Indeed, there are lots of "professional gamblers" who have gone bankrupt, and this is often because they conduct themselves more as "gamblers" and not so much as "professionals" -- by making their money in a positive EV game at which they are skilled, such as blackjack card counters, advantage slot / VP players, poker players -- and then proceeding to play other games such as craps or sports betting at which they do not have an advantage, or in some circumstances, such as poker players, moving to games that are beyond their skill level that therefore become negative EV for them.
Poker players in particular, especially tournament poker players, are also playing games with very high variance, and which probably do not lend themselves to the use of Kelly since they are not easily quantifiable as to EV, and therefore estimates of adequate bankroll are based on general opinion rather than on mathematical determination. There are many poker players who are regarded as highly skilled by their colleagues, but for whom the element of chance has destroyed their bankroll, which can occur in such a short time frame that adjusting one's level of betting "downward" as might be dictated by Kelly is even less practical than it might be in a game such as VP with discrete denominations that also prohibited exact Kelly betting.
I could be wrong, of course, about some of these games. I play them all, but my success suggests that I don't know them all as well as is necessary to succeed, so take my opinions with that in mind :)
--BG
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5a. Re: Why you should care about the Kelly criterion
nightoftheiguana2000@yahoo.com wrote:
>007 wrote: "It wold have to be a professional who knows enough to have positive EV but who is so blind to the danger of overbetting that s/he'll still lose. I think that's rare. I don't think "Fortune's Formula" made that case."
>
>Of the professional gamblers that you know, how many have gone bankrupt at least once?
Many may have, but I don't know to what extent it was due to
overbetting with positive expectation and to what extent it was due to
playing with negative expectation. An implication in your question is
another reason to place less emphasis on the Kelly Criterion, since it
operates in the vacuum of not being able to replenish a lost bankroll.
nightoftheiguana2000@yahoo.com wrote:
>007 wrote: "It wold have to be a professional who knows enough to have positive EV but who is so blind to the danger of overbetting that s/he'll still lose. I think that's rare. I don't think "Fortune's Formula" made that case."
>
>Of the professional gamblers that you know, how many have gone bankrupt at least once?
Many may have, but I don't know to what extent it was due to
overbetting with positive expectation and to what extent it was due to
playing with negative expectation. An implication in your question is
another reason to place less emphasis on the Kelly Criterion, since it
operates in the vacuum of not being able to replenish a lost bankroll.
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