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(506) 2223-1327        Published  Monday, Oct. 27, 2008, in Vol. 8, No. 213       E-mail us
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Those hidden pitfalls in hiring domestic employees
By Garland M. Baker
Special to A.M. Costa Rica

So many expats make the same mistakes with domestic workers in Costa Rica.  Usually their intentions are good.  Nevertheless, from the outset of the work relationship most start it off on the wrong foot, giving workers a reason to go to court.  Why should they wait to be fired upon by the domestic staff? They should fix the mistakes.  It is easy to do.

The scenario usually starts innocently enough.  Expats come to the country and start looking for a domestic employee to help with household chores.  This process starts by asking others for references or putting the word out in their community.  Placing ads is not common practice for domestic workers because all kinds of weirdos answer them.  Some even are crooks looking to case out locations to rob.

First mistake: Once a person is found for the job, most people do not sign them up as a legal worker but pay them by the hour.  The going rate today for this type of worker -— someone working by the hour and not registered legally to work — is around 1,500 colons ($2.75) an hour.  The official rate for a servidora doméstica  is 518.67 colons an hour with an upward adjustment coming Jan. 1.  People pay more thinking they can circumvent the law.  Some get away with it, many do not.

Paying a worker by the hour and not putting them on an official payroll is a mistake because the Ministerio de Trabajo says that even temporary or part-time workers need to be registered with the Caja Costarricense de Seguro Social, the nation's social security agency.

Doing so is easy enough.  An employer needs to go to their local social security office and ask them to start a planilla, a payroll for their domestic staff.   The amount paid to an employee is reported at the beginning of each month and the social security costs are paid around the third week of the month.  Reporting can be done online at the Sistema Centralizado de Recaudación, "central collection center," Web site.  Payment can also be done online.  Once a payroll is reported to the collection center, the amount due can be paid from one's bank account via a link to the social security agency.

An employer is responsible for deducting 9 percent from the employee's wages and paying it to the social security department along with the employer's payment of 24.5 percent for a total of 33.5 percent.  For example, for a total payroll of 100,000 colons — this is just an example in round numbers — an employer needs to pay the Caja 33,500 each month over and above the wages of the worker.  This extra amount covers the worker for health insurance, old age and disability benefits, among other things.

Second mistake: Giving the employee too many "in-kind" benefits is a big no-no.  "In-kind" means things in a form other than money.  This includes meals, lodging, clothes, education assistance, and transportation.  In Costa Rica, any "in-kind" benefits an employee receives can become part of their payment for work performed.   In addition to the legal consequences, being too nice can backfire
on any employer.

All domestic workers are entitled by law to some extras like meals.  If no percentage is set in a contract, 50 percent of their salary is assumed the amount.  It is very important to have an
stick 'em up

employment contract with domestic workers stating the exact monetary value of their "in-kind" benefits. 

Third mistake:  Not covering an employee with workers compensation is a legal problem just itching for court.  Most expats do not cover their domestic staff with workers compensation — called riesgos del trabajo — because they do not know they have to.  It is easy to do for domestic workers by purchasing a homeowner's policy called seguro hogar comprensivo or comprehensive homeowners insurance.  One does not need to be an actual owner of a home. The policy also works for people renting.

If an employee is hurt on the job and the employer does not have workers compensation, depending on the injury, the employer could be looking at criminal liability.  Comprehensive homeowners insurance is relatively cheap.  Why would any expat take the risk?  Those without should call an insurance agent today.

What constantly happens is that at some point where a worker is not covered as they should be according to the law, they complain and want to be compensated.  If they go to the work ministry or the social security agency all hell breaks loose.  Inspectors are sent to the workplace to study the complaint, and they are not very friendly.  Employers can be liable for all back payments and be fined heavily for not complying with the law.  If the situation goes to court, the matter becomes even worse.  There is no winning for the employer just paying through the nose to set things straight.  This is one area where Costa Rican attorneys take cases on contingency because they know they will eventually win.

Expats that have made these classic mistakes should start over before they get stuck up and extorted.  They should end any work relationship that is not properly set up, pay the person the legal amounts due for dismissal.  Then re-hire the person and put them on a payroll, stipulate their "in-kind" benefits in a labor contract and cover them with workers compensation.

