Where does the money come from?

[Recliner]

This has been bothering me for quite a while. I don't understand where the money comes from in poker. I started my poker career with $40 and told myself if I lost it I would just stop and never play again. In my first day of playing I lost $12 at .05/.10 limit. The next day I went "WTF?!" went out and bought Winning Low Limit Hold'em (I know, a 2+2 favorite). After reading that book I improved my game, continued to study, bought more books and turned into a winner. /images/graemlins/laugh.gif

I imagine money comes from people that have a high disposable income and feel like playing poker? I'd also think people with gambling problems donate quite a bit of money, and maybe some people enjoy losing money???

My problem is that when I think where the money comes from I am completely unable to take the point of view of a loser. When I try put myself in their place to understand what's going on in their head my brain completely rejects the idea. I suppose that's not a horrible thing. I imagine I’ve built up a belief in my mind that ‘playing poker’ == ‘winning money’. Thinking about it more I suppose the opposite could hold true and those people like playing poker so nothing seems out of place in their mind? Or people get addicted to winning to the point where it clouds their logical ability to see that they are a net loser, or they just don’t care?

I’m bothered that I don’t understand where the money comes from especially because I feel that I’m winning lots of it. I was hoping that someone would hopefully be able to tell me in more definite terms of who the losers are, why they play and why they continue to lose.

[SNOWBALL138]

Most players are overall losers. That doesn't mean that they can't beat some games. For example, if you took your winnings and tried to move up a limit, you might end up being a contributor to that game.
If Sklansky or Ray Zee played in the big game, they might not end up beating the game.

[smurfitup]

it's sort of sad, but i think a lot of winning poker players consider the source of the money to be irrelevant. of course, this is necessary in a way since many of these players are earning their income from those donations, but the question is nonetheless valid. i'm a college student, but i play to make money for my expenses and because i'm a competitive person. still, when playing live, i often find myself dreading being in a pot w/ a person who seems like a compulsive gambler. maybe it's bad to categorize someone that quickly, but there are certain people at my casino that are there every day and lose consistently. these are the compulsive gamblers that feed a lot of the good games, and these are the types that make me hate playing poker live. playing online is a mixed blessing because the anonymity it provides allows you to forget that you're actually playing a real person. but in the end, when you realize the hundreds of thousands of dollars that are won and lost everyday, you can't help but think that some of the people losing the money can't really afford to lose it and some of them can't really control it.

[goofball]

Me.

[MagnoliasFM]

millions of people play blackjack every year. I'm pretty sure most of them are losing players. yet the casinos make millions off them. people can afford to lose, so if you are a pro there is money to be earned.

[smurfitup]

i don't see how the fact that casinos make millions off of losing blackjack players leads you to conclude that people can afford to lose. sure, some people can afford to lose, but a lot of the people playing can't.. i'm sure you can see this.. i don't understand how your argument counters anything posed in this thread...

[mosdef]

the two major sources (i think) are:

1. people who understand that their ev is negative but are willing to trade in money in the long term for short term bursts of excitement when they win. these people are known as "gamblers" and are not entirely new to society.

2. the "one-month, it's rigged, i quit" players who think they are winning players because they see poker on tv and think "hey, i can do that!". these people usually sign up, put in $100 and lose it, then never play again. i think that there are TONS of these people.

[meow_meow]

[ QUOTE ]
the two major sources (i think) are:

1. people who understand that their ev is negative but are willing to trade in money in the long term for short term bursts of excitement when they win. these people are known as "gamblers" and are not entirely new to society.

2. the "one-month, it's rigged, i quit" players who think they are winning players because they see poker on tv and think "hey, i can do that!". these people usually sign up, put in $100 and lose it, then never play again. i think that there are TONS of these people.

[/ QUOTE ]

I agree with this, except that I think the second category is much larger than the first, and that the average amount donated is probably much closer to $1000 than $100, and that these players probably come back once or twice after their initial run of "bad luck" for another go.

