestongates.com/meetpge/wGates.asp)

Bill avoided VC because of advice from dear old dad.