Garland M. Baker is a 36-year resident and naturalized citizen of Costa Rica who provides multidisciplinary professional services to the international community.  Reach him at  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Find the collection at A complimentary reprint is available at the end of each article.  Copyright 2004-2008, use without permission prohibited.

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Forbes article misleading,
real estate manager says

Dear A.M. Costa Rica:

The misleading article in Forbes contains a kernel of truth amid the foliage of sensationalism. Yes, incautious foreigners have been cheated, but this is hardly a cottage industry here and could happen in any country.   Foreigners have bought and sold land for over 400 years in Costa Rica, beginning with land grants in colonial times. 

Foreigners have the same rights AND obligations under the law as Costa Ricans do.  Anyone buying property in anywhere in the world needs to understand the local law and procedures for the transfer of title, also what they must do to protect their rights to that property. 

The fact is that the people claiming rights to the land in question are acting within the letter of the law. Of course they may be acting unethically and using the law for their own gain, as humans have done throughout history.  Costa Rica's so-called "squatter law" was devised to keep huge landowners, such as those still found in South America, from holding vast territories that are not used for productive purposes. The idea was that if a city-dweller sat on more land than he could manage, small farmers could move in to cultivate it. This law kept strife between classes from breaking into civil unrest and the rise of radical movements. It has contributed to the more than 150 years of political stability in the country.  In addition, safeguards exist to counteract abuse of the law. The property owner should:

• Thoroughly inspect the property and talk to the neighbors before the purchase.

• Make sure the property is completely fenced, and keep the fence and fence corridor in good condition

• Inspect the property at least every three months (take time stamped photos or videos for evidence).

• Keep the property clean at all times.  A clean property shows there is someone around. An unclean property shows abandonment.  In rural areas you can sign a lease with a neighbor who will use the property for grazing or planting. That will keep your property tidy and squatters away.

• Check the Registro Nacional every one to three months to monitor for activity.

• If you have a caretaker, make sure you have a labor contract and pay the Caja (so the caretaker doesn't try to claim any rights to the property).

• Keep the property taxes paid up to date (shows "good faith" and "act of ownership"). In most countries the city or county will take your property if you don't pay property taxes. Most absentee owners who have problems in Costa Rica have not paid their property taxes for many years.

The overwhelming majority of people who buy property in Costa Rica will never face any of the issues mentioned in the Forbes article.  And it is very simple for a buyer to assess the risk of any purchase of real estate in Costa Rica and protect themselves after the sale. Here are the basics:

Step 1: Locate a reputable real estate agent. A reputable broker will provide you with references, and they have an established history of helping expatriates buy property in Costa Rica. They will be a long-term resident of Costa Rica, with an established presence in the community they operate in.   They will help you make sure you don't overpay for the property, and will make sure that any property you look at will meet your requirements and fit your current and eventual plans.

Step 2: Use a competent attorney to register the property.   The National Registry is the central clearing house for real property in Costa Rica.  The documents pertaining to the sale and transfer of the property must be registered immediately in the National Registry.  The concept here is first in time, first in right.  Using an established attorney, who specializes in real estate law, will assure that the sale is properly registered in a timely fashion.  ( preferably one who speaks your language)

Step 3: Protect your rights   Once the property is in your name you can verify its status any time at Each property in Costa Rica has a unique number. You just submit that number to the database and the records for that property will appear.  Any liens, mortgages or paperwork requesting any change to the property will show up on this report.  You can do this once a month, or there is a company called Property Guard Costa Rica ( that will do this for you and notify your local attorney immediately if they detect any activity in the National Registry. 

If you don't live on your property, you should visit it once a month, or once every 3 months at the most.  If a squatter is discovered on the property within the first three months of occupation, eviction is an easy process (not requiring court action — just a police eviction). If you are an absentee owner, out of the country, then you should make arrangements for someone you can trust to check on the property for you.  Find a reputable property management company that can pay your taxes, utilities, have the property cleaned and do regular inspections. Most real estate agents will have or know of a property management company that can provide these services and protect your rights.

Costa Rica real estate has been and will continue to be a safe and profitable investment for any homeowner or investor who does the basic research required before investing and then takes the necessary steps to protect that investment. 

Russ Martin
Mr. Martin is associated with
American-European Real Estate Group

EDITOR'S NOTE:  In the A.M. Costa Rica archives are many stories about property fraud and theft and also ways to protect holdings.

