Annie Duke on the Life Lessons of Poker

In 2004, Annie Duke was among the final three players in the World Series of Poker. She was up against two of the best poker players in the world: Phil Hellmuth, and Howard Lederer—who happened to be her older brother. On her way to victory, she demonstrated extraordinary ability to read the cards as well as her fellow competitors. But perhaps the most memorable hand of the night was not the last one, but the heartwrenching elimination of her brother. Duke was dealt a pair of sixes. Hellmuth folded. Lederer had a pair of sevens.

At that point, Annie’s chance of winning the hand was around 18.5%. But in Texas Hold ’Em, the players have to make their hand with a set of community cards. And when those were laid down, Annie found herself with a full house: three sixes and two queens. The moment was bittersweet.

And then I hit the six. I had multiple emotions. I was obviously very happy to see the six, but I was obviously also very sad to see the six, because I wasn’t really rooting against my brother. If I’m going to knock my brother out of the tournament, I don’t want it to be on some stupid bad beat that I put on him where he has the much better hand.

She talked with Charles Monroe-Kane about how lessons she's learned at the poker table translate to other aspects of her life, especially knowing the difference between luck and skill.

[On the hand with your brother]: You got lucky, right?

It depends on what you mean by luck. Luck is a weird word, because there’s this colloquial use of the word, and then there’s a more technical use of the word. If by luck you mean that I had a negative expected value on the hand, and I won it, yes, I got very lucky.

At the time did you sit back in your hotel room, chilling, two million dollars surrounding you, and say to yourself “damn, I got lucky?” or did that come later?

It was definitely a lucky moment. In the colloquial use, people think of luck, like bad luck, as just something bad happened to them, and good luck is something good happened to them. I think about it as when you’re kind of on the bad end of what your expected value is, so you’re setting some sort of expected value. For example, let’s say that we were betting on flipping a coin, and I was taking heads, and I happened to flip heads three times in a row, which is only going to happen 12 and a half percent of the time, in my everyday life I’d say I got really lucky to have that happen. You got unlucky to have that happen to you, that you happened to lose that three times in a row. But in a more technical sense there’s another step, which is you can be a very low percentage to win something but still be making an excellent bet and actually still be making money on the bet.

I could have a hand that’s only going to win 20 percent of the time, which means that for every dollar that I bet, I need to be winning four dollars on the times that I won in order to break even. If I bet a dollar where I’m going to win five dollars on the time that I win, then I’m making a really good bet, I’m going to win money, but I’m expecting that I’m going to lose that 80 percent of the time. So when I lose that particular hand, I don’t really think of it as bad luck, because I’m kind of supposed to lose it 80 percent of the time and when I win it, I’m not necessarily thinking good luck, because it was just 20 percent. I’m thinking more about the investment that I made. I think the difference is that when poker players are thinking about luck, they’re adding this extra step, which is what your expected value is, whereas when you’re using it in your everyday life, you don’t have that extra step of what was that expected value.

What about everyday life? You’re a mom, You’re a wife. You’re a world citizen. Do you look at things all day and go “Oh, 18.5%”?

I do, and I think that what happens is that poker players are dealing with uncertainty all the time, which is really where luck comes from. In chess, there’s no luck because there’s no uncertainty. There isn’t this random element where you can’t really predict the outcome, necessarily, and random things happen. If you’re going through a traffic intersection and you are following the rules and you only go when it’s green, that doesn’t mean you’re not going to get hit, right, because it’s not a zero variance game. I think that because I play poker, I don’t sort of ruminate and think, you know, sort of go “oh, I got so unlucky, I can’t believe that” and get really upset by it. I think that I’m taking into account that a certain percentage of the time, things aren’t going to work out, and a certain percentage of the time, they are. I think about it very probabilistically, that nothing’s 100%.

It makes me think about, from another poker player, Phil Hellmuth who has this great quote: “If it weren’t for luck, I’d win every time.”

“If it weren’t for luck, I’d win every time.” The problem with that is on both sides it’s really bad. It’s saying if you took luck out of the equation, then my decision making is perfect. That’s bad for both reasons. If you chalk bad things that happen to you up to bad luck, there’s nothing to learn from it. You’re just sort of ruminating on your bad luck and not thinking about what was the learning experience I could have from it. On the flip side, if you attribute good things that happen to you to skill, which is what we tend to do, so we flip it. The bad things are “something bad happened to me, I had such bad luck.” The good things are “oh, look at what a great decision maker I am.” Then you’re not looking to see if that was because you actually made a decision and had good luck.

In the hand with my brother, I’m perfectly willing to admit to you that I had the worst hand and I got lucky to win it, because my expected value was negative there, and you want to be examining that as well. I think that that particular thinking error is one of the most prevalent thinking errors. It has a name, it’s actually called the fundamental attribution error. When bad things happen to us, we say “oh, that was bad luck.” When good things happen to us, we say “oh my gosh, look at how great I am.” When bad things happen to other people we say “what an idiot.” When good things happen to them, we say “they got lucky.” It’s very common.

You have a quote on your website that says “Tilt usually arises from something you don’t have a lot of control over.” Can you help me understand the bigger meaning of that one?

Sure. So, tilt is a term that poker players use that means the state of being emotionally out of control because of something that happened that then causes you to make bad decisions going forward. So it’s a long concept. It’s a very important concept, and with important concepts, you come up with one word to describe in whatever idiom you’re using. So poker players came up with tilt because it’s something that they actually talk about all the time.

Do you mind giving an example of that?

Sure. I get all my money with aces, and somebody else has two fives, so I’m going to win that hand 82% of the time. Then I lose the hand and I lose a bunch of my chips, and now I just start playing every bad hand that comes my way, because I’m just so upset that I lost the hand. That’s being on tilt. In life, it’s like you see people on tilt all the time, it’s like they get in a fight with their girlfriend and all of a sudden they’re at a bar on their 17th beer. That’s going on tilt. Most people, when they lose that hand with the aces, get really emotionally off-center. They become very not decision fit. They make really bad decisions going forward, where a more rational person would say “I had aces, the other person had fives, I had the best hand, nothing after that was in my control whatsoever. So 18.5% of the time I’m going to lose that. I lost it, let’s move on to the next hand. I can be comfortable knowing I made a really good decision.”

That’s very hard for people to do, because it’s that, you know, “why did that happen to me? Why was I so unlucky? I made such a good decision and then this horrible thing happened to me.” Now they can’t really get their frontal lobes engaged anymore. Their temporal lobe has now just taken over. Their limbic system is on fire, and they tend to lose all their chips after all. Keeping control really matters. What keeps you in control is the ability to recognize what was in my control and what wasn’t, and I’m not going to ruminate about the things that weren’t.

Poker Legend Annie Duke on Luck

In 2004, Anne Duke was in the final of the World Series of Poker. She was up against the top two poker players in the world, Phil Helmuth and Howard Lederer (who happened to be her older brother). And the jackpot was $2 million. Annie won, but that's not the entire story. It's how she won that became legendary. 

Your rating: None
Average: 4.4 (8 votes)