Sklansky Dollars

Sklansky dollars (or Sklansky bucks) is a mathematical concept coined by the humble David Sklansky.

The origin of this concept is a bit of a mystery, although I’m sure it’s from one of Sklansky’s books. Either way, it’s a very well-known concept that highlights how much money you expect to win on average from calling all-ins in Texas Holdem.

What are "Sklansky dollars"?

"Sklansky dollars" tells you how much money you expect to win from the pot based on your equity at that point in the hand.

Sklansky dollars are imaginary, but they are useful for evaluating how much money you effectively win from the hands you play. Sklansky bucks are worked out as follows:

Sklansky Dollars = [ (total pot size) * (equity) ] - last call amount

Sounds a little complicated, but it’s really not all that bad. The best way to explain this concept is through an example.

Sklansky dollars example.

Let’s say we’re playing $100NL against an aggressive opponent.

Our hand: A A
Opponent’s hand: A K

Our opponent ends up pushing all-in before the flop and we make the call, accompanied by a fairly large fist pump. The board comes:

Board: K 2 T 7 K

If your monitor is still intact you will notice that you just lost your $100. However, as you can imagine you’re going to win this pot a lot more often than you will lose it, so we both know that this was far from being a bad call.

Sklansky dollars will show us how much money we expect to win from this call on average and remind us that calling is indeed a profitable play over the long run.

Working out Sklansky dollars.

To work out our "Sklansky dollars" we need to:

1. Find out our equity at the point we risked our money
2. Multiply our equity by the total size of the pot
3. Subtract our final bet or call from the final pot size

Steps 1 and 2 are the main components. Step 3 is just an additional one that gives us a number that can be worked with in other calculations.

1) Find our equity in the hand when all the money went in to the middle.

Using PokerStove we find that we have 87.9% equity in the hand with A A against A K preflop. Easy enough.

2) Multiply our equity by the size of the pot.

The final pot size was $200, and our equity in the hand when all the money went in to the middle was 87.9%.

$200 * 0.879 = $175.8

So, even though we missed out on winning that big $200 pot, on average we will be winning a $175.8 pot every time we call all-in with A A against A K before the flop.

Note: When I say "multiply our equity by the size of the pot" I mean find the percentage of the total pot size. You obviously want to multiply $200 by 0.879 and not 87.9.

3) Subtract our final bet or call from the final pot size.

We’ve just lost $100, but how much will we be earning by making the call over the long run? Just subtract our final call of $100 from the final pot size:

Sklansky Dollars = $175.8 - $100
Sklansky Dollars = $75.8

Therefore, we expect to win $75.8 by calling all-in for $100 with our A A in this spot.

Real money and Sklansky dollars.

In the above example:

We lost $100 in real money.
We won $75.8 in Sklansky dollars.

Just remember that Sklansky dollars are not real - it’s just a $ representation of how much money you expect to win from a pot on average based on your equity in the hand at that point.

Real dollars tell you how much money you have won or lost in the present, whereas Sklansky dollars tell you how much you have won or lost in the grand scheme of things in poker.

What’s the use of Sklansky dollars?

Sklansky dollars is not something you’ll consider using in the middle of a hand, unlike pot odds. However, Sklansky dollars is closely linked with expected value, and both of these concepts are great for post-session analysis and working out whether or not the way you played a hand was optimal.

Another friendly aspect of Sklansky dollars is that it’s great for a bit of reassurance. Even though you may have lost a hand due to variance, your actions may well have been profitable nonetheless. That’s always nice to know.

Over a long enough period of time your Sklansky dollar earnings will equal your real money earnings. Real money winnings are greatly affected by variance.

In my opinion the most valuable aspect of "Sklansky dollars" is that it helps to prevent bad beats from getting to you and affecting your play. A bad player will see the above example as a $100 loss and nothing more. A good player will see the same hand as a great play that will win a lot of money over the long run, regardless of the short term results.

Sklansky dollars and the fundamental theorem.

Sklansky dollars also tie in with the fundamental theorem of poker:

Every time your opponent makes a mistake, you win Sklansky dollars.
Every time you make a mistake, you lose Sklansky dollars.

Nothing really groundbreaking here, but it just goes to show that in a perfect game of poker with no variance, you would win money by making correct plays (as opposed to making mistakes) if you were able to see your opponent’s cards.

Summary.

"Sklansky dollars" just throws luck and variance out of the window and tells you how much money you expect to win on average from your all-in hands.

This article is longer than it really needs to be, as "Sklansky dollars" (or Sklansky bucks, whatever you want to call it) is a really simple concept to be honest. I hope I didn’t drag the life out of it for you - I just wanted to be thorough.

And if you didn’t already notice, the method for working out Sklansky Bucks is very similar to the method for calculating expected value -- they’re closely related.

Hopefully your newfound knowledge of this concept helps you to accept the fact that bad beats happen, and that you’re going to be winning more money than you lose when you get your money in with the best of it.

For more concepts and theories from Sklansky, check out my articles on the gap concept and the fundamental theorem of poker.

Go back to the awesome Texas Hold'em Strategy.

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