November 27, 2021

Scarne on Cards

I'm not sure why my parents bought me a card book written by a gambling maven with connections to the mob, but the 70s were crazy times.

I still own the book. You can buy a used copy here. The writing style is not terribly different than that of Don Libey, for those of you who remember Mr. Libey. That statement alone should indicate to you what you (the reader) gets by reading the book.

I still vividly remember a key lesson taught in the book. The author spoke of the cut the house gets in poker (and honestly, in any game). The author described a situation (paraphrased here) where five players are sitting at a table with $100 each, and at the end of a hand the house gets a "rake" ... say 4%. In other words, the players bet, and at the end of the hand the pot is $50 so the house gets $50*0.04 = $2.

Pretend you play 100 hands.

100 hands times $2 per hand = $200 that goes to the house.

In other words, the five players start with $500 total ($100 each) and at the end of 100 hands the house gets $200 and the players are left with $300, divided five ways, about $60 each. Each player is down $40 from the start of the game.

The author described that the only way for the player to solve the problem was two-fold.

  1. Recruit new talent - bring new money into the game.
  2. Recruit talent with lesser skills.
Why am I bringing this topic up?

Well, modern marketing is all about "the house". Somebody controls the market, and for you to play in the market you have to pay the house a "rake".

More on the topic tomorrow.

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