[revots33]

Another category is the person who is actually a long-term loser but manages to convince himself he's a winner. They remember their winning sessions but manage to forget the losing ones.

[Jailhouse]

I am very close with people who donate regualarly. I am fascinated with the psychology of the whole thing and have put a lot of thought into why these people keep coming back for more.

I think a major part of it is seeing someone else succeed, and thinking that they can replicate the success because it looks and feels so easy when a person is winning. That intoxication of winning sticks with a person for a long time even after enduring loss after loss, which losers ALWAYS atribute to bad luck. It is delusion that pays winning players rent. Without delusion the poker industry (and probably the gambling industry as a whole) would most likely collapse.

Losing players can't accept that in order to win at poker, you need to know something that your opponents don't know. One of the losing players I know hasn't read a single book or studied the game at all but watches me play high limit games and he actually thinks he could come in there and beat it. It amazes me that he can't recognize that he is getting crushed at $5 SNGs and believes that he can beat a 100-200 game. It's mind-boggling but the mind of a true gambler works differently that of a winning player. He has convinced himself that he is a winning player because of a few "scores" when in reality he has lost thousands upon thousands chasing the dream.

Losing players are clueless as to how much work must go into the game before you can extract anything out of it. Be thankful for this delusion that pays winning player's rent.
-J-house

[mosdef]

[ QUOTE ]
[ QUOTE ]
the two major sources (i think) are:

1. people who understand that their ev is negative but are willing to trade in money in the long term for short term bursts of excitement when they win. these people are known as "gamblers" and are not entirely new to society.

2. the "one-month, it's rigged, i quit" players who think they are winning players because they see poker on tv and think "hey, i can do that!". these people usually sign up, put in $100 and lose it, then never play again. i think that there are TONS of these people.

[/ QUOTE ]

I agree with this, except that I think the second category is much larger than the first, and that the average amount donated is probably much closer to $1000 than $100, and that these players probably come back once or twice after their initial run of "bad luck" for another go.

[/ QUOTE ]

i'll go along with that. i really have no idea what the actual average magnitudes involved are.

[Warren Whitmore]

Denial.

[Recliner]

I think your assessment is true and I have no problem understanding it but I have a hard time actually believing that it is true because it is such a irrational thought process. Or, I know its true but I refuse to accept as true or possible in my reality, and I think that's where my hang-up comes from. I'm not sure I'll ever be able to empathize with these people. I remember reading an article a while ago called Unskilled and Unaware of It, (http://www.phule.net/mirrors/unskilled-and-unaware.html) after which rereading parts of it poker is a prime example that supports the views of the paper.

[ QUOTE ]
Abstract
People tend to hold overly favorable views of their abilities in many social and intellectual domains. The authors suggest that this overestimation occurs, in part, because people who are unskilled in these domains suffer a dual burden: Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it. Across 4 studies, the authors found that participants scoring in the bottom quartile on tests of humor, grammar, and logic grossly overestimated their test performance and ability. Although their test scores put them in the 12th percentile, they estimated themselves to be in the 62nd. Several analyses linked this miscalibration to deficits in metacognitive skill, or the capacity to distinguish accuracy from error. Paradoxically, improving the skills of participants, and thus increasing their metacognitive competence, helped them recognize the limitations of their abilities.

[/ QUOTE ]

[Jailhouse]

In our reality, the thought process of the loser is completely illogical and irrational and hard to understand. However, different perceptions of reality lead to each person forming their own reality based on such perception.

I don't remember where I read this, but when asked if he would fire nukes at the U.S. if he knew it would mean the utter demolition of Cuba, Fidel Castro said that he would indeed. From our perception on reality, this is totally illogical and irrational but from Castro's view of the world, taking such action would actually be very logical.

