May 2016

WSOP Tax Tips for Non-American Players

WSOP Tax Tips for Non-American Players

By: Paul Hewson
 
If you've been following the World Series of Poker for a while, you may have noticed that the vast majority of players are from the United States. That makes sense; the WSOP is based in Las Vegas, after all. But this is the World Series we're talking about here. It could use some more international flavour. Of the 1,245 bracelets handed out over the years, 979 went to American players. Canada is in second place with 52 bracelets.

Again, perfectly understandable – the US has 10 times as many people as Canada. But there are other reasons for this global disparity, many of them having to do with taxes. If you're a non-American who's thinking about playing at this year's World Series, here are three tips to help you navigate the waters and make your experience as smooth as possible.
 
1.Understand Your Country's Tax Policy
Different countries have different approaches when it comes to taxing poker players. The United Kingdom, France and Italy don't even bother. Canada and Australia only tax players who are “carrying on a business of gambling,” which has to be proven first and doesn't automatically kick in at a set income threshold. If you're from Norway (like 2014 Main Event runner-up Felix Stephensen) or Denmark (like 2008 champ Peter Eastgate), be prepared to pay up, big-time.
 
2. Understand Your Country's Tax Treaty With the US
If you win $5,000 or more playing at the WSOP (or at any of the casinos in Vegas), you might find yourself about 30% short when you get paid. That's the amount that gets withheld at the Rio for taxes. Many countries have tax treaties with the US to avoid double-taxation, but that 30% will still get taken off the top – you have to apply for a refund. Unless you're from a list of countries including most of Europe, and Japan. Get an Individual Taxpayer Identification Number (ITIN) if you don't have one already. The Rio can issue one to you, as well.
 
3. Know Your Stakers
If you've been staked to play at the WSOP, that adds another layer of complexity to your tax situation. You'll need to provide certain tax forms to your backers – get these filled out and returned to you before you pay anyone back. You'll need different forms depending on whether your backers are American or not. If they're from outside of the US, you'll also need to include your ITIN and explain on the forms why no taxes are being withheld. Among other things. Do your research, consult the tax experts where required, and good luck at the tables

Mad Monday Tournaments

Mad Monday Tournaments

On Monday, May 30 only, we’re offering 13 additional tournaments and an extra $350,000 in guaranteed prizing.  To get in on the extra action, play your way into a Mad Monday tournament with our qualifiers now for as little as $0.77. If you’d prefer to buy in to a tournament directly, you can buy in now for anywhere between $3.30 and $270.  
 
These special added tournaments will be running from 1:18 PM ET through to 11:18 PM ET on May 30, providing plenty of opportunities for you to cash in throughout the day. For more details, check out our schedule and look for the Mad Monday tournaments listed under the “Special” tab in the Bovada Poker software. Mark down the date in your calendar and get ready to seize the day on Mad Monday for your share of an extra $350,000.

Slightly Advanced Bankroll Management: The Kelly Criterion

Slightly Advanced Bankroll Management: The Kelly Criterion

By: Paul Hewson
 
Big hand, big bet. Small hand, small bet. You may have heard this poker maxim before, and it's a good rule of thumb. But there's something larger behind those words, something that applies to every investment you'll ever make. In 1956, a scientist with Bell Labs named John Larry Kelly, Jr. came up with a formula to determine how much you should risk when expecting a certain rate of return. That formula is now known as the Kelly criterion. Warren Buffett uses it. So can you.
 
Kelly Green

Let's take a moment to look at the formula itself – but just a moment. No need to get bogged down by math; we'll explain how you can use the Kelly criterion after.

f*=(p[b+1]-1)/b

Here's what all those letters mean:

f*: the fraction of your bankroll you should risk
p: the probability you'll win
b: the odds you're getting

Pretty simple, really. The bigger your chances of winning (p), the larger fraction of your bankroll you should bet to maximize your return. Same thing applies when your potential payout (b) is higher. The Kelly criterion helps you pin down how big those bets should be. It's not rocket science.
 
Buying In

So how do we use this in poker? Unless you've got a supercomputer for a brain, you're not going to do the math in the middle of a hand – and maybe you shouldn't, anyway. Bankroll management is where you can best apply the Kelly criterion. This is something you do away from the table, in your own time, and it's one of the most important factors in your overall poker success.

