CardSharp

I was listening to the local country station today, and they happened to play a Toby Keith song where he’s discussing his semi-pro football career. The lyrics go

Semi-pro always means semi-paid

Which got me to thinking about the economics of athletics in comparison to poker. Consider football – the odds of going pro there are surprisingly dismal. Perhaps 1 in 10 high school players who want to play in college do so. Of those who make that jump, perhaps 1 in 50 of those who want to go on to the pros make it, That means perhaps 0.2% of those who start down the pro football road ever see their first pay day. And a good percentage of those never see much money in the NFL – a few years of practice squad and league minimum is the most likely result. A few more find some money in the Canadian or European or other smaller leagues. But overall, not a cheery prospect.

It should be obvious why this is the case – playing football is entertaining to do (at least most of the time), and creates little real value. And almost anyone can do it, at least to some small extent. This means it’s a popular career with a low barrier to entrance, and that always drives down pay.  It’s like being in a rock band or being an actor. All such careers have a very backloaded payout curve – the worst 90%+ get nothing or lose money, most of those who remain make a small amount of money, and the top fraction of a percent get wealthy. Football would follow this pattern exactly, except the NCAA prevents colleges who would like to pay their athletes from doing so (at least openly). If you consider comped tuition as payment, then it fits exactly.

Contrast this with other potential pursuits. Remember that stat about 90% of new small businesses failing in the first 5 years or whatever? That means the other 10% don’t – those are WAY better odds than pro football. Unemployment in the US is about 5% right now – that means that even most people in the bottom quartile of their salaried professions are usually employed at any given time. 20:1 odds in favor of being employed is a hell of a lot better than 500:1 against.

Poker is a lot like football in terms of the economics, and for the same reasons. Playing poker creates no real value. And anyone with a buyin can do it. It shouldn’t come as a surprise then that the majority of players loose money, about 10% turn a small profit, and the top fraction of a percent are quite wealthy. It’s just like any other career with no barrier to entry and no value creation. So what’s my point here? Simple – in any career with a backloaded payout curve, only the very luckiest and very bet get paid. If you’re a highschool football player considering pushing for the pros, it’s only rational to ask yourself if you’re in the best 1% – in terms of strength, speed, agility, correct body type, work ethic, understanding of the game, etc. If you can’t honestly answer “yes” to that question, you have no business trying to go pro in football because someone who is in that top 1% will come along and take your slot. You’ll only disappoint yourself and waste years of your life. Professional poker is the same.

If you’re not in the top 1% in terms of brains, discipline, social aptitude, ruthlessness, lack of leaks, understanding of the game and so forth, going pro will end in disaster at worst, and treading water at best.  Roughly 10% of the players make money, but making money isn’t the same as being successful – you have to make enough to have a comfortable life and still maintain your bankroll.

This is a tricky thing to evaluate – our society isn’t set up to look for the top 1%. Schools, for example, almost always reward far more than 1% of the class with an “A” or whatever the top possible grade is. And outside of sales, very few professions attempt to distinguish between the merits of their top 5-10% of performers. So most people aren’t used to evaluating themselves or others not just for competence, but for unusual greatness. But if you want to make an intelligent decision about entering one of these backloaded careers, that’s exactly what you have to do. Some factors are easier to estimate than others. For example, an score of greater than 135 or so on a well designed an normalized IQ test would signify top 1% intelligence. Of course there’s no benefit to using some feal-good IQ test that gives everyone a score over 100, and everyone who can tie their shoes a score over 110. That’s just lying to yourself. Using an accurate value is for your own benefit here. Some of the other traits I named are more difficult to evaluate, but here’s one example: people with top 1% discipline have likely never placed a bet with negative expectation in their entire lives, at least since they learned about positive and negative expectation bets. No craps, blackjack (unless you were a well trained counter), roulette, sports or race book (without a well tested known-profitable system), slots or video poker. People with a top-1% “lack of leaks” have never touched a drug harder than alcohol, never drink at the table, have never given a cent to a stripper or hooker, and have never been suckered out of money by a conman or romantic interest. You should be able to come up with “tests” for the other attributes with a little thought.

Now of course you don’t have to be top 1% in every individual attribute to be a top-1% player overall. A football player who’s top-1% in terms of speed, agility, and strength for their body type each measured individually is an enormously rare find and almost certainly can find employment. However, you can expect that most top-1% individuals will be at least top quartile in everything, and top-1% or better than that in at least one thing. In other words, one bad attribute dooms an otherwise attractive package.

The good news with poker is that being semi-pro and semi-paid is OK. Converting a little recreation time into a little money is great when the rent isn’t on the line. And being in the top 10% is enough to make at least a little money. But if you’re seriously considering going pro, you need to ask yourself if you’re really in that top 1%. If not, your prospects as a pro are questionable at best.