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Bloomberg reporter Kit Chillell has spent a lot of time lately following Russian poker players, including one player who goes by the name Farewell.
It can be a very lucrative way of making a living if you're good, and Farewell is extremely good.
Farewell plays poker online and he's known for having a very cerebral, disciplined approach to the game.
For him, poker is a serious business. It's a game of probability in mathematics. He studies it. He has studied it for years. It's no joke to him.
Well.
About a decade ago, Farewell got into a high profile feud with another Russian poker player, someone with a very different personality named Carpav.
He's kind of an internet personality. He dishes out life wisdom on all kinds of subjects, from gambling through to sort of romantic strategy. And he has some controversial views that I won't air here. But yeah, he's sort of nationalistic, right wing sort of character, quite uncompromising, but he does also play poker.
As Kit tells it, Farewell was reading posts in a Russian language chat room and something snapped.
So when Farewell saw Karpov on his favorite poker forum talking about his experience with prostitutes, say or going out and getting blind drunk, I think he took it a little personally, that it was an insult to the thing that he takes very seriously, and so he called out,
you know, this is complete nonstanse. I bet he can't even play poker, and Karpov, of course replied almost immediately, I challenged you to a fight, challenged him to a one on one poker contest to prove that he could do what he said he did.
Karpov had thrown down the gauntlet, a matchup between the disciplined professional and the braggadocius troll. They arranged a table on the website Poker Stars and the battle began. It did not go the way Farewell expected.
They played a few hundred hands, and you know, Karpov completely dominated. I think he won twenty thousand dollars by the end of their.
Session, and that was it. Farewell had lost. He'd been defeated by a bombastic, undisciplined wild card.
His pride was hurt, but I think he was also aware that there are ways to get an unfair advantage in online poker, and that Karpoff might have been using one.
Of those Farewell suspected Karpov had used a bot. Now, this wouldn't have been a big surprise in other games. Computers have outplayed humans in Chess and Go for decades, but poker is different. It was long considered an unhackable game that only started to change about ten years ago when more and more poker bots started to appear online and kid says they're winning.
So I came to this with the idea that I would find the source of all the poker boss, find the genius mind behind these poker playing machines, and find out how they were doing it.
I'm David Gerret, and this is the big take from Bloomberg News today on the show, how a group of Russian students hacked online poker and what that means for the multi billion dollar industry. A confession, and I'm not bluffing. I've never played online poker, So I asked Bloomberg's Kitchillel what these sites look like.
It's normally a green felt digital table, and everyone else on the table will be represented by It's normally a little cartoon image and a user name which won't be that real name, so you don't really know who you're playing.
But otherwise, Kit says, the game is pretty much the same as the poker you'd play at a regular table.
You make bets, you fold, you raise. Everything happens a bit more quickly than real life poker because it's a click of the button. But yeah, it works to all practical purposes. It's just like the real thing.
Online poker started in the late nineties and early arts, and Kit says its breakout moment was this rags to riches event in two thousand and three, an unknown accountant from Tennessee qualified for the World Series of Poker. Watching the footage from back then, you can hear how exciting it must have been to see it live.
This could be the last car of the two thousand and three World Series of Poker.
No one expected him to do well, found himself on the final table with some of the biggest stars in the game and won several million dollars.
What a whole house, Chriss moneymaker, A lemonade saved far har and a twenty seven year old has stepped out of a virtual poker room and in a very swift and unlikely manner is a top the poker world.
He couldn't think of a more perfect name. That's pretty good for a poker player, as far as I know. It's his real name. But a guy with a name Moneymaker who comes from nowhere and wins this massive tournament. It sort of peaked interest in poker as a game, and in the years that followed that online poker grew explosively. There were millions of players around the world trying to have a go at this. You know, many of them thought this was a viable way for them to make money.
Do we have any sense of how much money is bet on online poker in a given years, say, or just how big money wise this is.
I think the revenue that poker sites make from online poker is in the region of three billion dollars a year. That's a tiny portion of the amount of money that changes hands. So you're looking at probably one hundred billion dollars or more changing hands in terms of bets being made online, which is a significant sum of money.
And a significant prize for the first people who could build a bot that could beat it. I asked Kit why it took so long to develop a poker bart that could hold its own.
It's arguably the most complicated game for machine intelligence to master. And the reason poker is so challenging for machines is that it's a game of incomplete information. You don't know what the other players on the table are holding. You have to make an assumption based on their behavior about what they might have, so you have to make a guess about the best course of action. And also you have to lie. If you never bluff in poker, you
will lose more often than not. You need to be able to sometimes fall, give the impression you have a great hand, just to win hands you shouldn't win. And these things are really difficult for computers. Now. In chess, all they have to do is process a very large number of scenarios. It's basically a data processing exercise. You could argue it's not real intelligence, it's just crunching numbers. But poker requires creative thought.
For decades, the best bots were being developed at computer science programs at universities in the US and Canada, but even those left a lot to be desired.
The best academic bots were not very good. In fact, they were a bit of a laughing stock. And the bots would get very easily confused and melt down, you know. Faced with this situation, they couldn't process, they would make incomprehensible decisions, and the top human players used to absolutely hammer them.
And it was in that vacuum that a group of Russian students saw an opportunity. They were math whizzars and poker players who were already using online games as a way to make money, and they realized that if they could build a bot that could guarantee victory, they could make a fortune.
It was Darwinian. It had to be good, otherwise it wouldn't make them any money.
