21st Lecture - Treating Poker As A Business

Treating Poker As A Business

The following lecture was the 21st Tuesday Session, held February 16, 1999, and later
appeared in Card Player magazine.

The Business of Poker Can Be Very Profitable If You Know What to Dont.

It's OK to play poker frivolously. Have fun. Giggle. It's a great game. Not every golfer needs
to break par. You can have plenty of fun playing once a year and shooting 130. So, you don't
need to be good at golf to enjoy it. Same goes for poker.

But if you've reached the stage that you'd like to play poker seriously and you're ready to
make some money, you probably want to treat poker like a business. This was the 21st in my
serious of Tuesday Session classroom lectures at Mike Caro University of Poker, Gaming,
and Life Strategy. It was delivered earlier this year and is specially enhanced for Card Player.
The title was…

Treating Poker As a Business

1.

It's OK if playing poker is fun

- as long as you aren't playing for fun. Some people don't want to treat poker as a
business. For them, it's recreation. And that's just fine with me. There is no reason that
people can't enjoy poker casually without having to carefully crunch and critique it.

As pure recreation and entertainment, poker is one of the most fascinating games ever
devised. And perfectly reasonable people - many of them doctors, lawyers, and stock
brokers - may be too busy managing the success of their professions to invest the time
needed to master poker. These people may want to hear a few tips, but mostly they
just want to play the game - not devote their lives to it. Poker is fun for these people; it
is not a business.

If you're ready to take poker seriously and play full or part time with the intention of
making money, then you need to think of it is terms of being a business. But it can still
be fun.

2.

What is "enough" when you treat poker as a business?

o

Just knowing poker isn't enough;
you need to play seriously.

o

And playing poker seriously isn't enough;
you need to play poker ample hours to earn a living.

o

And playing poker seriously ample hours to earn a living isn't enough;
you need to play in the right places.6. And playing poker seriously ample hours
to earn a living in the right places isn't enough; you need to play at the right
times.

o

And playing poker seriously ample hours to earn a living in the right places at
the right times isn't enough.;
you need to play against the right people.

o

And playing poker seriously ample hours to earn a living in the right places at
the right times against the right people isn't enough;
you need to play your best game all the time.

o

Playing poker seriously ample hours to earn a living in the right places at the
right times against the right people and playing your best game all the time is
enough
- IF you keep records!

3.

Why keep records?

Records aren't just for your accountant or for your taxes. Keep them to analyze what
works. Which games are better for you? Which limits? Which opponents? Which
casinos? Which hours? Use these statistics just as a good baseball manager would to
make strategic decisions like when to bunt, when to steal bases, when to use a left-
handed pitcher.

Additionally, when you have records, you can't con yourself about how well you're
doing. You must face reality, and that can motivate you to improve and stay focused.

And never destroy your records. It's OK to declare a new "campaign" and start fresh,
but keep those old records for reference. In fact, starting over with a new campaign
isn't a bad idea. The past is the past, and presumably you've learned new things,
decided on better strategies, and maybe determined to apply new discipline from this
point onward. Fine. Then there's no reason you can't declare that brand new campaign,
just like a baseball team begins a new season. And you don't even need to wait for the
last season to end, if it will please you psychologically to begin anew right now. You
can even give a new campaign a name. Call it "Campaign Stud Storm" or whatever
makes you happy. But wait!

I said, wait! Before you begin that new campaign, make sure you do not destroy your
old records. I've made this mistake when I first started out, and I wish I had all my
early records now to contrast them to my current experiences. And, to be truthful, I
don't always keep game-by-game breakdowns by category anymore, because I only
play poker five or so times a month (sometimes more, sometimes less) and I don't
have the same passion for percentages that I did years ago when poker was my only
profession. But this is my failing, and it shouldn't be yours. Keep very detailed
records. They will help you.

4.

Location.

Suppose you want to open a restaurant. You've heard the old adage, "The three keys to
retail business success are location, location, and location." Perhaps that's a little
overstated, because there are many other factors to consider and things to do when
setting up a successful retail store. But, location is often the most important, because if
customers can't find you and visit you easily, they will usually shop elsewhere. The
point is, you want to do business where you have access to the best customers, so you
can make the most money.

Poker is the same way. And, in poker, your weakest opponents are your best
customers. If you're a serious player or a professional, when you take a seat in a poker
game, you're setting up shop. You've opened for business. Suppose you had to buy a
license to sit in that one seat at that one table for years to come. Then you'd have to
hope you'd chosen a good casino and that the players who challenged you day after

day would be easy to beat (good customers) and that the game would be the limits you
want and the form of poker from which you are most able to profit.

Fortunately, it doesn't work like that. There's no license required, and you don't need
to build or lease a building freezing you to a single location. One of the great things
about poker as a business is that you get to choose your best location every time you
play! It's like opening your restaurant in what you perceive to be the best location, but
three other restaurants suddenly open around you, under pricing your meals and taking
your business. Wouldn't you like to just plop down your restaurant somewhere else
tomorrow, and keep the profits keep flowing?

Well, that's almost exactly how it works with poker. If there are better games
elsewhere, you move. You do business at a new location. Sometimes changing seats to
get a positional advantage on an opponent is valuable by itself. In other words, you
might not need to move your poker business clear across town. You might simply
decide to use the storefront next door (an adjoining seat at the poker table).

And since location is the key to your poker profit, you better take advantage of this
amazing opportunity. You'd be surprised how many knowledgeable players fail to use
the concept of location to their advantage.

5.

What matters most?

Here's one of the most important concepts about the business of poker. In poker, it
isn't money you should be thinking about. Money takes care of itself if you play
correctly. What matters most is time.

If you're a fairly good player making two minimum bets per hour, whenever you make
a mistake costing you two bets, that's a whole hour you need to make up. Each time
you play poorly for a session, you might need to invest days undoing the damage.
Think of poker as an exercise in accumulating the most "good" hours possible. Each
time you stray from your best game or spend time in the wrong game, those are hours
wasted.

6.

Treat your regular opponents like business clients.

Treat them nice. They are your customers; they supply your profit. Learn their habits.
Also, keep track of their results, just as many successful businesses keep track of their
customers purchases on a database. They want to know who bought how much, just as
you should want to know who supplied you the most profit.

And who are they - the profit suppliers in poker? They're simply the biggest losers.
Maybe - rarely - there's a particular opponent who is not a big loser that is especially
profitable for you. That's because, maybe you can bluff him or he's intimidated by you
or he furnishes you profit some other way. But usually the biggest losers overall are
also you're best customers, so you should try to identify who they are and play against
them whenever possible.

7.

If you keep a constant, but inadequate, bankroll, you will eventually go broke.

This is an absolute mathematical certainty. And it is the main reason why most skilled,
emotionally stable players fail at their "poker business." Spending pieces of your

accumulating bankroll because a long losing streak seems unlikely is a diagram for
doom.

Most winning players go broke. Wait! Did you hear what I said? I said, most winning
players go broke. Even medium- and big-limit world-class players. The reason is that
they may start with $5,000, win $100,000 in four months, spend $80,000, and lose
back $25,000. Then what? Then they're broke despite having won $80,000. These are
big winners with big problems. Keep an adequate bankroll. - MC