Have you seen these stories?
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San José, Costa Rica, Monday, Oct. 27, 2008, Vol. 8, No. 213

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Environmental tribunal found fault with 14 of 16 projects
By the A.M. Costa Rica staff

Of 16 projects inspected by the nation's environmental watchdogs in the Cantón de Osa, 14 have come under investigation.

In a report Friday at the end of a four-day sweep, the Tribunal Ambiental Administrativo released a summary of its findings.

The first was the discovery of a major hotel in Playa Hermosa de Osa that had been constructed without the proper environmental clearances, said the tribunal. 

Also cited was a 492-hectare (1,215-acre) project in which a road encroached on a river and passes by a nearly vertical slope.

Then there was the two-story house in Pozo Azul de Osa that not only was constructed without any permits at all but had been built on Instituto de Desarrollo Agrario land in a primary forest, said the tribunal.

Tribunal officials said that they visited La Parcela, a restaurant and cabina tourism project that had been constructed in the prohibited zone that covers the land from mean high tide to 50 meters inland.

The tribunal began the sweep Tuesday with an overflight of the Cantón de Osa. From photos released after the flight, there has been intense development and the movement of land in the canton, which runs from Dominical south to the north half of the Osa Peninsula.

The large project is Costa Verde Estates on the border of Pérez Zeledón and Bahía Ballena de Osa, said the tribunal. The first stage of this project involves some 56 terraces for homesites, said the tribunal.

Tribunal judges said they found new terraces, extensive soil movement and roads in forested land, which brings up some very technical requirements.

This is where the tribunal said a road was found encroaching on a river course.

The tribunal said it was seeking information from both  Pérez Zeledón and Osa on permits for the project.

The house at Pozo Azul de Osa went up with no permits, said the tribunal, which issued a closing order for the site. In addition to the homesite in forested land, the access road passes through forest, too, the tribunal said.

The hotel project in Playa Hermosa is almost ready to
Osa hotel
Tribunal Ambiental Administrativo photos
This is the nearly completed hotel that the tribunal said lacks an enviornmental permit.

work stopped on house
These workmen got the rest of the day off because the tribunal shut down this project that it said had no permits whatsoever.

open its doors to the public, said the tribunal. It is owned by Tucano Group S.A., said the tribunal. The project covers some 5,000 square meters or about 54,000 square feet, more than an acre. This project, too, was constructed in forest, said the tribunal.

The tribunal, its judges and experts from several different ministries went to the Cantón de Osa because of the extensive construction there. Municipal permits were up 200 percent in 2008, officials said.

Bus stickup turns fatal as passenger pulls his own gun
By the A.M. Costa Rica staff

Armed bandits are having their way with buses along the General Cañas highway, and one stickup proved fatal Friday.

At least two buses were held up by bandits a short distance west of Parque la Sabana. The first was at 7 p.m. where armed men disguised as passengers suddenly revealed their criminal intent and pistol-whipped the driver. They collected money and valuables from westbound passengers.

One report said a passenger doused one bandit with pepper spray as he left the bus.

About 10 p.m. another robbery took place near Hospital
  México on the same highway. In that one a former police officer pulled his personal handgun, took a fatal shot in the chest and still managed to blast one of the robbers three times before he died. That bus was coming from the west.

Investigators detained a man with bullet wounds at Hospital San Juan de Dios a short time later.

There were three persons in the later attack.

The site is within walking distance from some of the cities more notorious slums, and that probably was the origin of the bandits.

Bus robberies are not new, but the frequentcy seems to have increased.

U.S. State Department official questions credibility of Nicaraguan elections
Special to A.M. Costa Rica

The U.S. State Department is questioning the credibility of the Nov. 9 municipal elections in Nicaragua.

Robert Wood, the department's deputy spokesman said that two opposition parties have been decertified and there is interference with non-governmental organizations that are working to promote respect for human rights, rule of law, and economic development in Nicaragua.

"We are also concerned that the Supreme Electoral Council has generally not processed requests by domestic and international groups to observe the upcoming election in a
timely manner, thereby preventing them from doing so," he said Friday.

Wood said that the United States calls on the government of Nicaragua to ensure that the campaign and the elections will be free of intimidation, violence, and harassment of Nicaraguan voters wishing to exercise their right to vote.