They called their bot the Brain, and Kit says it wasn't just good, it was dominant. In twenty twelve and twenty thirteen, when the group entered their bot in the World Online Computer Poker Contest, the Brain beat out bots developed by teams at Carnegie Mellon and the University of Alberta, which proved the Brain was one of the world's best. And as the Brain grew and developed, so did the ambitions of its makers.
What started out as a quite a small bot farm, which is them and a few of their friends operating computer software running it day and night and trying to make as much money as they could, essentially selling access to their poker brain and doing that they could play thousands of games a day as opposed to a few hundred.
Those students decided to franchise the brain. They were willing to partner with anyone who wanted to operate their own bod farm, and in exchange for access to the bot, partners agreed to share a portion of their winnings within poker circles. The whole enterprise came to be known as the Bot Farm Corporation or bf Corp for short. The only limit to their growth was how long they could stay under the radar, which wasn't very long.
Users who were logging onto a poker website and just losing over and over in robotic fashion were complaining and saying, I'm sick of this website. There's so many bots on here's hopeless, and so I think the websites realized it was ultimately it was going to hurt their business model, and so they started deploying technology to get rid of the bots and keep them off the site.
But remember how Kit called the bot Darwinian. When sites put up defenses the brains. Designers would develop a workaround, and eventually they got rid of the franchise model. They just started selling it to whoever wanted to buy it, and all of a sudden, anyone could buy a bot. There was no stopping it, which created a big problem for the industry.
A few years ago, some Morgen Stanley analysts said it was an existential problem for poker. Why would anyone play a game against an unbeatable machine.
With websites a wash in bots and it becoming increasingly difficult to distinguish between humans and computers. The game was corrupted and players were leaving in droves after the break Why the people behind BF Corp Are now fighting to save online poker After a group of Russian students created the world's premiere poker bot and started selling it to anyone who would buy it. Online poker platforms were flooded
with these unbeatable machines. You'd think that would be horrible for their business models, but according to Bloomberg's Kitchillel, some of these sites didn't think this was the end of the world.
What I discovered was that some poker, particularly poker clubs, which are kind of private unions of players who set up their own private games and run them as they like. Some of these organizations were actively inviting bots to play on the site.
You heard him right. Online poker sites started to recruit bots to play poker. The reason it helped if those digital poker tables were full.
If customers log on they see empty tables, they won't play. People want to log on, find an active game, jump on the table, and join in. But the reality of the way people play poker is that there are going to be hours in the day when there's just not enough people for that to happen. So poke bots actually can be really useful for keeping those tables busy.
Sure, the poker bots might win a lot, but they guarantee a lot of games are happening, games that are played at a really high level. It says these are referred to as liquidity bots. BF Corp. Also cashed in on that trend. They started a new venture called Dplay to sell bots they've developed specifically for poker sites. The company's website says its mission is to quote provide a comfortable environment for gamers that its robots employ different strategies
to maintain in game balance. Kit wanted to talk to its creators, but in spite of all of the success they had, they didn't do in person meetings or interviews with journalists. But Kit was persistent and after a few months he convinced them.
It was a strange encounter. We had to meet in Armenia because of the war, and I couldn't get to Russia and they couldn't really come to Europe, so amenor it was.
Kit met with three of the Russians who created that bot called the Brain, but he says they weren't who he expected. They were funny and curious. They even planned a series of touristy activities so they could all get to know each other, and they eventually told him why they wanted to talk to a reporter.
They do want to come out of the shadows, is what they told me. They want to have a more public face now and they want to try and beat a solution rather than the problem.
Kit had a chance to ask them a question that had been nagging at him. They'd started doing this because they love poker, but had their bots changed the game they love forever?
One of the members of the group said to me, we're in a capitalism game. You know, they didn't make the game this way. They didn't create it. They are just operating within the boundaries and the limitations of the game as it already exists. And I'm sure they would argue that if they weren't making bots, someone else would be making bots, then the bots would still exist. They just happen to be quite good at it.
In other words, yes, the game is changing, and not for the better, at least not if you're human. But it's not the bots that are ruining the game, they argued, it's capitalism.
Well, what we've seen in poker is that when machines can beat us at our own game, nothing good comes as a result. It's been very detrimental to the game of poker and I think the people's enjoyment of poker. It's also interesting that the response of the poker community and has been largely to pretend this threat doesn't exist. And so I'll be interested to watch over the next few years whether the game finally wakes up to what's going on and makes some changes.
The Brain's creators are already implementing. Some Kid says they've come up with a new way to use the technology they developed to bring back some of the joy that's disappeared from online poker.
They want to make a sort of friendlier gaming environment where the algorithm will match you against someone who plays similarly to you. So it's a bit like if you're a tennis player and you join your local tennis club, you don't go straight to the A league. You know you'll play in the D leagues against players with similar
skill set to you early on. And the whole idea is to sort of target and newcomers, target people who play for fun, rather than having the whole system set up to reward people who do it for a job.
This is the Big Take from Bloomberg News. I'm David Gura. This episode was produced by David Fox and Jessica Beck. It was edited by Stacey Annix Smith and Jeremy Kean. It was mixed by Alexander Dubois. It was fact check by alex Sagura. Our senior producer is Naomi Shaven. Our executive producer is Nicole Beemster Boor. Sage Bauman is Bloomberg's head of Podcasts. If you like this episode, make sure to subscribe and review The Big Take wherever you listen
to podcasts. It helps people find the show. Thanks for listening. We'll be back next week.
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