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The Ultimate Leverage for Riches

4. Robin Hood Cheater (78)

• distributing losses more evenly among players
• decreasing losses of big losers
• making the hands of both the Robin Hood cheater and his beneficiary more readable.

Sid Bennett often cheats for big losers like Ted Fehr. For example, Sid folds, then looks at Ted Fehr's hand and sees a four-card heart flush. Quickly he grabs Ted's draw card--it is a club. Sid then rummages through the discards. Finding a heart, he switches it with Ted's club. . . . Ted smiles and wins the pot with a heart flush.

While Sid's card switch is crude and obvious, no one except John lets himself fully realize what happened. Later in the same game, Sid attempts a partnership with John. This is what happens:

The pot is large. Five players are in for the last bet-- including John and Sid, who are sitting next to each other. Sid bets and then his knee nudges John's leg. John promptly folds his three queens. Sid wins with a full house.

"Remember that," Sid whispers to John while pulling in the pot.

A few hands later, Sid Bennett is dealt a pat straight. Again he nudges John, who folds immediately. Sid grins and winks a faded-blue eye at John.

Later that evening, John draws to a lowball hand that he has bet heavily during the first round. But he catches a pair of fives to ruin his lowball hand. Still John bets the maximum in trying to bluff out his two remaining opponents.... Ted Fehr folds because Sid is sitting behind him with a pat hand. John's knee nudges Sid's leg. Sid smiles and then shows everyone his eight low as he folds. "Thanks," he whispers to John. Promptly John Finn spreads his hand face-up on the table to win the $600 lowball pot with a pair of fives.... Sid looks at the ceiling and sputters dirty words.

Instead of simply saying no to Sid's collusion-cheating offer, John earns a good profit while making his answer clear.

5. Detection (79)

Professor Merck suspects Sid of cheating. One night, Sid cheats him out of a $700 pot. After sitting in silence for several hands, Quintin abruptly leaves without a word and slams the front door. Knowing that Quintin detected Sid's cheating and fearful that he will tell others, John pursues him out the door. Quintin stops under the street lamp when he sees John approaching. For a moment, neither says a word.

"You saw it too?" Quintin asks, squinting his green eyes.

"I see it in every game."

"So why haven't you said something!" the professor half shouts. "He should've been bounced from the game long ago."

"Look, who's the biggest loser in the game?" John quickly replies. "It's Sid. And you're a big winner. In the past couple of years, you've taken Sid for thousands of dollars. Sure he's cheated you, me, and everyone else out of pots. But what if we'd thrown him out two years ago? We'd have done him a $40,000 favor."

Quintin's mouth opens. He rubs his chin.

"Sid's a cheater and deserves to be penalized," John continues. "But the best way to penalize him is to let him play. We only hurt ourselves by bouncing him from the game."

"Never thought about it that way," Quintin says, scratching his head. "Maybe you're right.... Who else knows about his cheating?"

"No one who'll admit it. Cheating is a strange thing. Most players have strong feelings against acknowledging it.... Everyone subconsciously knows that Sid cheats. But no one wants an unpleasant emotional experience, so no one sees him cheat."

"Someday, someone will accuse him."

"Perhaps," John continues, "but visible suspicion will occur first. Take yourself--he cheated you out of $700 tonight. Yet, still you didn't accuse him. You passed it off till next time. The next time you may accuse Sid, or you may pass it off again."

"But what happens when someone does accuse him outright . . . what then?"

"If he's accused outright, we not only lose Sid, but other players might quit. The game might even fold. We must convince any seriously suspecting players that the best action is to let him play. If they won't accept this, then we must either stop the cheating or eliminate Sid from the game."

"So for now, we leave everything as is?"

"Right," John replies with a nod. "And when Sid steals your pot, just remember he'll pay you back many times."

"But why is he a big loser if he cheats?"

"A cheater, like a thief, is unrealistic. He overestimates the value of cheating and plays a poorer game. In fiction, the cheater may be a winner. But in reality, he's a loser, and usually a big one. The good player--the winner--never needs to cheat."

"True, true," Quintin mumbles.

"See you next week," John says as he walks away.

What does John accomplish by his discussion with Quintin? He keeps the game intact by pacifying Quintin, and keeps Sid in the game to continue his cheating and losing.

The good player can lose to cheaters in certain situations. Two or more professional cheaters, for example, can gang up on a good player to reduce his edge odds to a losing level. The good player, however, quickly detects team or gang cheating and either beats it or eliminates it or quits the game (see Chapter XXXI).

XV
Taxes and Laws (80)

For federal tax purposes, net annual poker winnings must be declared as income.[ 21 ] Poker income can be listed under the heading of "Other" on Federal Income Tax Form 1040. In most states, net poker gains can also be declared as income. Gambling losses can be deducted (on Schedule A) from poker income, but net gambling losses cannot be deducted from taxable income.

Poker players' winnings are not subject to the federal excise taxes on gambling.[ 22 ] Apparently the federal government does not classify poker players as gamblers (even though poker income is treated as gambling gains by the IRS).

A survey by the author (summarized in Table 23) shows that poker games are technically illegal in most states. Nevertheless, few if any states apply their anti-gambling laws to private poker games. But house games (in which pots are cut or raked for a profit or during which players pay collection fees) are vulnerable to legal action in most states.

Table 23 gives information about the legal and tax status of poker in each state.

TABLE 23
STATE LAWS ABOUT POKER

This section of the 1040 Federal Tax form shows how John Finn declared his $54,000 poker income over a decade ago.[ 23 ]

[ 20 ] See Chapters XXIX-XXXI for details about undetectable, professional cheating.

[ 21 ] Carmack v. Commissioner of Internal Revenue. 183 E 2d l (5th Cir. 1950).

[ 22 ] According to the United states Excise Tax Regulation 4401 (paragraphs 4020-4032) poker winnings are not subject to the 10 percent excise wagering tax. And according to Regulation 4411 (paragraphs 4075-4083) poker players, even professional players, are not required to register and purchase the wagering Occupational Tax stamp.

[ 23 ] 1965 is the last year John Finn's poker records and tax returns were made available. With inflation and expanded poker action, John Finn's annual poker income is estimated at $200,000 for 1980.