Monday, January 04, 2010

My Job As a $500+ NL Prop So Far

It's been a little over three months since my "promotion," and I think taking the position was a good decision. One of the main things I was worried about was the massive egos I would have to deal with. Indeed, this has been a bit of a problem at times. The most ridiculous example is "Corporation" Mike (who supposedly owns the corporation that acts as the "house" in the table games, because it is illegal for the casino to do this on its own in Los Angeles), but there are several other examples. Sometimes they manage to get to me, but I just say very little to them and eventually they stop bothering me. Another thing about I was worried about, of course, was how well I would do in the game financially. As it turns out, I've done very well (perhaps my NLHE:TAP analyses have helped a bit), but my volatility has gotten a little out of control.

For various reasons, I've resisted revealing most of my poker results here in the blog. However, I want to make an exception because the increase in both my win rate and (especially) my volatility is quite remarkable. The sample size is not particularly large considering the huge variance inherent in poker results, but you can make of it what you will.

From my promotion through December 31, I played about 450 hours of poker, including 357 at the $500+ NL holdem game. My win rate and my variance in this NL game are both approximately twice what they were previously. Specifically, in those 357 hours I have won about $60/hour, but my hourly standard deviation is about $630/hour. For a whole day of playing for eight hours, this works out to $480 +/- $1780. This means that it's not at all unusual for me to lose over $1500 in a day or win over $2500. When I took the job, I was expecting something more in the range of $20/hour and $300/hour ($160+/- $850). In all, the experience has been quite a lot more stressful (between the egos and the swings), but I can't complain given my results and the pay bump.

Another interesting statistical question is: what is a 95% confidence interval of my "true" win rate? Yes, I have a win rate calculated from my results, but what can I expect my win rate to be in the future? This is complicated by the fact that I also don't know what my variance will be in the future, but let's just assume my variance stays at $630/hour. Then, if I am doing this correctly, I can say with 95% confidence that my true win rate is $60 +/- $65 per hour. This is a very big range, so I shouldn't get too excited! My guess is that my "true" win rate is somewhere around $30/hour.


Craig Berger said...

Is there a point at which the amount the Bike is actually paying you to play is such a small percentage of your overall win rate that its not worth it to prop anymore? That is, at this level, can your poker playing "freedom" be worth more than your prop rate? Or is there a way in which the prop job gives you an "excuse" to play and succeed in a game which you wouldn't normally try?

pinkerton said...

I'd wager the math even at these levels doesn't work out to anywhere near a small percentage.

$60/hr for 357 hours is ~21,500... Technically that's only nine 40 hour weeks (2 months), but iirc it was over a three month duration. I don't know what your hourly wage is, but basing it off this admittedly outdated article:

Factoring your winnings at $60/hr and using conservative estimates from that article, your prop compensation alone would factor in to be about 1/3 of your total income... not to mention medical, sick time, vacation, should all be considered in benefits of having a *cough* real job ;). If your estimated 'true' rate is more accurate, the prop income would then be 1/2 or more of your total income.

I'd definitely be interested in some generalized ratio numbers so as not to reveal too much personal information about your finances...

I've been a fan of this blog for some time, think this is the first time I've posted. Thanks and keep up the good work.

Angelina said...

Hi there,
You have a good blog on poker. Can you please send me your contact information (I couldn't find on your blog)
Thanks, Lina.

Keith said...

Craig - I'm sure there is a point at which my wages would be overwhelmed by my win rate, but I'm not approaching that point. Pinkerton's approximations and the article he links to are pretty accurate. Also, I'm not sure if I've mentioned it before, but I do think I'm well-suited for propping because I find it helpful to have an "excuse" to play, as you said. Also, while having "freedom" is valuable in that you have game selection, which certainly helps, I think there is something to be said for not having game-selection: it removes any distraction or doubt about whether I'm making the best game-selection decisions, and allows me to focus on playing optimally. It also forces me to stay at the casino for 8 hours, whereas I used to play only 2-7 hours because I would just leave it the games weren't great or if I wasn't feeling great.

Pinkerton - Thanks for stopping by and leaving a comment. I read that article, and it seems quite accurate (and revealing). It's always fun to learn I've got more readers lurking than I had realized!

Angelina - Your post looks suspiciously like the spam I normally just erase, but, if so, it's done a much better than normal.

Anonymous said...

Introductory statistics textbooks sometimes talk about "publication bias". The idea is that, if 100 studies are done on whether a certain food causes cancer, then you'd expect about 5 of them to find a statistically significant correlation, but the other 95 probably won't get published, so if you look in the literature it might look like the food is more harmful than it really is.

I could be wrong, but there seems to be something like that going on with poker results. There is very little to be read on what kind of results should be considered "good", and what I've seen usually is similar to this post, in that the results look good but are only on the borderline of statistical significance. It is amazing how often I've seen that, and it was true of my own results. At my peak win rate, my results were right on the borderline of statistical significance. Then I started losing and pretty much quit when things stopped looking at all exciting. I forget where else I read it but there were a few other blogs I think where people talked about their win rates, and every time when you calculated the 95% confidence interval, the upper end was almost exactly on their win rate. It's either some weird coincidence, or some kind of publication bias thing going on.

By the way, if you want your win rate to improve, the easiest way is to do what most poker players do and only count your wins. Just attribute your losses to days when you weren't trying your hardest, or flukes.

Good luck!

Craig Berger said...

Wow, I just became a much better poker player! I may even turn pro! Thanks Rick!

Keith said...

Rick -

I agree that such a "publication bias" exists in scientific literature, but I think it's unfair to apply it to my post. I'm not trying to prove anything with this data, I just posted it because I thought it might be interesting to my readers. I don't consider these results very representative of my overall results. Indeed, the fact my recent results were exceptional is part of what I thought made them interesting.

If you take issue with my attempt to put a confidence interval on my results, that's fair, but I only meant that as a fun investigation. I noted in my post that there is a small sample size, so you should "make of it what you will," by which I meant: don't read too much into it.

As for why you only read about confidence intervals that border on win rates, it's probably just that it's more interesting. I suppose could count as a publication bias, but I don't see how this could be misleading unless you are reading too much into the authors' claims.

Anonymous said...

Yeah I didn't at all mean that you were lying or exaggerating or trying to be misleading or anything. I just thought it was a weird coincidence, that's all.