Not sure if the connection there is strong, but people will take different actions in life based on their wildly different perceptions of reality. In essence, losing players fail to recognize the reality that you and I percieve. They take irrational action because according to their reality, it is perfectly logical.
-J-house

[bernie]

Where do you thinkn the money in craps, roulette or Pai Gow comes from? You think poker is really that much different?

It's not. Except there is usually more ego/denial involved.

b

[AZnuts]

Since poker is just "gambling" for many players, the money spent is viewed as another "entertainment" expense, like the cost of tickets to a game, dinner out, a road trip etc.

When you're in Vegas for a weekend, most people fully expect to lose some money, and have already mentally planned for it in a sense, just like the cost of their hotel. But, or course, there's always the chance that you'll win some too - which makes it so attractive.

I find it interesting when people "worry" about what others are spending/losing on poker. Do you worry if your neighbor or friend buys a new car, or tickets to the game, or golf lessons, etc.? They are all individual choices.

[mosdef]

[ QUOTE ]
I find it interesting when people "worry" about what others are spending/losing on poker. Do you worry if your neighbor or friend buys a new car, or tickets to the game, or golf lessons, etc.? They are all individual choices.

[/ QUOTE ]

i don't disagree with most of your statement, but there is a real leap-of-logic in this last bit. in particular, in poker people hand their money to you and get nothing concrete out of it. now, i know that they can be construed to be "purchasing" entertainment. but the big, big difference is that gambling addiction is very common whereas addiction to purchasing sports tickets, for example, is extremely uncommon (as far as i know). that's the difference.

[AZnuts]

[ QUOTE ]
[ QUOTE ]
I find it interesting when people "worry" about what others are spending/losing on poker. Do you worry if your neighbor or friend buys a new car, or tickets to the game, or golf lessons, etc.? They are all individual choices.

[/ QUOTE ]

i don't disagree with most of your statement, but there is a real leap-of-logic in this last bit. in particular, in poker people hand their money to you and get nothing concrete out of it. now, i know that they can be construed to be "purchasing" entertainment. but the big, big difference is that gambling addiction is very common whereas addiction to purchasing sports tickets, for example, is extremely uncommon (as far as i know). that's the difference.

[/ QUOTE ]


Interestingly, I don't know anyone personally with financial troubles from poker, but have known many people in debt up to their eyeballs on credit cards and loan payments for things they can't really afford. I'm not sure why that's much different - an addiction to buying things, much more common in my opinion. It just seems to be more accepted than gambling.

In any case, my point is I'm not qualified to "judge" people for spending money on a new Jaguar or some poker. Each is responsible for their own decisions.

[mosdef]

i see what you're getting at, but i think you're using the word "addiction" too liberally. mismanagment of money may be more prominent than gambling addiction, and distorted consumer practices may be more common than gambling addiction, but i don't think shopping is addictive in the same way that gambling and drugs are addictive. spending over-your-head seems to me to be more of a symptom of distorted values where you have bought into the myth that the more material you collect the happier you'll be. gambling is addictive in the releases-chemicals-in-your-brain definition of addiction.

[imported_bingobazza]

[ QUOTE ]
It is delusion that pays winning players rent. Without delusion the poker industry (and probably the gambling industry as a whole) would most likely collapse.



[/ QUOTE ]

nail on the head....bullseye....bingo

Bingo

[mosdef]

[ QUOTE ]
[ QUOTE ]
It is delusion that pays winning players rent. Without delusion the poker industry (and probably the gambling industry as a whole) would most likely collapse.



[/ QUOTE ]

nail on the head....bullseye....bingo

Bingo

[/ QUOTE ]

okay - here's a follow up question. what other industries would collapse without delusion? the only one i can think of off the top of my head is the weight-loss program industry, but i'm sure there's others.

[britspin]

This is a really interesting point to me. Tonight I had a very negative session at my piddly little limit of $1/$2- down over 60BB in an hour of two tabling (wanna hear a story? Thought not..).

I had two thoughts at the end of it. One. Losing sucks. It's really annoying, and is absolutley no fun. Winning, on the other hand, is fantastic. I bet I'll try to forget the losing really quickly.

