The important rule of good poker strategy is to learn and understand the concepts of actual odds and pot odds. “Actual odds” means the actual mathematical odds of something occurring. “Pot odds”means the relationship of the money in the pot to theactual odds of something occurring to give you that pot.
For example, let’s consider that you and I were to engage in a quarter flipping contest. If I asked you to call the coin flip, heads or tails, you would understand that the actual odds of you guessing correctly (or, getting the call you wanted) would be 50 percent, or even, or put in the way we calculate poker hand probabilities, 1-to-1.
Now, what if I said that every time you guessed right I would give you a dollar and every time you guessed wrong you’d give me three dollars? You wouldn’t do it, of course, and rightfully so. If you translate this simple exercise to poker, the 1-to-1 actual odds of heads versus tails represents the actual odds of getting the card(s) you need to win the hand. The 3-to-1
money odds represent the pot odds being laid in this proposition. It is, of course, a bad bet for you to lay 3-to-1 odds against you to get a 1-to-1 return on your money.
A typical example in Hold’em would be if you flopped four cards to an inside straight draw, such as 7-8-10-Jack. The odds of you getting a 9 for a straight by the river are approximately 5-to-1 against you. So, if you are alone in the hand with one other player, depending on how much money was put into the pot before the flop it probably will not be correct to play to the river in an effort to hit the straight since you will only be getting even money the rest of the way in an effort to hit a hand that the odds are 5-to-1 against you. If, on the other hand, there were seven players in the hand, then you would be getting 6-to-1 money (or pot) odds on a 5-to-1 proposition. Then it would be correct to play for a 9.
Let’s say you hold a pocket hand of Jack and Queen of Hearts. This is a hand that you would play under most circumstances, as its 44.2 percent win rate would suggest. Now, let’s say that five players stayed in the hand for one bet of $4. That means the pot contains $20. The flop then comes up 3-8-9, with two of the cards being Hearts. You now hold four cards to a Heart flush as well as a gut shot straight draw (i.e., 8-9-Jack-Queen, needing a 10 in the middle, or gut, for a straight). What you now need to do is calculate your chances for making a made hand, which would be either a straight or a flush, both of which could win the hand for you. Since there are two Hearts in your hand and two on the board, you only need one more Heart to make a Queen-high flush, a very good hand. There are thirteen Hearts in the suit, so that means there are potentially nine more Hearts available to come out.
These nine possible Hearts are known as outs, so you would be said to have nine outs to make your flush. But you’re not done yet. If a 10 comes on the board on the turn or river, you’ll make a Queen-high straight, also a very good hand. Since there are no 10s showing either in your hand or on the board, all four 10s have to be considered possible outs as well. If you add the nine Heart outs to the four 10 outs, you have thirteen outs.You do, however, have to subtract one from this because the 10 of Hearts is only one card but has been counted twice (as a Heart and a 10).That means you have exactly twelve possible outs for making a Queen-high straight or a Queen high flush, both of which are very good hands and could win you the pot.
The next thing you need to do is calculate how many unseen cards there are. Since you know a deck has fifty-two cards and you can see five of them (your two pocket cards and the three cards that came on the flop), that means there are forty-seven unseen cards that contain the twelve you need. Granted, some of the cards you need might be (and likely are) in the hands of your opponents, but there is no way of knowing. All you can do is calculate the possibilities. If you subtract the twelve out cards from the forty-seven unseen cards, you are left with thirty-five cards that do not give you the straight or flush. This ratio of 35-to-12 reduces to about 3-to-1. That means that your actual odds of getting a card you need to make your hand are about 3-to-1.
Now, let’s compare this ratio to the money, or pot odds, and see how we need to apply it in this situation. You know that the pot contains $20 in preflop money. After the flop, let’s say you are the last player to act, the other four players deciding before you. We’ll say that the first player to act bets $4 and is called by the next three players. It’s now your turn to decide what to do. The pot has now grown to $36 with the additional four bets after the flop. What you have to decide, in effect, is whether or not you should call the $4 bet being asked of you. If you divide the $36 currently in the pot by the $4 bet you’re being asked to make, the ratio of money in the pot (your potential winnings) to what you’re being asked to risk to
win it (the $4) is 9-to-1, which is expressed by the following simple equation:
36 ÷ 4 = 9
Put another way (in Hold’em terms), you’re being asked to make a bet in which the odds against you are 3-to-1, but for which you’ll be paid a return of 9-to-1 if you win the bet. This is a huge positive betting situation for you and one which you would absolutely take every time.
Consider, if you will, what would happen if you had this exact situation one hundred times in a row. About seventy-five times you would lose the bet and twenty-five times you would win the bet (at the 3-to-1 actual odds ratio). For each of the seventy-five times you lost this bet it would cost you $4, or a total of $300. For each of the twenty-five times you hit your hand and won the bet you would win $40, or $1,000 total (at the 9-to-1 money odds ratio). This, in simple terms, is what is known as pot odds. When the pot odds are in your favor, you should almost always make the bet. When they are against you, you should almost always fold. To be a consistent winner at Texas Hold’em, you need to be able to calculate pot odds and make the correct play. It’s really not as difficult as it might seem.