Doug Polk signed off from his $1.2 million victory against Daniel Negreanu by saying how important it was to bet big on yourself.
One of my most important pieces of advice, always bet big on yourself
— Doug Polk (@DougPolkVids) February 4, 2021
It’s a great sentiment to go out on. Even if you bet on yourself and falter, you learn something from the experience for the next time you bet big on yourself. It’s probably much better to make a big bet on yourself than some other investment or wager that is outside of your control.
With that in mind, there is a big debate around the next great heads-up match and just how much one player is betting on himself. Poker wunderkind Landon Tice is playing Bill Perkins over 20,000 hands of $200/$400 and paying a forfeit of $720,000. Rumours circulated that Tice had sold 90% of his action for this challenge. He didn’t confirm the numbers but did say he has sold a lot of action but was still playing for a massive portion of his net worth.
Let me make something clear that I’m sure everyone cares about regarding my challenge with @bp22
I’m selling a lot of action for it. A lot.
I’m not rolled to battle at nosebleeds.
However, I am putting a very large amount of my relative net worth on myself winning it.
— Landon (@LandonTice) February 11, 2021
Who suffers the consequences of failure?
Why is this causing so much debate? Lots of reasons, but this does remind me of perhaps my favourite book of all time, Skin in the Game by Nassim Taleb. To do the book a huge injustice by summarising it, the author argues we should only really trust advice, ideas, people or organisations that suffer the consequences of being wrong. A tenured professor can be utterly terrible and still keep their job, but a small business owner will likely go out of business if they don’t offer a good service. If you enjoy the upside then it should be you who suffers any downside.
Some of the criticism about Tice is that he doesn’t have much skin in the game for this challenge. If the 10% figure is true, somebody else is shouldering 90% of the risk. If Tice loses motivation halfway through the challenge he might stop taking the match seriously and start playing poorly. His backers would suffer the bulk of the consequences if that happened.
This is a common problem with staking deals. If a player is heavily in makeup they often start gambling to try and get out of it. You’ll see them punt off their money at final tables when they have to win it to get out of makeup. You also see this when somebody sells a big percentage of themselves at a high markup. If somebody sells 90% of themselves at 2.0 they have essentially been paid to play and are freerolling the event itself.
It’s also just useful to know when your opponents are not playing for 100% of themselves. A professional poker player in the Main Event might have sold 40% of their action and as such probably cannot be easily pushed around, a player in makeup playing for 10% of himself is probably going to gamble against you and the satellite qualifier playing for 100% of themselves in a bucket list event can likely be exploited near the bubble.
We need the stick as well as the carrot
We all need the carrot to motivate us, but we also need the stick. This is why poker players in particular will introduce a forfeit for themselves to try and achieve a goal. For every poker player who books a weight loss prop bet trying to make money, there is another one using the threat of losing money as a way to scare themselves into being disciplined.
None of this means that Tice does not have skin in the game for his challenge, which I think a lot of people are missing. He has already stated that a big percentage of his personal net worth is still on the line, even it is a small percentage of that being wagered. He may not be shouldering the brunt of the risk, but losing may hurt him more than his backers.
There is also at least a small amount of reputational skin in the game. Tice has quickly garnered a reputation as a young poker prodigy, the ‘next big thing’ in the game. Something he clearly is enjoying. It also seems clear that he is using this challenge as a springboard into becoming an even bigger name in poker. He really doesn’t want to lose such a high profile match to a recreational player.
So I think Tice has plenty of skin in the game for this challenge, but it does serve as a good reminder for those of you out there that you want your motivation and incentives to align with the people you work alongside. That includes sharing the burdens that come with them.
Is it a good idea to play for as little as 10% of yourself? Let us know in the comments: