It's time to shuffle up and deal, Mr. President

Someone please let President Obama know I'm trying to get a poker night together sometime in the next couple of weeks. I'd really love to have Mr. Obama sit at the table and play with us. I think I can clean out his wallet.

You see, I don't think Mr. Obama is much of a poker player. He was just re-elected despite the high unemployment rate because folks thought he'd do a better job managing the economy than his opponent. His party has a bigger majority in the Senate and picked up a few seats in the House. He's not in a weak position facing the so-called fiscal cliff.

President Obama started off calling for a renewal of the Bush-era tax cuts for somewhere around 98% of the taxpaying public. His plan to avoid the cliff was to raise taxes on the wealthiest Americans and to trim some dollars from the budget.

His antagonist, House Speaker John Boehner, said he wouldn't stand for raising taxes on the wealthy and that he wanted to see more cuts to Social Security and Medicare and no cuts in defense spending.

If the parties couldn't agree by December 31, the tax cuts would expire and automatic spending cuts would go into place for next year's budget. President Obama held the high ground. If the House Republicans refused to go along with his plan, everyone's taxes would go up in the new year and their precious defense budget would be cut. The president had the best hand. All he had to do was shove his chips into the center of the table and the pot was his. There was no way Mr. Boehner would call that bet.



So what did Mr. Obama do?

True to fashion he checked the hand and offered more concessions to the GOP. How about we only raise taxes on those folks making more than $400,000 a year, John? And how about we cut more money from Social Security than we do from the Pentagon budget? Would that work for you?

As an aside, in all of this talk about Social Security, the one thing no one likes to mention is that Social Security isn't part of the federal budget. It's a "trust fund." While the government borrows from the surplus in the trust fund in exchange for treasury bonds, Social Security spending is completely unrelated to the federal budget. Now at some point in the future when FICA receipts don't cover the benefits paid out it might be a different story.

But if President Obama thinks that making more (unnecessary) concessions is going to engender bipartisanship in the House of Representatives, he's crazy. By caving in like he did he is only strengthening the GOP's hand. Now what's he going to do when Mr. Boehner shoves a stack of chips in the middle of table?

So come on down to Houston, Mr. President. I've got a chair for you. Checking with a strong hand is dangerous. If you make the bet, you're forcing your opponent to make a tough choice; but when you check your hand and your opponent makes a big bet now the onus is on you. When you've got a big hand, it's much better to lead.

This table is now closed!

We can all breathe a deep sigh of relief as our government is hard at work keeping us safe from the scourge of online poker.

On Friday, los federales effectively shut down three online poker sites after unsealing indictments alleging bank fraud and money laundering on the part of the executives at PokerStarts, Full Tilt Poker and Absolute Poker.

The indictments allege that the sites circumvented a 2006 law forbidding US financial institutions from handling transactions for online gambling sites -- most of which are owned and operated outside the United States. The US government is seeking more that $3 billion in money laundering penalties and

forfeitures.

Now let's be clear on this, no US-based financial institution lost any money as a result of the alleged fraud. Money passed through the banks on its way to customers and owners of the online poker sites. The only folks who lost money were the players themselves.

Our military forces are stuck in a quagmire in the Middle East (didn't see that coming, did you?). TSA employees are groping 6-year-olds (and parents just stand there and watch). The government's heading for a shutdown because lawmakers are realizing there just isn't enough money that can be whacked from the budget (unless someone looks under the mattress at the Pentagon). Unemployment remains high and the rising cost of fuel is threatening to put a damper on the economic recovery. Schools are laying off teachers and the Fourth and Sixth Amendments are under assault daily.

But at least we don't have to worry about people playing poker on their computers.

In the meantime you can still play government-sponsored lotteries that transfer money from the poor to state treasuries. You can still bet on the ponies and the dogs at your local horse or greyhound track. You can even go to legal casinos across the country and burn your money at the slot machines. But no online poker.

That online gambling is bad and the government never could figure out a way to get its hands on the money.

And ultimately, that's what this was all about. It was a giant cash grab by los federales. Meanwhile, the people who cooked the books with the mortgage lenders and banks are still out enjoying cocktails after work with nary a fear of getting pinched by the feds. But going after those crooks would require the government to admit that their regulators were either incompetent or in on the swindle from the get-go.

Almost like watching somone backdoor a flush to top the set you made on the flop.

Game theory, poker and trial strategy

When playing poker, is it better to bluff when you think your hand has a chance of winning or is it best to bluff when you think your hand stands no chance of winning?

In other words, do you shove your chips into the middle of the table with a pair of jacks or with nothing better than a ace-high?

According to game theory, the optimum bluffing strategy is to bluff when you have the weakest hand.

