Steven Levitt and Thomas Miles, economists at the University of Chicago (though Levitt is far better known in lay circles for his pop-economics sensation Freakonomics) have a new paper published with the National Bureau of Economic Research arguing that poker is a game of skill. The seemingly superficial research could have substantial legal effects in the United States where online gambling on games of luck is illegal but gambling on games of skill is legal. Levitt and Miles looked at the World Series of Poker and found that players rated as highly skilled averaged a return of +30% while the others averaged a return of -15%. That, clearly significant, difference is comparable to traditionally recognized games of skill; it is a larger return on skill than would be expected for professional asset managers in financial markets. And while the higher skilled player beats the lower skilled player only 54.9% of the time, the paper's authors point out that is comparable to the 55.7% of the time that playoff teams beat non-playoff teams in next year's Major League Baseball season.



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