He said the Nicaraguan government should create the conditions for free and fair elections by allowing opposition parties, the press, and the people of Nicaragua to express their views freely and peacefully, granting all political parties the right to participate in the elections and inviting credible groups to observe the elections.

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San José, Costa Rica, Monday, Oct. 27, 2008, Vol. 8, No. 213

Superintendent picked for opening of insurance market here
By Dennis Rogers
Special to A.M. Costa Rica

Costa Rica’s newly-opened insurance industry has a supervisory agency in operation, dubbed the Superintendencia General de Seguros or the insurance superintendent general.

Economist Tomás Soley took charge of the agency Oct. 20. He will oversee the development of the regulatory operation for Costa Rica’s newly opened insurance market.

As a result of the Central American free trade agreement with the United States, Costa Rica was obliged to remove the monopoly enjoyed by the Instituto Nacional de Seguros since 1924. In theory, the market is no longer a monopoly now that the enabling legislation has passed the National Assembly, but until the administrative structure is established, the institute will be the only operator.

Some aspects will still be controlled by the government,
  with workman’s comp coverage and the small obligatory liability coverage included in the annual vehicle registration not planned for wide sale until 2011.

The new agency, to be known by the usual alphabet soup of SUGESE, will be overseen by the Superintendencia de Pensiones, known informally as SUPEN, while the final regulations are established and the agency takes shape. According to Wilbert Quesada who coordinates the work of establishing the new regulator, At present, there are four or five pension agency employees working on the matter now and has budgeted about 20 positions in the independent entity.

However, Quesada said “anybody can apply now for approval though we don’t have any formal applications yet.” He said several companies with foreign capital have expressed interest in the local market.

The full text of the regulatory plan as passed by the legislature (in Spanish) is available HERE as a .pdf file.

Drug police face down five dogs to make an arrest in Montes de Oca
By the A.M. Costa Rica staff

Police paid no heed to a “Beware of Dog” sign last week in Montes de Oca, as they battled past five attack dogs in order to arrest a man accused of running a drug operation down the street from a church.

Police said that the 50-year-old suspect, identified by the last names Mora Pérez, processed drugs in his home on Calle Salitrillo in San Rafael. He hired a 22-year-old undocumented Nicaraguan, identified by the last names Alonso Fuentes, to sell the home-made drugs on the town's main street, police also allege.

Police were alerted to the drug operation after receiving 20
  phone calls to the local hotline 176, a telephone service used for anonymous complaints against local drug activity.

Wednesday afternoon, a local force of the Policia de Control de Drogas attempted to enter Mora's home, but first had to face down five attack dogs before making it to the front door. Both Mora and Alonso were then taken into custody.

The minister of public security, Janina del Vecchio, said the event proved that reducing narcotrafficking was a high priority for President Oscar Arias' administration. She encouraged citizens to continue reporting drug dealers by calling the hotline 176.  The 24-hour-hotline is free and treats all phone calls as confidential.

Four Americans among those detained in police sweep of Calle de Amargura
By the A.M. Costa Rica staff

Police detained a group of seven men, including four Americans, two Nicaraguans and a man wanted for sexual assault late Friday night in San Pedro after police said they found a sizable amount of drugs in their possession.

The seven men met in popular destination Calle de la Amargura minutes after 11 p.m., only to be surprised by a police patrol. Along with two firearms, the men were carrying 45 hits of crack, three ounces of marijuana, three hits of cocaine, and four marijuana joints, two of them already used, said police.

The four Americans and two Nicaraguans were officially detained for failing to carry either a passport or some other form of identification. One Nicaraguan was arrested on an
allegation of carrying false identification documents.

The group included a man with the last names Romero Cordero, wanted by the police for sexually assaulting a minor. According to the police, Cordero had previously faced charges of fraud and robbery.

German Acosta, an official from the Grupo de Apoyo Operacional, a tactical squad that coordinated with the Fuerza Pública during the operation, said that three of the men were also wanted for previous charges.

According to Cristian Zamoro, an official from the Fuerza Pública San Pedro unit, these surprise patrols are meant to increase police presence in Calle de la Amargura. Also known as Calle Tres, the area is a popular nightlife destination for students from the nearby university.

