Month 4.5 As a Pro

Everything's humming along pretty nicely. The dreaded huge downswing has not happened, although I did have a couple flat stretches that were kind of annoying. I'm up to playing 12 games at once consistently now, which I like. I'm almost never tempted to browse the web or anything while I play, which I am sometimes when I play fewer tables. I'm sure I lose some ROI (for the non-poker-nerd set, ROI is a measure of profit per sit n go, and a sit n go is a 9-player tournament that takes around 40 minutes), but I think it's still more than made up for by the increased volume.

I felt like it took me a while to really get into multi-tabling - I was playing 2 or 3 tables when other people who I thought of peers were playing 4 or 8 - but now I'm playing more tables than just about anyone at my buy-ins. The way I think of it is that I cannot make the absolute best decisions, but I can make pretty good decisions very quickly. I shouldn't be surprised - whenever I've played chess or scrabble on the internet I've liked the short speed games.

Poker Stars agreed to convert my FPPs to cash for charity. At least for now my plan is to donate the value of all of my points this year to Doctors Without Borders. I'm going to Europe in a couple weeks with my girlfriend, and I could have used a chunk of them to pay for that, but I decided to keep donating them. I'm making much more than I'd hoped when I quit my job, and I feel like I should be donating a lot. It also helps assuage the guilt associated with taking money from people with gambling problems. I've donated around $11k so far this year. My next goal is to convince Stars that they should let other people donate FPPs to charity and then start laying guilt trips around.

Once Stars agreed to let me use FPPs for charity, there was still the issue of how much money they give me for a set amount of FPPs. You can trade 3,000,000 FPPs for a Porche Cayman S, which has a MSRP of close to $60,000. If you divide it out, that's a little over 50 FPPs per $1. There are other items in the FPP store that have a clear cash value, like an entry into a $215 tournament, or a $1000 gift certificate. Almost everything has an implied value of 62 FPPs per $1, but there is one gift certificate that for some reason has a value of 58 FPPs per $1. I initially tried to get the 50 FPPs/$ rate, but thought that was very optimistic. They shot that down pretty quickly, and also my attempt to get 58 FPPs/$, so I wound up with 62 FPPs/$. Oh well.

Right now I'm a bit of an odd hot streak. I've come out ahead on my last 17 sessions (a session being however long I play without stopping, roughly 2-8 hours) in cash terms, not even including the value of the FPPs I've generated. If you look on the graph, it's everything to the right of the orange line (the graph's not totally updated, so if you count dots on the grainy graph you'll only see 14).

So you'd think that I was having an amazing week, but in reality I haven't had any big wins in these 17 sessions, so it's been a good little stretch, but certainly nothing to get excited about. Here's my graph so you can see what I'm talking about:



You can see I had a pretty sweet run from sit n go number 3200 to 3800 (between the blue lines). I'm pretty sure that was my best poker week ever, better than any week from when I was playing big multi-table tournaments (quick glossary for non-poker-nerds: a sit n go, or sng, has 9 players. A multi-table tournament has a lot more, ranging from around 70 up to several thousand. Winning a multi-table tournament is of course worth a lot more money than winning a sit n go).

That's pretty cool, because the whole point of playing multi-table tournaments is to have long stretches where you lose a little bit of money and then finally go really deep in a big tournament and win enough to pay for all of the little losses and have some left over. I got to have the really big score (over the course of a week) without all of the painful gradual bleeding.

A friend of a friend of mine, Becky, wrote an article about me for a journalism class. It's posted below. It was kind of nice to have the chance to ramble and brag without feeling awkward about it - sorta like this blog, only in person, and I didn't feel weird throwing around actual dollar amounts (I edited them out of her story).

Here are results:

In the 41 days since my last update, I have played 1,027 $60 sng's and 1,303 $114 sng's, for an average of 56.9 sng's/day. My average since I started playing Poker Stars exclusively is 57.2 sng's/day. I'm surprised, to be honest. I'm playing more tables than I used to, so I guess that means I'm playing fewer hours. Oh well, I guess that's a pretty good trade-off to make since I started dating Amanda :)

I haven't played any more 225's, so it's been all 60's and 114's. Total Stars stats (since 2/19):

60: 2268 played, 8.8% ROI
114: 2784 played, 13.6%
225: 271, -3.0%

I don't feel like figuring my ROI's for this 41-day stretch, but since they were 9.9% and 13.3% respectively at the time of the last update, it looks like i've slipped somewhat at the 60s and picked up a tiny bit at the 114s. I'm pretty happy with that, given that I'm playing more tables at once than I used to. In a broader sense, I'm happy every day goes by that my results don't come crashing down.