Chris "Jesus" Ferguson has a Ph.D. in computer science and relied on game 

theory in winning the 2000 World Series of Poker Main Event.

To see why, let's pretend we are playing one-card poker with a deck of an ace, a deuce and a trey (with the ace being the lowest card). When it's your turn to act you have the choice of betting or checking. Your opponent then has the choice of calling the bet, checking behind you or folding.

Logic dictates that you will alway bet when you have the trey. You know your opponent can't beat you because you have the highest card. If you don't bet and your opponent checks behind you, you win nothing. If you bet and your opponent folds then you win nothing. But, if you bet and your opponent calls the bet, you win his bet. The only way to make any money when holding a trey, then, is to bet first.

If you have the deuce there is an equal chance your opponent has a trey or an ace. If you bet with the deuce, you will win half the time and you will lose half the time. If you check with the deuce you are forced to fold your hand if your opponent bets. If your opponent holds the trey, he will bet. If he holds the ace, he will fold. The best play, then, if you hold the deuce is to check.

On the other hand, if you have an ace, you know you have the worst hand. If you don't bet, but your opponent bets you are forced to fold and lose nothing. If you bet and your opponent bets then you  lose the bet. But, if you bet and your opponent folds, then you win his bet.

Let's say, for instance, you hold the ace. Your opponent therefore holds either the trey or the deuce. If you bet and he holds the trey, your opponent will call your bet and win the hand. If you bet and he holds the deuce he will be forced to fold his hand because he can only beat a bluff. The best play, then, is to bet whenever you hold the ace - since the only way you can win the hand is if your opponent folds in the face of your bet.

By following this strategy you will win every time you hold the trey and half the time you hold either the deuce or the ace. Your opponent will be forced to fold whenever he holds the ace or deuce meaning you have a 2-to-1 chance of winning every hand when it's your turn to act first.

Whenever your opponent acts first and bets out you will call if you hold a trey or a deuce - since you can never win calling a bet with an ace. If your opponent checks you will bet if you hold an ace or a trey, since he can only call your bet if he has a trey.

Now that's all well and good, you say, but what on earth does that have to do with defending folks accused of committing crimes? Just imagine all of your cases could be sorted like cards. Some cases are strong, others are weak and the rest fall somewhere in the middle. What is the optimum strategy for defending these cases?

According to game theory you push the prosecutor to trial on your best cases. That forces the prosecutor to evaluate the case and should, in most instances, result in dismissals (or at the very least, reductions). But you already knew that.

What do you do with the bad cases and the cases that fall somewhere in the middle (the aces and deuces)? Based on our poker game example, you push the bad cases to trial as well and try to work out the rest. Why you might ask would you do such a thing?

You do it because it's the only way you're going to get a dismissal on the worst cases. If you push a case to trial then the prosecutors have to deal with witnesses, some of whom are reluctant or live out of town, and evidentiary issues. You never know what's going to happen. Maybe the prosecutor thinks twice about whether her case is a whale (a trey) or a dog (an ace).

You should win (or get dismissals) on your best cases. The only chance you have of winning your weak cases is to go to trial. If the case falls in the middle, however, you have to weigh the benefit or winning with the risk of losing. These are the "coin flip" cases that could go either way. These cases have to be "played for value."

If you think about it, you should already be doing this intuitively. We tell some clients their cases are slam dunks. We tell others that they have nothing to lose by going to trial. It's the ones in the middle that are the most difficult to handle.

***

For more information on Chris Ferguson, game theory and the World Series of Poker I recommend you check out Positively Fifth Street by James McManus.

Finding out where you're at

In poker you're generally better off if you're doing the betting rather than calling a bet.

The logic goes something like this. If you think you've got a good hand you want to "find out where you're at." The way to do that is to bet out or to raise. If you're raised you can assume your opponent thinks he has a strong hand. If you get called you can assume your opponent has a drawing hand or a middling pair. Your bet or raise can also serve to thin out the herd leaving fewer people to draw out against you.

The coin of the realm at the poker table is the colorful disk of clay in front of you. The currency, however, is information.

If you just check and call you're not getting any information at all about where you stand. If you check, what are you going to do when your opponent bets out? You won't have any way of figuring out what range of hands your opponent is holding.

To win at the poker table you have to be aggressive - not reckless, mind you, but you have to bet or raise when you think you have the best hand. Maybe assertive is a better descriptor.

You also have to be assertive in the courtroom. Force the prosecutor to show his hand. Push the envelope when it comes to discovery motions and suppression issues. You need to know where you stand before you address that panel in voir dire. 

Unless you've got a monster hand, laying behind the log can be a dangerous play.

