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Thursday, June 21, 2018
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Vin Narayanan

Vin Narayanan is the former managing editor at Casino City and has been involved in the gaming industry for over a decade Vin is currently based in Hong Kong, where he runs his own consultant group and works as head of gaming and public relations for Mega Digital Entertainment Group.

Before joining Casino City, Vin covered (not all at the same time) sports, politics and elections, wars, technology, celebrities and the Census for, USA WEEKEND and CNN.

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Billionaire businessmen handle risk just fine at WSOP Big One for One Drop

LAS VEGAS -- The best poker players in the world are professional risk takers. They risk their own money on high-variance outcomes and usually walk away winners.

The reason top poker players consistently win is their ability to evaluate risk, and determine when to gamble and when to fold. Everything that poker players look at -- pot odds, implied odds, bet sizes, tells -- gives them the information they need to assess their risk.

In the $1 million Big One for One Drop tournament at the World Series of Poker, professional poker players ran into another group of risk takers, the billionaire businessmen.

People like David Einhorn, the hedge fund manager who is the founder and president of Greenlight Capital, Cirque de Soleil founder Guy Laliberte, MGM executive Bobby Baldwin and Richard Yong, who has made a ton of money in data mining and IT-related fields, entered poker's richest tournament, and fared quite well.

David Einhorn is donating the nearly $4.4 million he won at the Big One for One Drop tournament to the City Year Foundation.

David Einhorn is donating the nearly $4.4 million he won at the Big One for One Drop tournament to the City Year Foundation. (photo by Vin Narayanan, Casino City)

In all, 20 rich businessmen tried their luck against 28 pros. Poker pro Antonio Esfandiari won the tournament, and the $18.3 million first prize. Another pro, Sam Trickett finished second and won $10.1 million. But four billionaire businessmen finished in the top nine. Einhorn finished third and won almost $4.4 million.

Why did the businessmen do so well against the poker pros? Because they understood how to manage risk.

Their risk management came in several forms. First, and most importantly, they weren't scared money.

Most of the poker pros in the tournament didn't have enough money to enter the tournament on their own. They had to find backers and investors to help fund their buy-in for a percentage of the winnings.

Phil Hellmuth, who has won a record 12 World Series of Poker titles, acknowledged on Twitter that after paying off his investors, he would only take home 15 percent of the $2.6 million he won for finishing in fourth place.

But for the billionaire businessmen, $1 million is chump change. It's playing around money. They're not going to miss it, and they know it.

"I only play poker for fun, so there's no risk," Yong said after he won $1.2 million for finishing in eighth place.

Baldwin noted that because the money didn't mean much to the businessmen, they had an advantage over the poker pros.

"I think the businessmen were quite comfortable and a lot of the pros were not," Baldwin said after finishing seventh and winning $1.4 million. "The stakes were higher than [the pros] were used to and the field was tougher than [the pros] were used to."

"Of course people that have a lot of money are very comfortable sitting behind a million dollars' worth of chips," Baldwin added.

While not being scared money helped the businessmen compete with the pros, what evened the playing field for them was their approach to managing risk.

"My business is investing," Einhorn said. "And there's a lot of similarity between what you're doing in investing and in poker.

"There's some information you know, there's some information you surmise, and then there's the future which is the unknown information and you have a range of possible outcomes. If you think about a poker hand that way, you have your cards, you have what you can surmise about whatever your opponents might have and then you have whatever cards might come on the board that are uncertain. So there's a range, and you're calculating through those three pieces of information.

"And when you invest, it's really the same. There are the things you know about a company or the world or whatnot, and there are things that you surmise -- you don't know, but you kind of assume --and then there's the future, which is the range of possible events in the future. And then you think about how do those three things put together affect an investment, which isn't all that different from how something might affect a poker hand."

The success of the billionaire businessmen in this tournament wasn't entirely unexpected by the poker pros.

"I never underestimate the billionaires," Hellmuth said after his elimination. "I play with billionaires in my home game and these guys have a way of showing up with a hand when the money is in there big.

"These billionaires are some of the smartest people on the planet, and they’re going to figure out a way -- their own way -- to play the game. So it didn’t surprise me," Hellmuth added.

What Hellmuth calls smart is actually good risk assessment. And that's something poker pros and billionaire businessmen have in common.

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