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San José, Costa Rica, Monday, Oct. 27, 2008, Vol. 8, No. 213

A.M. Costa Rica
users guide

This is a brief users guide to A.M. Costa Rica.

Old pages
Each day someone complains via e-mail that the newspages are from yesterday or the day before. A.M. Costa Rica staffers check every page and every link when the newspaper is made available at 2 a.m. each week day.

So the problem is with the browser in each reader's computer. Particularly when the connection with the  server is slow, a computer will look to the latest page in its internal memory and serve up that page.

Readers should refresh the page and, if necessary, dump the cache of their computer, if this problem persists. Readers in Costa Rica have this problem frequently because the local Internet provider has continual problems.

The A.M. Costa Rica search page has a list of all previous editions by date and a space to search for specific words and phrases. The search will return links to archived pages.

A typical edition will consist of a front page and four other newspages. Each of these pages can be reached by links near the top and bottom of the pages.

Five classified pages are updated daily. Employment listings are free, as are listings for accommodations wanted, articles for sale and articles wanted. The tourism page and the real estate sales and real estate rentals are updated daily.

Advertising information
A summary of advertising rates and sizes are available for display and classifieds.

A.M. Costa Rica makes its monthly statistics available to advertisers and readers. It is HERE! 

Contacting us
Both the main telephone number and the editor's e-mail address are listed on the front page near the date.

Visiting us
Directions to our office and other data, like bank account numbers are on the about us page.

Ingrid Betancourt wins
Prince of Asturias award

By the A.M. Costa Rica wire services

Spain's Prince of Asturias Foundation has presented this year's award for promoting understanding among peoples to former French-Colombian hostage and politician Ingrid Betancourt.

Spain's Crown Prince Felipe presided over the awards ceremony Friday in the northern city of Oviedo.

In her acceptance speech, Ms. Betancourt appealed for Latin American countries to fight arms and drug trafficking, which she said feed kidnappings and terrorism.

Among other recipients of the 2008 Asturias awards were tennis star Rafael Nadal for sports, and the Internet search engine Google for communication and humanities.

The scientific and technical research award went to one Japanese and four American scientists for their work in the field of nanotechnology.

The Prince of Asturias Foundation, headed by Crown Prince Filipe, awards eight Asturias prizes annually, covering such fields as the arts, science, and sports.

U.S. secretary of State
holds talks in México

By the A.M. Costa Rica wire services

U.S. Secretary of State Condoleezza Rice is in Mexico for two days of talks with her Mexican counterpart at the ocean resort of Puerto Vallarta.

Rice and Patricia Espinosa, Mexico's foreign relations secretary, will discuss Mexico's battle against its brutally violent illegal drug trafficking gangs and other topics.

Nearly 4,000 people have been killed in drug-related violence in Mexico this year, despite President Felipe Calderon's deployment of 36,000 troops throughout the country to battle the gangs.

Mexico City has called on Washington to release more than $400 million approved by the U.S. Congress as part of an initiative to help Mexico and Central American countries fight the cartels.

Ms. Rice and Ms. Espinosa will also discuss Mexico's newly won seat on the United Nations Security Council. 

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80-year-old true crime story provide the plot for 'Changeling'
By the A.M. Costa Rica wire services

In 1928 in a Los Angeles suburb, the peaceful life of a young single mother is shattered when her 9-year-old son, Walter, disappears.

Five months later, Los Angeles police tell Christine Collins that her son has been found. So far, this true story, dug up from public records, sounds like every other missing child story with a happy ending.

But what followed shook up Los Angeles and brought down the city's political establishment. Now, 80 years later, director Clint Eastwood revives the story in his movie "Changeling."

Capt. J.J. Jones, the officer in charge of the case, refuses to accept that he failed to find the real Walter, especially at a time when the Los Angeles Police Department is under fire for corruption and incompetence.

Things get even more complicated because the boy who has been found claims he is Walter.

Determined to fight for her son, Christine gathers evidence on his identity.

Capt. Jones dismisses Christine as hysterical and insolent because she dares to question his judgment.

"Changeling" is a surreal drama based on a true story Actress Angelina Jolie interprets Christine. She says, back then, women couldn't stand up to men.

 "They had the final word. They could easily say 'You're emotional. You're a woman. You're a mother. You're not
thinking clearly,' and a lot of people at that time would say, 'That's right,'" Ms. Jolie says.