The second was to try and work out where I went wrong and how much i wanted to get better. As it happens I think this time it was marginal, and the savings I could have made were river calls.- still, that was prob 5 BB and that's significant and I need to focus on it. other times though losing has been a real wake up call to bad habits.

Anyway, my point is that losing players will have the same emotional reaction to losing (it sucks) that I do, but a very different rational attitude- either to not worry about the money "because it's a gamble" or simply to carry on blindly without reflecting on why they lose.

I'm relaxed about the first set of people, but the second, doomed to commit the same errors agains and again, give me pause. They'd be better off playing roulette. In the end they'll either quit or develop a problem.

That makes me feel bad, becasue at heart i'd rather the poker boom were a bubble that will pop than an addiction that will hurt people. Even though this is ultra -EV for me.

[FredJones888]

The thing you don't understand is that the majority of people play for entertainment. You attacked it from the beginning as a way to make money. Most people do it for fun initially, and then either:

1. make money immediately
2. lose money and try to get better
3. lose money indefinitely

Of the players in group 3, some are compulsive gamblers but most of them are simply entertaining themselves.

[Sniper]

[ QUOTE ]
big, big difference is that gambling addiction is very common whereas addiction to purchasing... is extremely uncommon

[/ QUOTE ]

You obviously don't have a wife/girlfriend /images/graemlins/wink.gif

[Ulysses]

Go to Vegas. Look around at the billions of dollars in new construction happening.

[Xhad]

[ QUOTE ]
okay - here's a follow up question. what other industries would collapse without delusion? the only one i can think of off the top of my head is the weight-loss program industry, but i'm sure there's others.

[/ QUOTE ]

Self-help books (at least, they would take a huge hit), faith healing televangelists, anything related to ESP and similar nonsense, manufacturers of bad artificial hairpieces, anything employing multi-level marketing.

This is kinda fun. /images/graemlins/grin.gif

[SNOWBALL138]

[ QUOTE ]
I don't remember where I read this, but when asked if he would fire nukes at the U.S. if he knew it would mean the utter demolition of Cuba, Fidel Castro said that he would indeed. From our perception on reality, this is totally illogical and irrational but from Castro's view of the world, taking such action would actually be very logical.


[/ QUOTE ]

I think this is a poor example. I don't want to be a nit, but let me ask you: "What would you say if you were Castro?"

Would you say "No, even if the US invades, I would not use nuclear weapons. These are just for show?"

What else could be said? "Hmmm. I never considered the possibility of US retaliation. No, I would not use nuclear weapons."

I really can't think of any other possible response for the leader of a nation to give here.

[runout_mick]

I'm thinking that this is exactly where the money comes from. I played on pp play chips for 6 months just for fun before deciding to play for real. (p.s. BAD IDEA) When I decided to play for real, I had no Idea about bankroll management, and less of an idea about how to actually play poker (c'mon, K8 os is a good hand. No?). I burned about $200 in 3 days.

Of course, I had to get my money back. So I proceeded to donate another $1000 or so in the pursuit.

By the time I actually decided to study the game, I was about 2k down, and it took me the better part of a year to make it back. This is only because I'm completely obsessive and cannot stand to lose at anything. Point being: a slightly less obsessive player would have quit at -$1000 and taken up a less expensive hobby.

I'm sure there are not thousands, but hundreds of thousands of people just like I was. In over their heads, but refusing to admit it.

[MarkGrandy]

from new players, who haven't learn play well.
After they have, there are new players for them to eat!

[mosdef]

[ QUOTE ]
anything employing multi-level marketing.

[/ QUOTE ]

what is multi-level marketing?

[Xhad]

[ QUOTE ]
what is multi-level marketing?

