Envelope Poker

A couple of weeks ago I was playing poker at the Stratosphere on a Friday, early evening, and learned that there was a promotion going on. Hitting a flush or better earned you the right to pick an envelope from a box, in which would be an amount somewhere between $10 and $100. This ran until the envelopes ran out--which, of course, happened right before I hit my first flush.

Last night I was at the Stratosphere again, and heard that the same promotion would be running today, starting at 11:00 a.m.. Apparently they have been doing it every Friday for at least several weeks. I was told that there was $2000 to be distributed, divided among 98 envelopes. I had evening plans, so I decided to put in my poker time in the afternoon. I also had played in the 10:00 p.m. tournament last night (came in second), which got me a coupon for an extra $10 in chips, good for the next 24 hours. So the Stratosphere seemed a logical place to hang out today. Neither the extra $10 nor the promotion really mean much to me, but free money is free money, even if only a little. Since the differences between one poker room and another are pretty small anyway, I thought I might as well take what I could get.

I started off playing my usual $1-2 NLHE game. After about an hour I had just broken even, running in place. I had hit one full house, drawing an envelope with the smallest prize: $10.

I had noticed, however, that the next table over, where they were playing $2-4 limit, was sending players to the desk to pick envelopes at a rather astonishing rate compared to ours. This isn't too surprising; it's much easier and cheaper to stay in a hand to the river in a limit game than in a no-limit game. Any promotion that depends on hitting a certain poker hand (high hand bonuses, bad-beat jackpots, the Palms "diamond flush" game, etc.) will always tend to shift the jackpot-drop money from no-limit games to limit games. It's one of the reasons that I would overall prefer that such promotions didn't exist, because as an exclusively no-limit player I will, on average, not get back from them what I contribute. But it's a small effect, so I don't spend much time worrying about it.

As I said, though, the hit rate at the $2-4 limit table was impossible not to notice. Every few minutes they were sending up one, two, or three players. In order to qualify for an envelope, one's hand need not be the winner, nor did one have to use both hole cards. If, for example, there was a flush on the board, everybody still in the hand at the showdown would win an envelope, as long as the pot had the minimum $10 in it.

A while after I had noticed the frequency with which that table was collecting envelopes, I started noticing snippets of their conversation. I put two and two together, and realized what was going on. They were not playing to win pots; they were playing only to hit envelope-qualifying hands at minimal cost.

I have never, in almost five years here, done the "play to win the bonus money" thing. If there's a bonus to be had, and I hit it, fine, it's a little something extra, but I don't go out of my way to try. In no-limit games, it's surely -EV to alter play so as to try to hit some particular combination of cards, because your opponents will just make it too expensive.

In the lowest-stakes limit games, however, that is not necessarily always going to be true. It was clear that the players at the table next to mine had decided, rightly or wrongly, that it was more profitable to try to play for the envelopes than for the pots. I thought this was kind of an interesting situation, one that I hadn't explored before, so I decided to join them.

(As a side note, I used to routinely play $2-4 limit games if that was the only thing available while waiting for a seat at a no-limit game. I eventually figured out, though, that it was a long-term loser for me. Maybe some people know how to play that game well enough to beat the rake plus tips, but I apparently don't. So instead I now carry a crossword puzzle and work on that if I have to wait for a seat. I am considerably happier that way. Now I sit in $2-4 limit games only on the rare occasion that I'm playing in order to be sociable with a visiting friend who doesn't want to play higher. Today was the first exception I've made in a long time.)

Sitting in the game, I quickly confirmed the hunch I had formed from a distance. The play was almost completely passive. People were limping in with what I assume was any two suited cards and any pair, and checking down nearly everything except monster hands. The pot was usually $10 just from the limpers. But when it wasn't, and somebody had a qualifying hand, he would make a little show of counting the pot, make a bet, and somebody would give him a courtesy call to get the pot big enough. Players were obviously willing to do this for each other because they could be confident that the favor would be returned if and when they needed it.

The only time I heard anything explicitly said out loud about what was going on was when one of a cohort of five friends at the table said to a newcomer, "We're not playing to win white chips. We're playing to win envelopes." But it hardly needed to be said. Anybody who knew of the promotion, and who had passing familiarity with how low-limit poker games usually play out, would have immediately noticed how this game was seriously skewed in exactly the direction that that announcement made clear. Players were, e.g., routinely checking flopped sets and two-pair hands, and one can only assume that the reason was to be sure the hand didn't end before getting two shots at turning it into a full house. There was no bluffing, and almost no semi-bluffing with flush draws. Many more pots than usual were checked all around on every street when nobody made a qualifying hand.

It wasn't to be my lucky day. I was at this limit table for about two hours, had a net loss of about $60, and hit only one envelope-qualifying hand. Even that one was bittersweet. I had 8-8, flopped a boat with 8-10-10 and bet it as hard as I could; since I already qualified for an envelope, I figured I might as well also try to win as big a pot as I could. An opponent with K-10 and I got into the only raising war I saw the whole session, which he won when his miracle king came on the river. Grrrrrr. My envelope had $30, which made me about even on the hand.

Others, however, were doing much better. In the photo above, I was in seat 1, so it was kind of hard to take a picture of the guy in seat 10, but you can see much of his stack. He had arrived right at 11:00 and had been playing for envelopes all day. In this picture you can't see that he has two full stacks of red chips. He was sitting behind about $500, an amount almost unheard of in a game of this size. He said, very plausibly, that he had earned $240 in envelopes so far. He was definitely one of the ones I had seen popping up to the desk most often before I joined the table.

