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Morgan Stanley: Bots Pose Threat to 3 Online Poker Firms


Citing fears of online poker bots, Morgan Stanley analyst Ed Young on Sept.12 downgraded his price targets for three companies that run online poker sites. He mentioned The Stars Group, GVC Holdings, and Playtech as corporations that could see their business significantly impacted by the threat of bots. These three firms respectively operate leading online poker sites PokerStars, PartyPoker, and the iPoker Network.

Morgan Stanley Downgraded 3 Online Poker Stocks

In his note, Young wrote:

The (re)emergence of superhuman poker bots in the online ecosystem now appears to be a matter of when, not if.

This news raises all manner of questions for the online poker community. Are poker bots becoming better? Are they able to compete successfully in various forms of poker? Will sites take action to thwart these shady computer programs?

Not only have these concerns been discussed within the poker community, but even the mainstream media appears interested. For instance, Sam Unsted of Bloomberg has written an article on this topic, which you can find here.

Logos of PokerStars, PartyPoker, iPokerThe Three Companies Analyst Ed Young Is Concerned About

Advances in Artificial Intelligence

Gears in Head

All this doom and gloom from Mr. Young didn't just come out of nowhere. Indeed, his investment report followed the achievement of a significant milestone in poker artificial intelligence.

In July 2019, it was revealed that the Pluribus poker bot developed by engineers at Facebook and Carnegie Melon University won handily in six-handed poker against pros. An earlier bot created at Carnegie Mellon, called Libratus, beat skilled professionals too, but Libratus prevailed in computationally easier heads-up poker as opposed to the multi-player games in which Pluribus achieved victory.

The Competition

The human challengers of Pluribus were:

  • Michael Gagliano
  • Anthony Gregg
  • Nick Petrangelo
  • Greg Merson
  • Sean Ruane
  • Dong Kim
  • Seth Davies
  • Trevor Savage
  • Jacob Toole
  • Linus Loeliger
  • Jason Les
  • Daniel McAulay
  • Jimmy Chou

This wasn't just any random group of grinders but rather a selection of accomplished and respected poker artistes. Indeed, Greg Merson was the 2012 World Series of Poker Main Event champion.

During each session, one bot played against five of the above individuals at the same time. Over the course of 10,000 hands, Pluribus was able to beat the field for a winrate of 4.8bb/100.

In another part of the challenge, quadruple World Poker Tour title-holder Darren Elias and 2000 WSOP Main Event champ Chris “Jesus” Ferguson each played 5,000 hands against five copies of the Pluribus bot. Again, Pluribus won, this time with a winrate of 3.2bb/100.

Chris FergusonIt's Official: The Pluribus Poker Bot is Better Than Jesus

Reactions From Pluribus' Opponents

The poker pros who went up against Pluribus were impressed by its overall abilities. Jason Les, who has more than $1.6 million in live poker tournament winnings to his credit, had the following to say about the bot:

It is an absolute monster bluffer. I would say it's a much more efficient bluffer than most humans.

Other noteworthy facets of Pluribus' strategy include its fondness for donk-betting, i.e., leading into the previous raiser, and betting unusual fractions of the pot size, both smaller and larger than the bet sizings commonly utilized by humans. Many expect the premier players of the game to analyze what the bot is doing to attempt to incorporate its innovations into their own gameplay.

Pluribus Gameplay ScreenshotAn Example of Pluribus Making a Huge All-in Semi-Bluff

Why Is This Worrisome?

Blue Informational Button

There have been poker bots before – even a few that have been able to compete effectively for meaningful stakes. What makes Pluribus unique is its talent for besting its adversaries in multi-player games and the low amount of computing power it requires. Training Pluribus in preparation for its big match took only about a week and required less than $150 worth of cloud computing resources.

In order to achieve such remarkable efficiency, programmers utilized several algorithmic techniques. One of them is a smarter search mechanism that models only a few possible future opponent actions in order to reduce the number of possibilities the software must consider when making its plays. Researchers found that simplifying the game tree in this manner had a negligible effect on the robustness of Pluribus' strategy.

Player Fears Warranted?

Red Question Mark

As could have been expected, the revelation of a sophisticated, positive-winrate bot that can handle multi-player situations has led to alarm among some segments of the online poker world. This attitude is perhaps best exemplified by the following post, which contends that computers will soon have an insuperable edge in poker as they currently do in chess:

Pessimistic Post About Bots on 2+2

Yet others note that advances in AI that lead to more powerful bots often also contribute to the ability to detect bots too:

Optimistic Twoplustwo Post About Bots

It's important to understand that regardless of how savvy a bot is in its tactics at the tables, it's still susceptible to the countermeasures that poker rooms employ to combat them. These include IP tracking, play-style analysis, captcha challenges, and active process monitoring. Whether a given piece of software can maintain a +5bb/100 winrate or -5bb/100 does not affect its chances of escaping detection.

What Will Poker Sites Do?

Business Chart

Bot detection has been ramped up across the board in recent years. At least that's what poker site operators are saying. The Winning Poker Network, to take one example, has banned 46 accounts for breaking the site's “fair play policy” ever since it launched a new anti-botting initiative in April 2019.

Phil NagyPhil Nagy, the CEO of the Winning Poker Network, Has Often Been Criticized for Not Doing Enough to Fight Bots

Partypoker meanwhile has been announcing, in its blog, the results of the measures it has taken against bots. In a post dated Sept. 19, 2019, Party stated that it had shuttered 48 bot accounts during the month of August. Summarizing its success, the room explained:

The latest monthly crackdown brings total account closures resulting from fraudulent activity to 649 since December 2018, with a subsequent $1,174,758 and €164,878 forfeited and redistributed to affected players.

We can expect the note of caution sounded by Morgan Stanley to encourage sites to step up their security protocols. Now that serious investors and stockholders are aware of the dangers of bots, it makes even more sense than before for publicly traded companies to come down hard on this kind of illicit software. Even those card sites that are privately held have an incentive to demonstrate their competence in this area in order to compete against their more transparent brethren. A lack of confidence among consumers could spell doom for individual poker sites as well as the industry as a whole, so it's just as important to reassure the public as it is to actively combat botting at the tables.


Pen on Paper

We recognize that the difficulty in catching and evicting poker bots was never about how good they are at the game. It has always been about how easily they could fly under the radar and ply their trade without drawing the ire of site security and other players. Ed Young's research has now thrown them into the spotlight, exposing the phenomenon for the mainstream press to see.

It's our opinion that we'll see site security get better and better in the coming years. Organizations that deal out poker hands online will face increasing pressure to develop clear, consistent, and practical guidelines for dealing with bots.

For right now, bots continue to remain a problem for internet poker enterprises although they're not nearly as much of an issue as some would have you believe. We certainly don't let an unwarranted fear of bots prevent us from accessing our favorite offshore poker sites. If you'd like to read more about online poker sites that are great places to play notwithstanding the presence of the occasional bot or two, then browse over to our thorough guide to interactive poker for USA residents.