[/ QUOTE ]

Company convinces people that they can make THOUSANDS OF DOLLARS and OBTAIN FINANCIAL FREEDOM if only they sell a bunch of crap, then they make the consumer buy promotional material and membership fees for the priviledge of selling the crap, then the hapless consumer tries to make their fortune while the company chuckles at all the profits it made from promotional materials and membership fees.

http://en.wikipedia.org/wiki/Multi-level_marketing

[Jeffage]

I really don't care if people in my games are ruining themselves gambling. Sound cold? Sorry, but when they sit in the game, their goal is to take my money and the money of everyone else. If their complusiveness allows them to make a big score by sucking out, they won't feel the least bit guilty about it. And if my solid play sends them home broke to the wife and kids, I won't feel bad at all. When you start playing mid limits, the amt of money is truly enough to hurt some people (and others are just loaded and can afford to gamble). The fact of life is that poker is an ugly game for many and a moneymaker for a few. If you can't tolerate it, poker for anything beyond fun might not be the activity for you.

Jeff

[mosdef]

i don't think any of the people in this thread disagree. the question we're looking at here is "why do they keep handing over their money?" some of it is gambling addiction, sure, but for the rest, we're trying to get our heads around WHY they keep coming back for more.

[Pyromaniac]

lol, kinda fun, indeed. /images/graemlins/tongue.gif

Without delusion the car industry would collapse (well, in the US, anyway).

Without delusion...anything connected with slick sexy advertising.

Except alcohol. the lack of delusion would prolly give that industy a spike /images/graemlins/grin.gif

edit: to OP, this is a good question. I wonder about it myself. But then, when I'm in a parking lot surrounded by new SUVs, I wonder where all *that* money comes from, too.

[jb9]

[ QUOTE ]
some of it is gambling addiction, sure, but for the rest, we're trying to get our heads around WHY they keep coming back for more.

[/ QUOTE ]
For some people, it is simply disposable money that if they don't spend it on gambling they will spend it on something else (expensive dinners, wine, theater tickets, football tickets, new paint job for car, new stereo system, lawn ornaments, 100s of DVDs they will only watch once), but one way or another it is getting spent on "fun".

Have you ever gone to a big casino on a weekend night and seen 100s of people at the slot machines? Or the people losing 100s of dollars at blackjack and roulette and craps?

Many of those people know they are likely to lose their money, but it's fun to gamble. So if you like gambling and can afford it, why not risk a little $$$ to have a little fun? Besides, you might win...

[AZnuts]

[ QUOTE ]
By the time I actually decided to study the game, I was about 2k down, and it took me the better part of a year to make it back. This is only because I'm completely obsessive and cannot stand to lose at anything. Point being: a slightly less obsessive player would have quit at -$1000 and taken up a less expensive hobby.
[ QUOTE ]
i don't think any of the people in this thread disagree. the question we're looking at here is "why do they keep handing over their money?" some of it is gambling addiction, sure, but for the rest, we're trying to get our heads around WHY they keep coming back for more.

[/ QUOTE ]

[/ QUOTE ]

The first quoted portion above sort of answers the second.

How about an analogy . . . Why do so many people become obsessed with GOLF; spending sometimes $1,000's on equipment, gimmicks, lessons, books, devices, etc, not to mention the cost of actually playing?

I'd say its simple - the CHALLENGE to become better at it. Let's face it, a large majority of golfers will never be all that good, but they'll keep coming back for the challenge to "win" at the game. Human competetive spirit.

[USGrant]

If winners are rare in poker, and losers are common, then the winners only have to win a very little from each loser to make a nice profit. The losers can drop a $1000 over a year and, because they don't keep records on PokerTracker and don't like to admit they blew a grand on gambling, will convince themselves they were "down a little" or "broke even" for the year. A winner only needs a very little slice of that $1K, and a very little slice of the other loser's $1k, etc., etc., to make thousands in that same year. It's a nice economy if you're good and you have a lot of time to kill.

[Alex/Mugaaz]

You're confusing zero sum with zero rake.

