Explain it to me like I’m 5: Pot Odds
Ever heard of the phrase “risk/reward”? Well, a 5 year old probably hasn’t, so it is only fair for me to elaborate. Basically, as the two words suggest, a risk/reward situation is an occasion where a person is willing to risk something in the hopes of getting a nice reward in the end.
Risk/reward scenario: taking a risk in order to enjoy a reward
Every Day Examples:
Think of kids being promised a delicious ice cream cone if they behave during a family outing. From the youngsters’ perspective, they are risking being bored and not having fun all day, in the hopes of rewarding their taste buds later. A more adult-friendly example would be driving. When driving, no matter how careful we are, we may be involved in a car accident (risk). All that, in order to get to our destination faster (reward).
As you can see, not all risk/reward scenarios are monetary in nature. As a matter of fact, the majority of them are not. However, many of them are. A classic example would be the purchase of a lottery ticket. In that case, the price of the ticket would be our risk, while winning the jackpot would be the reward. For the lottery, our experience suggests that the reward is unfathomably and disproportionally larger than the risk. As you can imagine, this need not always be the case. Take Marty for example, a businessman who is ready to risk X amount of money on his new idea, in order to eventually be rewarded with a company worth 3X. This is very close to what Pot Odds are like in poker! In a nutshell:
Pot Odds are the risk/reward of poker!
The above definition is a tad TOO simple at this point, so let’s clarify it a bit. The “risk” refers to how much money we are forced to commit into the pot, to stay in the hand. In other words, our risk is equal to the size of our call. On the other hand, the “reward” is simply the size of the pot (excluding our call) which will be sent our way if we are to win the hand.
A simple example:
Say there is already $100 in the middle, when Alice decides to bet $50 against Bob on the river. In this example, Bob would be risking $50 (the size of his call) in order to win the remaining $150 (that is the $100 in the middle plus Alice’s $50 bet). In other words, Bob’s risk/reward is equal to $50/$150.
You may notice that the above number is a bit messy while it is also dependent on the stakes that one is playing. You may also think that from Bob’s standpoint, the only thing he cares about is how much more he can win than he’s risking. And you would be correct on both accounts! That’s why poker players came up with the following two adjustments:
1) First of all, there is no need to carry both numbers around to the last dollar! The only relevant relation in Bob’s risk/reward is that his reward ($150) is 3 times bigger than his risk ($50). Naturally, like Marty the businessman from the example above, we can write Bob’s risk/reward as X-3X or simply as 1-3 (which we read as ‘one to three’). This literally means that Bob is risking 1 bet, in the hopes of being rewarded 3 bets. This is already much nicer than before!
2) The second simple adjustment is that it is better to write the risk/reward ratio as 3-1 (which we read as ‘three to one’) instead of 1-3. That’s because the former expression reminds us of the way odds are expressed in gambling. That being said, this is only a cosmetic change.
Putting it all together.
Now we are finally ready to define Pot Odds in a way which is both friendly and succinct. Informally speaking, pot odds are how much larger the reward (Pot) is from the risk (Call). Slightly more formally:
Pot Odds are the relative sizes of the Pot to the Call… with the Call usually taken to be 1.
Easier than it sounds!
Let’s practice everything we’ve learned and you’ll see it’s not as scary as it may sound.
Q: If Alice bets $100 into $100, what are Bob’s Pot Odds?
A: Bob’s risk is $100, while his reward is $100+$100 = $200. This means that Bob’s reward is twice as big as his risk. Thus, his pot odds are simply 2-1!
Q: What if Alice only bet $20 into $100, what are Bob’s Pot Odds?
A: Bob’s risk is only $20, while his reward is now $100+$20 = $120. This means that Bob’s reward is six times as big as his risk. Thus, his pot odds are now 6-1!
Q: And what if Alice bets $200 into $100, what are Bob’s Pot Odds?
A: Bob’s risk is $200, while his reward is $100+$200 = $300. This means that Bob’s reward is only one and half times as big as his risk. Thus, his pot odds are now 1.5-1!
As we can see, the bigger the bet from Alice the worse the Pot Odds for Bob! This is intuitive because the more Alice bets, the less important the money in the middle becomes.
The power of rounding!
Ok, now that we’ve seen some simple examples, let’s take a look at a messier one, which you’re also more likely to encounter when you play.
Q: Say Alice bets $55 into $170, what are Bob’s Pot Odds?
A: Bob’s risk is $55, while his reward is $170+$55 = $225. How many times is Bob’s reward bigger than his risk? Technically, the answer is 225 divided by 55 (which is equal to around 4.09 for those wondering). But who has time for long division? Poker is already too complicated as it is! Let’s improvise: 225 is very close to 200 and 55 is very close to 50. This means that 200 divided by 50 should give us a similar answer. What is 200 divided by 50? 4. Thus, Bob’s Pot Odds are (roughly) 4-1! There you have it, no need for painful math.
The bonus lesson?
If something seems too complicated, we are probably not looking at it the right way!