Since this is poker and not sports betting, we don't have a specific b and p to work with. But let's say you're a tournament player, and you've already figured out both your ROI (Return On Investment) and how often you're ITM (In The Money). Here's one way the Kelly criterion formula looks with those variables instead:

f*=(ROIxITM)/(ROI+1-ITM)

Again, pretty simple. No calculus required, just plug in your numbers, and you can figure out how much of your bankroll you can risk on any one tournament. Let's say you're getting a 20% ROI, and you're ITM 15% of the time. Do the math:

f*=(0.20x0.15)/(0.20+1-0.15)
f*=0.03/1.05
f*=0.02857

There you have it. If you've got a $1000 bankroll, and you've got the aforementioned ROI and ITM numbers, you're good to play a $28 buy-in tournament (rake included). Don't worry too much about getting things down to the fourth decimal point; you're already estimating your ROI as it is. Use the Kelly criterion to get a general idea of how big you can play, then adjust as your bankroll goes up and down – and as your poker game improves.

Super/System Is Still Worth Reading

Super/System Is Still Worth Reading

By: Paul Hewson
 
Like a lot of players, the first poker book I ever read was Doyle Brunson's Super/System. It's one of the smartest things I've ever done. But this book was published way back in the dark ages of 1979. Poker strategy has advanced in leaps and bounds since then. I often get asked whether it's still worth it to read Super/System, or even the excellent 2004 sequel, Super System 2. As you many have already guessed, my answer is a hearty “Yes.”

With a caveat. If you're brand-new to poker, consider saving it for later, once you've got your basic fundamentals down pat. The language in Super/System is a bit archaic, and you might find yourself getting a bit confused at the beginning. Otherwise, heck yes. It is absolutely worth your while to find out how players like Brunson and his counterparts were thinking at the table – and away from the table. And you might still learn a thing or two about poker.
 
Your Inner Donkey

Aside from the language barrier (don't worry, it's not as difficult as reading Shakespeare), the main problem with the Super/System strategy is that it was built at a time when most poker players were very bad compared to today. Brunson would raise opponents relentlessly and keep raising; back then, most players folded way too often. Today, you'd be instantly tagged as a “donkey” for playing so aggressively.

That's if you're playing against competent opponents. Obviously, Brunson tailored his strategy over the years to account for the improved level of play. But the fundamentals of “power poker” still apply if your opponents are passive. You might be overly passive yourself, in which case, maybe you should spend some time finding your inner donkey. Get into some microstakes cash games or some freerolls – or even play money games – and get comfortable 3-betting people with stuff like King-Three suited. It's good for you.
 
The Numbers

Here's the other thing about Super/System: Most of the advancements that have been made in poker have been in no-limit Hold'em, the game Brunson helped popularize. Far less work has been done figuring out the best strategies for games like Stud and Omaha Hi/Lo. Brunson arranged to have his contemporaries write separate chapters about these games, and much of that information remains valuable today.

On top of all that, Mike Caro wrote a lot about tells in Super/System. Caro is a poker genius in his own right, and well worth paying attention to. Even if you don't play live poker, Caro also provided some useful poker statistics that you should learn, and he put those statistics into context so you can understand them. Get these books, read a little at a time, and you might be surprised how often that light bulb turns on for you.

Three Subjects to Take for a Beautiful Poker Mind

By: Paul Hewson
 
So you're at university right now, or you're about to enter those hallowed halls of learning for the first time. Well done on taking the steps to pursue an education. It's not easy. But that's why it's called higher education. Not everybody has the drive and mental capacity to succeed at academics.

Or poker, for that matter. If you happen to be taking your major in any of the following three disciplines, you're also furthering your poker education, even if you don't realize it. If your major is in a different field, no sweat – that's what electives are for. Maybe your school even has a poker course like MIT, but even if it doesn't, dabbling in these subjects will get you on the right track.
 
Math

Still with me? Good. People often say that math is their least favourite subject, but maybe they'd think differently if they were using it to get better at poker. Even some basic arithmetic will help you calculate pot odds quickly. If you have the brain and the stomach for it, consider taking some classes in statistics. Then put on your thinking cap and go for the big kahuna: game theory. John von Neumann (with Oskar Morgenstern) used poker hands for examples when he first published “Theory of Games and Economic Behavior” in 1944.
 
Psychology

If math is the bread-and-butter of an advanced poker player, psychology is the driving force that makes you want to eat in the first place. Understanding why people (including yourself) do what they do at the poker table will help you take advantage of your opponents while minimizing your own mistakes. You'll be able to more accurately categorize them as loose-passive or tight-aggressive, and predict their actions before they even know themselves what they're about to do.
 
Engineering

Phil Laak has a degree in mechanical engineering and Andy Bloch, who was part of the infamous MIT blackjack team, has two of them. If you can wrap your head around things like human-computer interaction and nondeterminism, you should be able to figure out poker well enough to become profitable. Or you could spend that time playing beer pong instead. It's all good.

