Juice
4 min readNov 13, 2022

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On The Evolution Of Poker and a Psychological Theory of Cheaters

I have never perfectly understood the concept referred to here but I’ll try to give my understanding of it. Timex (Mike McDonald) a(n ex?) pro poker player is pointing to a post by Sam Bankman-Fried.

Sam is the center of a scheme that is unraveling at present time which already has his wealth reported to have run down from 16 billion to under 1 billion overnight.

It seems to be some sort of a massive event unfolding which is showing that Sam and different shadow or sister companies had a gameable edge in the financial system.

What Timex is pointing out is Sam talking about a concept of gambling whereby most people weigh gambling opportunities differently depending on whether there is the possibility of wining or losing a LIFE CHANGING amount of money.

Sam is exhibiting a reckless type of a behavior or strategy, or trying to express his approval of one, and Timex is showing this is ironic.

Of course it is in hindsight we can see this or suspect it is relevant but I do find it interesting to see a community in shock and not able to draw guilty conclusions about Sam before the unraveling of the loss.

Here I think we should be cautioned not to be fooled by the obvious admission of the ‘altruistic go big or go home’ utility function as an admission of non-standard tendencies but rather see this admission as a symptom that the host, Sam, has himself somehow lost proper concept of utility.

Or put another way, he is acting as if he is malfunctioning with regard to the assumptions of game theory. And in fact he has no reason to consider a proper utility function because, as social media and news is reporting, he was functioning above and beyond the rules of the game.

Thus the admission, being shockingly damning, is a symptom of the psychological disease that results from a skewed utility function. It’s a subtle point.

A Note About Trusted Third Parties

Nick Szabo often thought to be the creator of Bitcoin warns that Trusted Third Parties as outsourced solutions to problems imply the possibility for security holes and should be removed if possible.

In poker it has evolved that the shuffling, the dealing, the money holding and exchanging, the rules, and the general security of the game are entrusted to a third party.

It is because of the need for security that this custom and institution of casino and casino chips arose. But in another extreme sense this evolution has in and of itself created and forced the possibility at least for a security hole.

In some senses the more ‘secure’ a casino security practice must be the more difficulty it must be for the player to have oversight on the securer (there is a subtle point here because a 3rd party can be hired to audit the security provider and perhaps a government as a 3rd party to oversee that 3rd party). We have examples of Ultimate bet poker as well as Full Tilt poker where on the former the live hole cards of the players were revealed in a god mode form for one of the allegedly rogue employees and with Full Tilt poker it is alleged that the owners were spending players deposits that were supposed to be held in trust while players would otherwise play poker with digital chips and balances.

To that point there is also the evolution of Poker Stars which now legally must seek profits for its shareholders which then might not work to serve the long term benefits of the general poker player. This is because poker was seen as the last remain skilled casino games and Poker Stars has the choice of offering either skilled variants of it or non-skilled variants depending on the game variants offered and the fees charged.

Here we can think of the famous saying by lord Acton, “Power tends to corrupt, and absolute power corrupts absolutely.”

From a game theory perspective it makes sense that a player would become ‘corrupt’ when they are handed god mode view in that they are really just playing with the same properly functioning utility function but now have god level information. It is a nuanced point but it means that they really can’t see outside their own scenario of power. Not from the same view that someone without their power could.

Its as if their utility function has malfunctioned. So admission of this malfunction that we describe perhaps as bold or brazen is really part of the malfunction and we should be able to see other more subtle clues but clues that are quite definitive or definitive enough to provide reasonable suspicion to reasonable people.

I think Daniel Negreuanaus behavior is suspect in this regard. I think he acts as if he is a magician with cards and poker and after reading his book on small ball poker and listening to him talk about it I am convinced he doesn’t understand poker.

So how does someone that doesn’t understand poker constantly hand read people? How does someone constantly hand read people down to their hand in poker anyways? Thats not part of the game. Thats not how poker works. Thats not your goal! It makes not sense.

Daniel acts as if, if he ever got caught cheating, he would explain that he was good for the game all along anyways. He ACTS as if he can see hole cards.

Daniel’s utility function is malfunctioned. This leads me to believe that the evolution of the casino has lead to rampant cheating in the industry over the years.

I won’t explain it here but I have a suggestion of how and why it will be proved by the players as they grow to understand the game better.

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