Government declares war on online poker players

If you play online poker you might have a bit of a problem withdrawing your winnings thanks to los federales. The U.S. Attorney for the Southern District of New York has ordered three banks (Citibank, Wells Fargo, Goldwater Bank and Alliance Bank of Arizona) to freeze the accounts of payment processors who handle the winnings for online players.

Los federales informed Alliance Bank that accounts held by Allied Systems, Inc. (a payment processor) were being seized on the grounds that the accounts served to launder online poker winnings and that exigent circumstances existed that justified the warrantless seizure.

David, an online player from Maryland, won his way into the World Series of Poker Main Event by winning an online poker tournament. But, when he tried to cash the check he received, it bounced.

"It's not like the government went after money that the site made, instead they seized money that belonged to me," David said. "There is no law that restricts citizens from recovering money."

The government's action has affected some 27,000 online poker players.

Current federal law makes it illegal for the operators of online gambling sites to accept money from bettors -- but it is not illegal for an individual to place a bet online.

The funds seized by los federales belonged to the individuals who placed the bets, not to the online gambling sites or to the payment processors for those sites. The money seized by los federales was not the result of any illegal activity on the part of the recipient of those funds.

The acts of los federales amount to an illegal search and seizure affecting some 27,000 Americans who did not break the law. The players themselves broke no law in sitting down to play online poker.

What we have is the federal government enacting legislation that it cannot enforce against entities that are not citizens (whether they be individuals or corporations). And so, just as the Chinese government represses its own citizens because it can't control what people outside China say or do, the U.S. government reaches out and steals money from our fellow citizens.

More wisdom from Texas Dolly

While there are few things, in the world of cards, that can beat the exhiliration of winning a big pot in a poker game, the truly successful players are the ones who build up their stacks by winning small pot after small pot. Those are the players who have the chips to take a shot at a big pot and not have to worry about busting out. 

They understand that pocket aces and kings generally will either win you a small pot or lose you a big one, and that the best way to play a strong hand in the hole is fast and strong. Limp in with aces and you could be looking at disaster down the road.

"I've built a reputation as an extremely aggressive player. And I don't ever want to lose that reputation. It's what enables me to pick up more than my share of pots.

"In most cases, my opponents are afraid to play back at me because they know I'm liable to set them all-in. So when they don't have a real big hand, they let go of the pot, and I pick it up. The accumluation of all those small pots is a big part of my winning formula. It's the bonus I get for playing the way I do, and it's the secret of my success.

"If I win ten pots where nobody has a big hand, ten pots with let's say $3,000 in them, I can afford to take 2 to 1 the worst of it and play a $30,000 pot. I've already got that pot covered thanks to all the small pots I've picked up. And when I play that big pot, it's a freeroll." -- Doyle Brunson, Super System 2

Down at the courthouse it's great to hear a judge read "not guilty" from the jury's verdict form, but you stand to win more capital by playing your strongest cases hard and fast. Sure, a dismissal early on in a case isn't sexy and doesn't create same buzz as an acquittal at trial. But, with a dismissal you don't have to worry about the six or twelve folks sitting in the jury box and your client doesn't have to go through the private hell a trial can be.

A poker lesson from Texas Dolly

Doyle Brunson is one of the most legendary poker players around. Texas Dolly won back-to-back World Series of Poker Main Events holding a 10-2 in the hole. He's also put together two excellent poker primers: Super/System and Super System 2.

Brunson is a firm believer in selective aggression. By choosing your spots and being relentless when you enter a pot, you can put an almost unbearable amount of pressure on your opponent.

"Like me, all the top players know you have to be extremely aggressive to be a consistent winner. You have to bet, bet, bet, all the time. If I find somebody I can keep betting at and he keeps saying 'Take it, Doyle,' 'Take it, Doyle,' well, I'm going to keep pounding on him. I'm not going to let up. And that poor guy never will win a pot from me. He'll have to have the nuts (best possible hand) or the nerve to call me." --Doyle Brunson, Super System 2

The same principle can be applied in the courtroom. There are some cases in which the facts are pretty clear and the object is to obtain the best possible deal for your client. At the table you'd be looking to dump these hands as quickly as possible.

There are some cases that are monsters. It might be a near-perfect video in a DWI case (or a client who refuses everything), a bad charging instrument, the perfect alibi witness or other evidence that exonerates a client. Just think pocket aces or pocket kings at the table. You play 'em hard and you play 'em fast.

Then there are the marginal cases. These are the cases in which a break here or there, one way or the other, makes the difference between a winner and a loser. It's like looking down at suited connectors or a suited ace or a small pair in the hole. You want to see that flop: if you hit your hand, you pump it, and if you miss your hand, you dump it.

"There's not a man alive that can keep leaning on me. I refuse to let somebody keep taking my money, and all the other truly top players are the same way. An aggressive player might do it for a while. But at the first opportunity I get, I'm going to take a stand and put all my money in the pot.