Becky's article (complete with some glaring inaccuracies)

Far from the neon lights and round-the-clock pandemonium of Las Vegas, and in sharp contrast to the smoke-filled, dimly lit rooms that host seedy, back alley card games, the quiet hush and fluorescent lighting of the Math Library at Williams College in Williamstown, Massachusetts, doesn’t seem like an ideal environment for poker game. But on final exam day in Professor Stuart Johnson’s game theory class, the library’s study tables conveniently morphed into rounds of eight – the perfect number for a classic game of Texas Hold ‘em.

At the start of Professor Johnson’s final exam, students received a few poker chips, were assigned a table, and were asked to put to use the theories they had studied over the course of the semester. Unlike the big money awarded to victors at more traditional poker tournaments, the students’ remaining chips on exam day were converted to extra credit points.

“I did really well. It was the only A+ I ever got at Williams,” said Dan Schwab, who graduated from the school in 2002 with a degree in mathematics.

Schwab, who, according to his father, has shown an interest in math since he was two, didn’t put his degree to use in the traditional sense. Four years after graduating from the prestigious institution, Schwab has gone into business for himself – as a professional online poker player.

In recent years, Americans have been the driving force behind a rekindled interest in poker – a popularity fed in large part by the 2003 victory at the World Series of Poker by Chris Moneymaker – who contrary to his surname was not a professional poker champion, but a 27-year-old accountant whose $2.5 million victory inspired amateurs across the country.

The increased prevalence of online gambling encouraged participation from players motivated by Moneymaker’s seemingly overnight success. Web sites provided easy access to the game, and players like Schwab seized the opportunity to try their hand from the comfort of their home.

“Prior to the onset of the online web sites, you had to live near a card room in Las Vegas or Los Angeles, and online poker has expanded the opportunities beyond the casino,” said Ed Miller, editor of Two Plus Two, an online gambling magazine and author of three books including No Limit Hold ‘em: Theory and Practice.

Televised tournaments like the Travel Channel’s World Poker Tour capitalized on the development of new cameras that allowed viewers to see participants’ cards, added the drama of big money, procured talented producers and developed the second major contributing factor in the recent poker boom, according to Miller.

“The producers create characters and edit out the boring stuff – they’ve created a formula for television poker that really works,” said Miller.

For Schwab, the path to a career as a self-employed poker player didn’t occur as quickly as the seemingly overnight boom of the poker fad.

After graduating from Williams in 2002, he continued to dabble in online poker and even picked up a regular card game while on an extended post-graduate vacation in Amsterdam. His primary source of income, however, came from a series of odd jobs ranging from camp counselor to a course instructor for the test preparation company Kaplan.

“The first site I played on was free and I was doing really well there, so I was like, I guess I’ll try the real money. I immediately lost my 50 or 100 dollars,” said Schwab.

After the initial loss, he reverted to lower stakes games where the bets ranged from five cents to two dollars as he continued to sharpen his skills.

Online poker sites offer a variety of games and betting levels. The most popular game is Texas Hold ‘em, the same game featured in the World Series of Poker. In Hold ‘em, each player is dealt two cards. Five cards are placed face up on the table, and players strive to make the best combination of five cards. In its simplest form – the player with the best hand wins. Of course, the development and implementation of strategies like bluffing, betting effectively, and knowing when to fold ‘em are what sets experienced players like Schwab above the rest.

After selecting the type of game, in Schwab’s case Texas Hold ‘em, players can either select a cash table, in which the participants can choose to come and go at any time, taking their remaining chips with them, or tournaments where players pay an entry fee and are eliminated until one participant has all the chips and the pot is distributed to the first, second and third place finishers.

Schwab started playing cash games and eventually mixed in a few tournaments, working to develop the right combination of winnings. In the beginning, according to Schwab, the results were not “job-quitting money.” He was earning one to two dollars per hour.

As he played more tournaments, his return on investment improved and he began to think the results were not a fluke.

“Tournament poker is kind of weird in that it has a little bit of a lottery mentality. Not in that it’s all luck, but in that you have a lot of small losses and then one huge win,” said Schwab.

That huge win, for Schwab, came not from one game but from a combination of victories over the course of one month in which he earned a substantial sum.