Smart Drugs for Poker: Consult Your Physician

By: Paul Hewson
 
You're probably on drugs right now. It could be caffeine, or Xanax, or Anchor Steam, but it's in your system. Maybe you take something specifically to help you play poker. Or maybe you're thinking about it, but you're not sure it's the right thing to do and you're looking for some guidance. You've come to the right place, and here it is: Consult your doctor.

Seriously. Only your doctor is in a position to tell you what you should take – and to prescribe it to you, if it's something you can't get over the counter or in your grocery aisle. But I am in a position to inform you about what other people are taking. Here are three things in particular you should investigate thoroughly and think very hard about before you even consider using them.
 
ADHD Drugs (Adderall, Ritalin, et al)

These are the big ones. They've been prescribed to millions of schoolchildren over the past few decades; whether or not all those children really have ADHD or a similar cognitive deficit is up for debate. Baseball players and other athletes who used to pop greenies before games are now getting suspended for using Adderall. It's the same stuff, basically. Will it help you play better poker? Yes and no; these drugs can help you focus and put in more volume at the tables, but studies have shown they can also impede divergent thinking – the ability to see multiple potential outcomes, like what might happen if you 3-bet this guy.
 
Beta Blockers

In a way, these are the opposite of ADHD drugs. They limit your body's ability to absorb and use adrenaline (and noradrenaline), thus calming you down. Beta blockers have become increasingly popular among performers who have to audition for gigs, like actors and concert violinists. They can also have potent side effects, like sleep disturbance, hair loss, and erectile dysfunction. This is why I don't do auditions.
 
Marijuana

Weed is arguably the most popular drug in poker – not including booze, of course. There are many positives and negatives when it comes to the sticky-icky, not the least of which is its legality in your neck of the woods. Again, you'll have to consult your doctor. Your actual doctor, not the guy around the corner who'll rubber-stamp your medicinal marijuana certificate. In theory, if you can limit your intake to one small hit or two, you can get some cognitive benefit from weed. But it's like that Steve Martin joke: You'll only take it in the late evening, or occasionally in the early evening, or the mid-evening, or maybe the early afternoon...

Yes, You Should Fold Aces Sometimes

bovada-poker-pocket-aces

By: Paul Hewson

You're sitting at the poker table playing no-limit Hold'em. Here come your cards: two shiny black Aces. Bullets. Pocket Rockets. It's the best possible starting hand in the game, and you fold without giving it a second thought. Wait, what? You folded Aces preflop?

Yes, and it was absolutely the right thing to do. That's because you're playing in a satellite tournament, and you already have more than enough chips to make it past the bubble. Context is everything in poker; if you had played those pocket Aces, you would have risked losing chips and maybe getting bounced from the tournament – and for what? Just because they were Aces?
 
Bad Beats, Bad Beats

Folding is one of the biggest challenges poker players face. This is a game, after all, and when you fold, it feels like you're choosing not to play. If feels even worse when you fold what looks like a premium holding. But that's poker. Folding is part of the game, just like betting and calling and raising. If the situation dictates, you should be willing and prepared to fold any two cards.

Remember, pocket Aces are not invincible. Just ask Conor Drinan; he famously had his Aces cracked by Cary Katz' Aces at the 2014 World Series of Poker Big One for One Drop. There was only a 2% chance of that happening once they went to showdown, but the board ran out with four hearts, and Katz had the Ace of Hearts in his hand. Or ask Matt Affleck, who had his Aces cracked by Jonathan Duhamel's pocket Jacks at the 2010 WSOP Main Event. Duhamel went on to win the tournament for a cool $8.9 million.
 
Regicide Is Painless

Of course, if you're not playing in a satellite, then there's not much reason to fold Aces preflop. But what about Pocket Kings? This is another hand that beginners are taught never to fold, but in theory, it can make sense to fold KK, even in a regular cash game. Let's say you're playing 6-max NLHE, 100bb deep. The lojack (under the gun) raises, and you're in the hijack (middle position) with KK, so you 3-bet. Everyone else folds. The lojack 4-bets. You 5-bet small, and the lojack jams all-in.

Believe it or not, this could be a good spot to fold and save yourself the last 50bb or so in your stack. What cards would the lojack be shoving with here? Perhaps Aces, Kings, Queens, and Ace-King suited, if they're solid enough. Against that range, your Pocket Kings are about a coin-flip, so sure, go ahead and call. But what if you know your opponent is tight? If they're only shoving Aces and Kings in this spot, you'd better fold, because your KK only has about 23% equity. Do the right thing, even if it hurts. The consequences of doing the wrong thing are much, much worse.
 
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