"It's like that little boy who keeps sticking his head up and keeps getting slapped all the time. Well, sooner or later he's not going to stick his head up anymore. So if a guy keeps going on and on and keeps pounding on me, then me and him are fixing to play a pot." -- Doyle Brunson, Super System 2

When you play fast and hard with your monster cases you pick up a lot of dismissals and reductions and it gives you the ability to make a stand with a marginal case. And if you keep pounding hard enough, when you stand up and go "all in" by announcing "ready," you might just see your opponent blink.

Sittin' down at the table

A South Carolina municipal judge has struck a blow for poker players everywhere by deciding that poker is a game of skill and, therefore, not an illegal pasttime.

South Carolina law forbids gambling on games of chance, such as craps. Up til now people playing poker in the privacy of their own homes were subject to arrest by local police.

As anyone who has ever calculated the odds of drawing to the flush or inside straight knows, there is far more skill to playing winning poker than meets the eye. Poker is all about making the correct choice at every step of the game: knowing what starting hands are worth playing, knowing what cards are still in the deck, knowing the pot odds, knowing the tendencies of the players sitting at the table with you. Put some hard earned money behind those decisions and you can feel the pressure mounting.

Those skills you used at the table last night are the same skills used in defending fellow citizens accused of breaking the law. Every case is worth fighting, but you have to know the stakes for which you choose to fight: an acquittal, a reduced charge, a lesser sentence, probation, deferred

adjudication, pretrial diversion, etc. You have to be able to identify the strengths and weaknesses of your case and weigh them against the hand dealt to the state. You have to be able to read your opponent and know how far you can push. Finally, you have to have the courage to put it all in the middle of the table.

Postscript: As South Carolina criminal defense attorney Bobby Frederick pointed out, the gentlemen were convicted of running a gambling house.

Hold'em and trial strategy

A few weeks back I referred to David Sklansky's Theory of Poker and my colleague Mark Bennett's posting about Mr. Sklansky's fundamental theorem.

We can also take a few lessons from the so-called "Poker Brat" Phil Hellmuth (who has a record 11 wins in World Series of Poker events).  While television revels in Mr. Hellmuth's tantrums after taking a beating, I will focus on his underlying strategy that has made him a success.

On television you see all the monster bluffs the players pull off - after all, that's drama - but you don't usually get to watch the way the greats play their hands normally.  You see, the big bluff doesn't work if that's all you do; the big bluff works when you've set your opponents up by playing solid poker.

In his book, Play Poker Like the Pros, Mr. Hellmuth advocates playing very tightly, that is, only entering pots when you have two solid hole cards or when the pot is laying you good odds on a drawing hand.  He calls it his "Top Ten" strategy.  According to this strategy you should only enter a pot holding a pocket pair of 7's or better or an A-K or A-Q.  These hands give you the best odds to win the pot.

Now, you may ask, how does that relate to criminal defense?  

Push the prosecutor hard on your best cases - best sets of facts, best circumstances or best clients.  Put the state to its burden of proof.  Do it enough and you will earn a reputation that will precede you when negotiating with the state.  That reputation will allow you to sneak a marginal case by, since the prosecutor knows you only take your strongest cases to trial.

Imperfect information

A couple of weeks ago my colleague, Mark Bennett, posted an article on his blog, Defending People, about David Sklansky's theory of poker.  The theory is, boiled down to its essence, that, in poker, you win anytime you make an opponent play a hand differently than they would have played it if they knew what you were holding.  And, on the other hand, you lose anytime you play a hand differently than you would have played it had you known what your opponent was holding.

This same concept in an economic context is known as the problem of imperfect information.  In a market analysis, information is a commodity and is available for exchange.  However, as the guiding principle of market economics is scarcity, the acquisition of information is subject to competition.  And, as a result of this competition for information, no one has perfect information.

The lack of perfect information is why some investors can "beat" the market while others lose -- if we all had perfect information our return would be the same as that of the market.  The random walk theory holds that our collective imperfect information guides the market and that, in the long run, we are better off spreading our risk across the entire market rather than trying to beat it here and there.

And this brings us back to the courtroom.  None of us has perfect information.  We weren't witnesses to whatever happened.  Police officers have to decide whom to believe when putting together an offense report. Clients lie to the police.  Clients lie to us.  Witnesses don't remember key facts.  Jury selection is limited to 20-30 minutes.  Judges won't allow questionnaires.

And so, in the courtroom, just as at the poker table, you must make decisions based upon what you think the other side is holding based on your reads and the prosecutor's actions.  And, just as in poker, the object is to make correct decisions -- you can't always control the outcome.