In chapter 7 of The Theory of Poker, David Sklansky introduces two key concepts—implied odds and reverse implied odds—which expand on pot odds by considering how future betting affects the true value of calling. The chapter explains when future bets work in your favor, making a marginal call profitable, and when future bets work against you, turning a seemingly good spot into a long-term loser.
Implied Odds: When Future Profit Justifies a Call
Implied odds refer to the money you expect to win on later streets if your draw or hidden hand hits. The idea is that current pot odds may look insufficient, but the additional bets you can earn later make the call profitable.
Key Idea
Implied odds = (expected total win once you hit) : (current cost to call)
Typical Examples
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Small pocket pairs in hold’em
These are rarely worth anything unless they flop a set, but when they do, they often win large pots against strong but second-best hands. Even if the pot currently offers only modest odds, the anticipated future wagers make calling preflop correct. -
Cheap early streets in stud or multi-street limit games
When early bets are small but later bets are large, calling early with hidden or semi-hidden hands can be correct even when the immediate price seems poor. You are effectively investing a small amount now for the chance to win multiple big bets later. -
Calling for one card in the previous chapter’s effective-odds examples
If you’ll win more chips on later rounds when your card hits, your implied odds transform an otherwise losing call into a profitable one.
Implied Odds in Big-Bet Poker
Pot-limit and no-limit games magnify implied odds:
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Future bets can be enormous—potentially an opponent’s entire stack.
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Hands with disguised winning potential (sets, straights, flushes) become highly profitable because they can win huge pots when they hit.
The chapter uses Stu Ungar’s famous 1980 world championship hand against Doyle Brunson to illustrate this: Ungar called a flop bet not for the small pot in front of him, but for the chance to win Brunson’s entire stack if he hit his inside straight. His implied odds far exceeded his immediate pot odds.
Factors That Determine Implied Odds
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Size of future bets
Bigger possible bets = larger implied odds. -
How well hidden your hand is
Disguised or unexpected hands earn more because opponents pay off more often. -
Opponent skill level
Weak players pay you off; tough players fold early, shrinking your implied odds.
Limitations
Implied odds do not apply when:
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You or your opponent is all-in, because no future bets exist.
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Your draw might make a second-best hand (e.g., non-nut flushes), because winning future bets becomes unreliable or impossible.
Reverse Implied Odds: When Future Losses Make a Call Dangerous
Reverse implied odds refer to situations where you are likely to:
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Win only a small pot when you’re ahead, but
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Lose large future bets when you’re behind.
Your opponent dictates the betting and can stop putting money in when he’s beaten. This means your true risk is far larger than the current bet appears.
Typical Scenario
You hold a marginal made hand, cannot improve meaningfully, and suspect the bettor might be bluffing. But:
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When you’re good, your opponent shuts down and you gain little.
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When you’re wrong, your opponent keeps firing and you lose multiple bets.
Your “real” odds may be closer to risking 3 bets to win the current pot—far worse than the immediate pot odds suggest.
Reasons Reverse Implied Odds Occur
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Unclear hand strength: You don’t know where you stand.
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Low chance of improvement: Even if you hit, you don’t overtake better hands.
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Commitment danger: Once you call now, you are psychologically or strategically committed to calling again.
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Opponent flexibility: They can shut down with worse hands but continue with better ones.
Bottom Line
When reverse implied odds are present, folding early is often correct, even if the pot seems to be offering good odds. These are the spots where disciplined players save huge amounts of money compared to looser, less thoughtful opponents.
Summary of the Chapter
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Implied odds allow you to call with hands that may not justify a call based on the current pot alone, because future winnings make up the difference. They are especially important with hidden draws and in big-bet games.
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Reverse implied odds warn you that certain marginal made hands, though currently “good enough,” can cost far more in future bets than they can win immediately.
In short:
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Implied odds = future profits that make a call better than it looks.
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Reverse implied odds = future losses that make a call worse than it looks.
Mastering both concepts helps players avoid subtle but costly mistakes and extract maximum value from profitable opportunities.