FREAK-est Links

1. Does having a strip club in your neighborhood increase crime rates?

2. Did a poorly designed skyscraper melt a car with its reflection?

3. A paper that crowdsources black-market drug prices.

4. How techies process census data.

Germany Agrees that Poker Is a Game of Skill

A German court has ruled that poker is a game of skill, as Levitt has argued before (and which a U.S. court has recently confirmed).  The ruling is in response to poker player Eduard Scharf's claims that his poker winnings shouldn't be taxed because poker is a game of chance, and "anyone can win a game of poker."  The court disagreed, ruling that "[H]e had to pay income tax on his winnings saying they counted as commercial income as they were linked to his personal skills." (HT: Sven Seuken)

Why Online Poker Should Be Legal (Ep. 93)

In our latest Freakonomics Radio podcast, Steve Levitt visits with Marketplace's Kai Ryssdal to discuss his poker research and his personal poker history. The episode is called "Why Online Poker Should Be Legal." You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.

In case you haven't been following the long-running legal story, here's the gist. Online poker was growing fast in the U.S. until Congress passed the Unlawful Internet Gambling Enforcement Act of 2006, which pretty much shut things down. The ruling was based in large part on the government's reasoning that poker is predominantly a game of chance as opposed to a game of skill.  But is this classification correct?

Levitt's Poker Paper: It's a Game of Skill

Steve Levitt has a new working paper: "The Role of Skill Versus Luck in Poker: Evidence from the World Series of Poker," with University of Chicago colleague Thomas J. Miles.

Using data from the 2010 World Series of Poker, Levitt and Miles found that high-skilled players earned an average return on investment of over 30 percent, whereas all other players averaged a 15 percent loss. This finding has serious implications on the legality of online poker, as that debate is heavily dependent on whether the game is based on skill or luck.

The “Daughter Test” of Government Prohibitions (And Why I'm so Angry About the U.S. Internet Poker Crackdown)

I was outraged a few weeks back when the U.S. government cracked down on internet poker. It took me a while to figure out why.

One of the most important roles of government is establishing a set of rules under which society will operate. Governments determine property rights and coordinate the provision of public goods. Some frowned upon activities are deemed illegal (e.g. homicide); other favored activities are encouraged through subsidies (e.g. home ownership, education).

When Is a Poker Face Not a Poker Face?

"[T]he best 'poker face' for bluffing may not be a neutral face, but rather a face that contains emotional correlates of trustworthiness."

Overreacting to a Computer Beating Poker Pros

Newspapers trumpeted a landmark event last week: a computer program beating professional poker players head-to-head at Limit Hold-Em. Parallels have been drawn to Big Blue‘s victory over Gary Kasparov roughly a decade ago. Those parallels are not very meaningful. First, heads-up Limit Hold-Em is a very simple version of poker — exactly the kind of […]

The “Ladies” Event at the World Series of Poker

Many people know about the World Series of Poker from the television coverage on ESPN. Mostly they just show the “Main Event” on TV. Hoa Nguyen from The main event has a $10,000 buy-in and lasts for two weeks. Leading up to the main event, there are dozens of other tournaments, some of which […]

Phil Gordon Answers Your Poker Questions

We recently solicited your questions for poker man Phil Gordon. In his answers below, he discusses (among other things) variance, sunglasses, and why he’s not a gambler by nature, but rather “a strategic investor.” This is a really good and smart Q&A (although he did neglect to mention a certain beat-down he once suffered). Thanks […]

A Not So Romantic Valentine’s Day

As a Valentine’s Day present to my wife, Jeannette, I flew her to romantic Council Bluffs, Iowa, and bought her an entry into the High-Heeled Poker Tour event being played there over the weekend. These are women-only events, with the winner taking home the coveted “high-heel” necklace. Just so she understood that this truly was […]