Raising the Stakes on Online Poker

WASHINGTON – Howard Lederer, aka “the Professor,” is a professional poker player, not a gambler. If Congress will acknowledge this distinction, it will rectify one of its recent mistakes.

In 2006, Congress, cloaking cunning with moralizing, effectively outlawed Internet gambling by making it illegal for banks or credit-card companies to process payments to online gambling operations. This was more than moral pork for social conservatives. It also blocked online competitors from poaching gamblers from the nation’s most aggressive promoters of gambling – state governments. They are increasingly addicted to revenues raised by lotteries – the 42 states that have lotteries spent $520 million in 2007 promoting them – and from taxation of other legal gambling. The law exempted Internet state lotteries and two powerful and vocal interests – online betting on horse racing and some fantasy sports betting online.

Having turned gambling, which once was treated as a sin, into a social policy, government looks unusually silly criminalizing online forms of it. Granted, some people gamble excessively (although not nearly as many people as eat excessively). Granted, gambling becomes addictive to a small minority (although it is not nearly as addictive as smoking and drinking). Granted, gambling is morally dubious when it is only the unproductive pursuit of wealth without work (although gambling is productive of pleasure for tens of millions of Americans for whom it is a frequent pastime). But never mind whether government should try to tightly circumscribe a ubiquitous human activity that generally harms nobody.

That is beside the point Lederer and the Poker Players Alliance are toiling to make, which is that by sweeping online poker into its proscription of online gambling, Congress committed a category mistake. Congress, Lederer thinks, should revisit the work of John von Neumann (1903-57), the Hungarian-born mathematician who, after working for the Manhattan Project on implosion design for the atomic bomb, became a defense intellectual specializing in the relevance of game theory to strategic thinking. Chess involves logic; roulette involves probability theory. Poker involves logic, probability and something pertinent to military and diplomatic strategy – bluffing.

“Theory of Parlor Games” (1928) and, with Oskar Morgenstern, “Theory of Games and Economic Behavior” (1944) established the field of game theory. Another of today’s leading professional poker players, Chris Ferguson, is the son of a mother who is a mathematician and a father who teaches game theory at UCLA.

When you play chess, Lederer says, there is symmetry of information: Both players have all the information provided by the location of the pieces on the board, and both are equally ignorant of the opponent’s intentions. A computer can be programmed to “play” a powerful game of chess, but not of poker, wherein your opponents’ cards are concealed.

Lederer is confident that a brain scan of someone playing poker would reveal a lit-up frontal lobe, but the lobe of someone watching television would show up cool blue. A poker player – unlike someone playing roulette, a lottery or “video poker” (which Lederer says is a misnomer; it is a game of chance governed by a machine) – is trying to apply skill, acquired by experience, to increase the probability of winning each hand.

The son of an English teacher at St. Paul’s School in New Hampshire, Lederer decided to spend a year studying chess before matriculating at Columbia University. Instead, he discovered poker. He started at Columbia but left, reasoning that he had found his vocation. He has won about $5 million.

But what is his stake in decriminalizing online poker? After all, he plays much more on green felt-covered tables than online. His interest is threefold. First, his libertarian temperament – he lives in Las Vegas, where almost anything goes – is offended by mother-hen government. Second, he wants as many people as possible to have access to poker’s delights. Third, the more poker players there are, the larger will be the ranks of competitors, and the television audiences, for professional poker competitions. Hence the larger will be the potential winnings. This year, Lederer says, there were 6,494 competitors in the World Series of Poker Main Event, down about 1,000 from 2006, largely because more players used to win their $10,000 entry fee in online tournaments.

It is a poker skill to know when to hold ‘em and when to fold 'em. Congress probably should fold its interference with Internet gambling, and certainly should get its 10 thumbs off Americans’ freedom to exercise their poker skills online.

The Patriot Post® · Raising the Stakes on Online Poker