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12.08.10

Obama's Poker Club Tells All

How did the president, a noted card player, get pegged as a pushover? Randall Lane talks with Obama's poker buddies about his habits at the table—and how the GOP exploited him.

I had the odd experience of playing craps for several hours with John McCain, during the run-up to his 2008 presidential campaign. The qualities I saw—thousands of dollars in chips manically thrown onto the felt in hope that lady luck would bless them—did not portend presidential greatness. Barack Obama’s gambling preference, poker, has far stronger provenance, with decisive presidents like Jackson and Truman and Teddy Roosevelt lauding its strategic virtues.

That makes the unilateral and one-sided concessions Obama has increasingly been making—most notably this week’s tax deal, but also last month’s unilateral federal wage freeze and a half-dozen earlier unreciprocated health-care and fiscal concessions—all the more baffling. As any serious player can explain, poker has nothing to do with cards (a three-year-old can memorize the rote full house-beats-flush-beats-straight rules) and everything to do with reading people and displaying strength in order to compel a desired outcome.

So how did our poker-playing president, who once self-rated his skills as “pretty good,” so quickly gain a reputation as a pushover, notably among members of his own party? Perhaps it’s better to examine that question in reverse: Could Obama’s poker habits have predicted his negotiating style?

“A very cautious player,” says Illinois state Senator Terry Link, who between 1997 and 2004 hosted a weekly game with Obama and other lawmakers at his house on Seventh Street in Springfield. “Very cautious in the sense that he didn’t just throw his money away. He played the odds. He didn’t play for the inside straight.”

“Barack was a very good, very conservative poker player,” adds Larry Walsh, now the executive of Will County, outside Chicago. “He held his cards close to his vest. Very rarely did you find Barack Obama being caught by surprise.”

John Avlon: Obama Gets RolledTheir Wednesday game had a codename, “the committee meeting” (“people would come up and say, ‘Is there a committee meeting tonight?’,” remembers Walsh ), and it became so popular among Democrats, Republicans and lobbyists alike that two tables were sometimes required. The game started at a local country club, moved to Link’s living room, and then finally to his basement, which Link transformed into a full-blown poker den, complete with vents to accommodate all the cigarette and cigar smoking. (“I refuse to answer that question,” he chuckles, when asking about Obama’s puffing habits, “because I know Michelle too well.”)

At the committee meeting, pizza was munched, liquids were quaffed—Obama generally put down a few beers—and the stakes were enough to matter, yet not enough to really sting. It was hard to win or lose more than $150 in a night, according to the participants.

“He wasn’t a bluffer. When Barack was betting, you could pretty much know that he had a hand.”

Obama generally did neither. A core member of the committee meeting—the game folded after his election to the U.S. Senate catapulted him out of Springfield—Obama’s tight playing style generally insulated him from huge swings, and he won more nights than he lost.

“If you were more liberal in your poker-playing and more conservative in your politics,” Walsh, a right-leaning Democrat, remembers once telling him after pushing over a stack of chips, “we’d get along a lot better.” Basically, Obama’s betting style mirrors his White House style: deliberate, logical, patient.

“Good players know that to manage their money well, it’s OK to lose small pots,” says Phil Hellmuth, who has won 11 World Series of Poker titles—the most all-time—when I describe Obama’s game to him.

To see the roots of this week’s tax deal, though, it’s necessary to peel back Obama’s poker game even further. Specifically, how he dealt with bluffing.

Poker is negotiation. “Sweetening the pot,” “upping the ante,” “showing your cards,” “folding your hand”—all those clichés stem from poker for a reason. And strong negotiation generally requires some element of bluff—using the fear of what can’t be seen to maximize the strength of what can. The key, of course, is doing it convincingly, which explains why pros don sunglasses—and Obama didn’t.

“He wasn’t a bluffer,” says Walsh. “When Barack was betting, you could pretty much know that he had a hand.”

Link remembers more bluffing, to a point: “He bluffed, with the cards. He wasn’t going to bluff with a total longshot.” In poker parlance, this is known as a semi-bluff: even if you’re called, you still have a so-so hand as insurance.

And if his opponents bluffed? Both Link and Walsh remember Obama as disinclined to engage unless he already held an overwhelming advantage. “If he was chasing [another card to complete a straight or flush], he’d give her about two shots and then fold,” says Walsh.

If nothing else, John Boehner, Mitch McConnell and the GOP Republicans have demonstrated their bluffing proficiency. Obama confirmed as much at yesterday’s press conference: “I have not been able to budge them. And I don't think there's any suggestion anybody in this room thinks realistically that we can budge them right now.” There’s only one way to find out, but Obama, lacking an overwhelming hand, has been unwilling to do so over the first two years of his presidency.

To poker champ Phil Hellmuth, this provides Obama one last, best opportunity. He describes a strategy he uses where he lets his opponent win a few undeserving rounds, similar to a rope-a-dope in boxing. “You want your opponents to underestimate you. The power players who play for every pot and never blink, all of sudden find themselves, after one big hand, in the taxi home, broke, trying to figure out what happened.”

Easy for Hellmuth, who has won about $10 million in his poker career. Obama, the guy who took home 50 bucks here or there, now plays for infinitely larger stakes. In the short-term, he gets to corral despondent members of his own party, some of whom are already tweaking his tax compromise. Harry Reid reportedly has the first amendment ready to go—it would legalize online poker.

Randall Lane is editor at large at The Daily Beast. The former editor in chief of Trader Monthly, Dealmaker and P.O.V. magazines, and the former Washington bureau chief of Forbes, he is the author of  The Zeroes: My Misadventures in the Decade Wall Street Went Insane.