“That was enough to make me think I can take the plunge and expect to support myself with tournaments, but if I have a bad run or unexpected expenses – now I have this extra cushion,” said Schwab, who after his successful month resigned himself to quitting his formal employment and earning his living as a poker professional.

“It wasn’t a complete surprise to us,” said his father, Robert Schwab, who knew of his son’s interest in the game. Although he conceded that it wasn’t exactly what he and Dan’s mother had in mind for him.

“I always thought he’d go into the family business and be a college professor,” said the elder Schwab, who is the associate dean of Behavioral and Social Sciences at the University of Maryland.

According to Schwab, his mother, who is also a professor, was additionally reluctant to accept his decision.

“I was definitely gonna do it, and I knew that just based on how my parents were that they would either support me or at least tell me they were supporting me,” said Schwab. “I’m sure they’re still not happy about it, but I know that they’re willing to sort of grit their teeth and say, ‘Good job honey,’ and I appreciate that.”

“He’s always made good decisions. He’s 26, you’ve got to do what you want – to follow your heart, to be trite,” said his father, who admitted that his son’s decision was easier to talk about now, five months after the initial announcement. “Sometimes parents don’t know what is best for their kids.”

After resigning from his more traditional form of employment and setting up his office in the living room of his Somerville apartment, Schwab moved from playing three or four tournaments at once to simultaneously participating in 10 or 11 games, adding a second monitor to his laptop to accommodate the increased activity and installing a back-up internet connection in the event of an outage. Despite his nontraditional occupation, Schwab still looks the part of a classic young professional – clean-shaven and well dressed, but with a classic simplicity.

With the stability of his income dependant on the sustainability of the recent poker craze, the future of the industry is a hot topic for Schwab.

“Once everyone stops being obsessed with poker, the games are going to get a lot harder to beat. The only people left will be people like me. Everyone else will go off and, I don’t know, play lawn darts or something,” said Schwab.

Though poker has long been an American tradition, and according to experts is not going anywhere anytime soon, Schwab relies on the participation of average players motivated by the boom to generate his paycheck. Recognizing the power an icon like World Series champ Moneymaker can wield toward fueling the craze, Schwab speculated on the ideal candidate the he would like to see named champion at the next World Series.

“I was arguing that the best person to win would be a 40-year-old stay-at-home mom,” said Schwab, hoping for a big win by a member of a currently underrepresented demographic.

Schwab claims that the general sentiment among players like him is that the boom is a short-term phenomenon. For now, the same spike in participation that provides him with a lucrative income also holds the potential to fuel addictive behavior. According to experts, the prevalence of gambling addiction has increased with easier access to games provided by the online industry.

“I love to think that I’m playing against people who have money to spare,” said Schwab. “I hate to think that I’m playing against degenerate gamblers.”

Working to find a way to reconcile the moral conflict his source of income creates, Schwab has asked his poker site, www.pokerstars.com, to arrange for a portion of his income to be donated directly to charity.

In addition to the money earned from games, www.pokerstars.com provides its gamers with Frequent Player Points. Participants generate points based on the number of games they play and can redeem the points for merchandise on the company’s web site.

Translating his stored points to a cash value based on the amount of merchandise he could redeem, Schwab estimates his Frequent Player Points to be worth $5,000 – earning the equivalent of an iPod nano approximately every eight hours of play.

Though negotiations with the web site have yet to yield any results, Schwab is hopeful that he will soon be able to turn over his stored earnings to the nonprofit organization Doctors Without Borders.

“I’ll feel glad. I’ll feel like I’m sort of fixing the problem of contributing nothing to society with my job,” said Schwab.

In an email response from the Costa Rican-based www.pokerstars.com, shift supervisor Erick said, “We always try to help our players in anything we could do in order to help charity.”

He went on to say that the points do not have a “real value” and cannot be converted to cash. According to Schwab, the company suggested that he redeem his points for merchandise and donate the products instead.

“A charity doesn’t want a big screen TV,” said Schwab, who is awaiting a response from the site’s management.

In the meantime, Schwab closely monitors issues that potentially threaten the sustainability of the poker fad. Factors such as the legislation regarding the legality of online poker in the United States and the potential creation of computer programs that would be designed to play poker more effectively than humans could possibly end the boom quicker than it started.

Though he admits he has a hard time seeing himself stopping if he doesn’t have to, when he is forced to tender his resignation as an online poker professional, Schwab said he would likely pursue a career as an economics professor – turning in his chips to continue the family business.

“As the boom fades, I’ll see my hourly rate decline, and that’s when I’ll say I have to get a job,” said Schwab.