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I'm pretty happy raising that turn.

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If I'm behind, he calls/raises, if I have him beat, he folds. I'm confused why it isn't better to allow the third possibility that he is betting while behind? Is him hitting on the river that likely?

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Because he's loose and if he's playing something rediculous like T9 or K9 of hearts or an OESD why do we want to make it easy for him to draw out if we're ahead. Since he's a lag, there's a good chance you're ahead when you hit the A on the turn.