[meow_meow]

exactly.
At 5/10 6max for example, the rake is eating about 2BB/100 from every player. If you are a 2BB/100 winner, you are actually beating your opponents by about 4BB/100. So if the average player is losing 2BB/100, and some of those are winners, then others are losing at a substantially larger rate...

[scalf]

action, baby

gl

/images/graemlins/heart.gif

[pokerjoker]

ever been to a casino? look at the people who hit on 17 or double down with a 9 when the dealer shows a 10 cause they feel lucky. Its not rare at all. How much do u think the gubment makes on lottery? There are all kinds of people in the world.

[mosdef]

[ QUOTE ]
ever been to a casino? look at the people who hit on 17 or double down with a 9 when the dealer shows a 10 cause they feel lucky. Its not rare at all. How much do u think the gubment makes on lottery? There are all kinds of people in the world.

[/ QUOTE ]

the lottery is a different beast. gamblers will throw around a few hundred dollars at the casino just for the hell of it. people buy lottery tickets because they want to completely turn around their lives in one instant because they don't want to put in the work/time to do it the hard way.

[Python49]

Interesting topic to me because I probably have about 15-20 real life friends who have ALL played poker online and lost money. I used to be a part of this mold before I started winning I had lost two $50 deposits and quit and bought into the general consensus that online poker was rigged. Then I did my homework and came back with a vengeance. I can tell you first hand that there are ALOT of college kids out there who think they are GODS GIFT TO POKER.

Like i said, i personally know in real life about 15-20 players who HONESTLY believe they are great players but all have lost money online. Why do they believe they're great? Because ofcourse every other night they take down the big $5 tournament at a buddy's house. None of them really are winning they're just switching their money around every now and then and when they win they attribute it to being good players.

I personally know of a guy who lost his life savings online. He is not some rich business man, he was a college guy 21 years old, lost his life savings online because he had no self control. He lost about 12,000. I've got another friend who whole heartedly believes that he is a GREAT player and that whenever he loses online its because of "bull sh*t and suck outs". He has been playing on and off for about a year now with just $50 deposits and is probably down about 6,000. He borrows from people to play, ends up owing his girlfriend and friends money, and spent the summer working to pay it off. Each time he goes broke he says he's quitting for good but a month or so later comes back to the game, runs hot for a bit and thinks he's "figured it out".. only to lose again.

Another friend of mine plays every day and drinks all day while playing, it's pretty sad really. They all constantly msg me about bad beats they took and the reason why they can't win but none of them have any idea they're chasing after something they can't catch. The question was what type of people out there are losing money online? Well I see them with my own eyes every day at school. They think they're good, they try out online.. take some bad beats and think eventually they'll win... end up running hot then going bust.

They hear about my success and think "hey i've beaten this guy heads up in our tournaments before (lucky suck outs) and he's winning then ofcourse I can too!". And these are just college kids my age who don't have money so you can imagine the full grown adults with money to burn.

[ QUOTE ]

I find it interesting when people "worry" about what others are spending/losing on poker. Do you worry if your neighbor or friend buys a new car, or tickets to the game, or golf lessons, etc.? They are all individual choices.

[/ QUOTE ]

To some extent I can agree with your post, in one sense there is something simular between spending money on gambling and on other things like a new car.
But I think that if I sold the car to the neighbour, I might worry about if he could afford it or not. And even more so if I suspected that he might be addicted to shopping.

And this is why one really would prefer denial instead of thinking about the morality in poker..

[mosdef]

[ QUOTE ]
And these are just college kids my age who don't have money so you can imagine the full grown adults with money to burn.

[/ QUOTE ]

good post. but i think you have this last sentence backwards. full grown adults may have more money, but they've also had more up and downs, successes and failure in life and are much more likely to understand that they aren't good at everything. substantially more college kids are going to think that they are winners because a lot of college kids have been babied and pampered all the way through their lives and they've had the "everyone's special, including you!" message beaten into their heads every day since grade 1. that's just part of the culture today.