I knew only one other player in the game--Cindy (PokerMuffin) from allvegaspoker.com. She, too, was trying Envelope Poker for the first time. Like me, she was failing. She hit only one in the two hours or so we were both there.

Late in my session, there was some sort of kerfuffle. I didn't know what was going on, except that the player sitting next to Cindy, who was one of the group of five friends, accused her of having turned them in to the floor person, who happened to be a friend of Cindy's. She denied it. I had no idea what this was about, but soon thereafter the five friends all racked up and left, saying that they were no longer feeling welcome.

After they had gone, I asked Cindy what that was about. Apparently one of the floor people had said something to one or more of the friends--out of my earshot--about them colluding. It's not clear to me whether they left because of a genuine sense of insult, or because they felt that they weren't going to be allowed to play the same strategy anymore. It didn't matter much, because this was all happening just as it was getting to be time for me to leave for a dinner date.

As I was cashing out, the floor person--who has come to recognize me as at least a semi-regular and somebody who knows the game reasonably well--asked me whether I had noticed "collusion" going on at that table. I said no, at least not in the traditional sense in which that word is used. That is, as far as I could detect, the group of friends was not playing against each other any differently than they were playing against everybody else. They were not building large pots with two of them trapping a stranger's second-best hand in the middle, or signaling each other what they held, or soft-playing each other while playing hard against the rest of the table.

But I told her that it was perfectly clear that they were playing to maximize their chances of earning an envelope, neglecting what would otherwise be optimal strategy to win the pot. I also told her about the one verbally explicit acknowledgement of what was going on that one of them had made. She smiled, thanked me, and said that was helpful information.

This all raises an interesting question: Is such play collusion? More generally, is it cheating of any species?

I don't think so. Suppose the casino put $1000 in every envelope, or $1,000,000 in, say, each of 10 out of the 100 envelopes. It would be positively insane to play in any manner other than what I saw--the players tacitly cooperating to maximize everybody's chance of picking up an envelope. I think that mathematically there is a serious question whether the amounts available in this particular promotion were high enough to justify abandoning most efforts to win pots in favor of earning envelopes, but the ethics are the same if we change the amounts so that it is crystal clear that winning envelopes is far more valuable than winning pots.

The players are simply adjusting their strategies to maximize their earnings in rational response to the rather perverse incentives that the casino has offered them. As far as I could tell, they were not breaking any rules. They were just adapting their poker strategy as the situation warranted (or at least arguably warranted). It is no more cheating than when players slow-play aces during an aces-cracked promotion, preferring to win the bonus over maximizing the pot. It is no more cheating than when players drop down to the cheapest limit games and broaden their starting-hand range to include any two cards that can make quads or a straight flush when a bad-beat jackpot is bulging.

When casinos set up incentives that change what poker strategy will make a player the most money, they shouldn't be surprised that players do exactly that. If the room managers are too dense to anticipate how players will adjust their play to take advantage of the promotions offered, the problem lies with them, not with the players. If the room managers don't want the play of the game distorted, then they should not offer incentives that will predictably result in distortions. It is, in my opinion, misguided for the casino to blame players for responding to game-distorting incentives that the casino has put in place. Accusing them of cheating under such circumstances is muddled thinking, if you ask me.

Poker room managers should also be capable of anticipating that a promotion like this will result in many, many pots that just barely make the minimum size requirement, and that this, in turn, will result in lower-than-normal rake for the poker room while the promotion is running. This seems pretty dumb and self-defeating to me--but then again, nobody ever promoted me to be a poker room manager, so what do I know?

(Caveat: What I heard about the accusation and the players' reactions was almost all second-hand. I could have easily misunderstood something, or drawn an incorrect inference from the partial information available to me. Furthermore, it's possible that there was some sort of collusion going on that I didn't notice or know about. I don't believe that there was, but I hold open that possibility. But if the casino geniunely had evidence that there was, then I think their response should have been far more vigorous and definitive than an accusation or warning.)

What if these five friends had explicitly agreed in advance--in an arrangement that they did not disclose to the other players--that they would play this way and after the game make an even split of the profits? Would that be cheating? (I have no knowledge that this happened; I'm just constructing a hypothetical to further probe into the ethics of the situation.) I'm less confident about this opinion and more subject to being convinced otherwise, but my inclination is to say no, because the resulting play does not disadvantage anybody outside their group any more than if ten strangers sat down, each independently arriving at the realization of how silent cooperation would optimize chances for winning envelopes, and played accordingly. Just as when players silently cooperate to "gang up" on a short-stacked, all-in player late in a tournament, it is not cheating because each is still making decisions in his own best interest.

My understanding is that today was the last day of this particular promotion. Sometime next week, the Stratosphere is shifting to some version of the more common progressive high-hand bonus structure. I do not know whether the envelope promotion is ending because the room managers felt that it was being abused, or just that they change things once in a while to keep it interesting, and this one had run its natural course. Either way, I won't be sorry to see it go. It was mildly fun and interesting to experiment with a radically altered playing strategy for a couple of hours, but I don't think it's the best use of my playing time, and I'd rather not have my contributions to the jackpot pool so distortedly be given away in games I'm not going to be playing. A single two-hour trial of Envelope Poker was enough for me.