Christine's situation worsens when Jones has her arrested and sent to a psychiatric ward. She is treated brutally there.

Christine gets help from a Presbyterian minister, the Rev. Gustav Briegleb, an outspoken critic of the police.

He gets her out of the hospital and recruits a high-profile lawyer to represent her in a suit against the city. At the same time, there is new evidence that Christine's son was abducted by a serial killer. The boy who has insisted he is Walter confesses that he is not.

Clint Eastwood says it is difficult to believe that the story is true.

 "What this woman had to go through was really amazing," he says. "And the fact that she actually could bring down the whole political structure of Los Angeles in 1928 is amazing."

Eastwood's production is elaborate. The sets, costumes and gestures replicate the times. Colors are subdued, scenes are moody. Angelina Jolie offers a solid performance as a fragile and tormented mother. John Malcovich adds intensity and eccentricity to his character, the Rev. Briegleb. James Donovan is dark and unyielding as Capt. Jones.

Unfortunately, the characters, as written, are one-dimensional. Christine Collins, a beautiful lady, has no flaws. Capt. Jones is pure evil. Eastwood attempts to give equal treatment to the film's subplots, but in so doing, he loses focus and the movie drags on. In the end, it is the sheer power of Christine Collins's true story that makes "Changeling" an interesting film.

Trim your bets to save chips and maximize your gain
In no-limit hold’em tournaments, size your bet's based on your opponent’s skill level.  You can cut corners by betting wisely — save a little here and make a little extra there.

It’s one of my basic premises for tournament play:  Choose to bet the lesser amount when a smaller-sized bet will accomplish the same objective as a bigger one.

You see, it’s really tough to hit a flop.  That’s why players are often glad to see their opponents fold after they’ve made a post-flop bet.  Say you flopped a hand like top pair.  Well, there’s always the chance that someone else did even better, possibly flopping two pair or even three of a kind.

In tournament play, reduce your risk by targeting beginning players whose play is predictable.  One way to exploit these players is by betting a bit less when you’re bluffing and a bit more when you have a strong hand.  Beginners simply lack the sophistication to pick up on this betting pattern.

But don’t try this same strategy against skilled players.  Professional players will eat you for lunch!  They’ll see right through your gambit.

Let’s take a look at an example.

With blinds at 100-200, you decide to raise from late position with Q-J.  A weak beginner calls from the big blind, leaving you heads-up with 1,100 in the pot.  The flop comes As- 4c-4s, completely missing your hand and probably missing your opponent’s hand as well.

Against a thinking professional player, you might bet something around 800 if you were trying to steal the blinds.  A bet of that size would make it a little too expensive for the pro to try to bluff the pot away from you if he had nothing at all. 

Had you bet a lower amount instead, say 500, the pro might conclude that you don’t have an ace.  He might consider reraising to 1,200, even with a marginal hand like J-9.

That’s not how it would work against a weak beginner.

Beginning players are predictable and rarely bluff.  They tend to focus only on their own hand and simply hope to catch the

one card they need to improve.  This creates the ideal situation to cut a corner by betting a little less since your bet size won’t affect the outcome of the hand anyway.

Let’s go back to the sample hand.

Instead of betting 800 chips to try to steal the pot from a rank amateur, bet a smaller amount equivalent to your pre-flop raise.  If he does have the ace, he’d probably call anything, making the size of your bet totally irrelevant.  The smaller bet, however, will save you 300 chips.  And those kinds of savings can really add up throughout the course of a tournament.

What if your novice opponent doesn’t have the ace?  He’ll fold regardless of how much you bet.  So there’s just no reason to risk more than you have to.

Let’s say, though, that you do happen to have the A-K.  Make the bigger bet.  The amateur will react the same way to a bet of 800 as he would to a 500 chip bet if he also has an ace.  In this situation, a bigger bet will maximize the value of your hand.

Here’s one last thought to remember:  The other skilled players at the table will know exactly what you’re up to.  They’ll recognize your betting pattern.  They’ll assume that you don’t have much of a hand and are just trying to run a bluff against a weak player.   But that’s okay; they’re not in the hand anyway!

Visit for information about Daniel Negreanu’s newest book, More Hold’em Wisdom for All Players.

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Jo Stuart
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