Related question: of ALL the games out there, other than Go, which ones have a handicap system routinely used (enjoyed) by people ?
In other words, is Go the exception ?Does it have to do with money ?
It would be illuminating to find out the actual distance between the current top pros v. the others.

Related: if AlphaGo continues to improve, how much farther from top pros can it reach ? How many stones ?
Once AlphaGo can beat all the top pros, will they stop further development ( re: Deep Blue ) ?

If you give a rook as handicap, can you still castle on the missing rook's side?

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Poka King of the south east.

At the amateur level, golf and bowling are played regularly with handicaps.

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KGS 4 kyu - Game Archive - Keyboard Otaku

Also croquet.

I'd suggest that they're still in use in games if they are roughly transitive, I.e if A gives B X and B gives C Y then A gives C X+Y, and give about a 50% probability of winning.

In Japanese chess (shogi), handicaps are used all the time. The stronger player takes some pieces off the board before the game.

That capped pawn handicap in chess is interesting. On first thought the player receiving the handicap could devote everything to win by capturing the capped pawn at all cost.

Real handicaps for pros existed into the 20th century. Years ago Kobayashi Koichi participated in an event (reported in Igo Club, I think) in which he took on three pro shodans starting at even and, I think, changing the handicap each game depending on the result of the previous game. I recall that Kobayashi forced the shodans down to three stones, which would have been the old handicap between pro 9-dan and pro shodan. If I recall correctly, Kobayashi was at his peak then so his actual strength might have been higher than nine dan. Handicaps between pros were abandoned after the institution of komi. It is probably cynical to think that perhaps the higher ranked pros didn't want to have only 50% chance of winning against lower ranked pros in the preliminary rounds of the big title tournaments.

Chess handicaps are not dead.

http://www.usefulchess.com/others/nakamura-komodo.html

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Check it out guys, this chess program (Chess Free by AI Factory) supports handicaps:

I think that handicap shown in the screenie of 8 pieces vs 16 is bigger than 9 stones by quite some margin. That said, a pawn handicap is not that large.

Magnus Carlsen played 9 games against IM Lawrence Trent without a rook, and beat Lawrence in 4 of the games. Now admittedly Magnus is a decent chess player, but a rook is a big handicap, and the time controls were fairly fast, but it shows you have a reasonable flexibility on handicaps at high level.

Interestingly, despite having a nominal "value" of a point each, each pawn would have a different impact on handicap value, simply because of how it impacts piece mobility, king safety and a few other positional issues.

When I was growing up it wasn't unusual but not common to get "a knight's odds" or "a pawn's odds" (White plays without a knight or two pawns) in a game where an adult was teaching a young child or similar. I don't remember any adult players doing but chess was done very informally where I was a boy. I don't have trouble imagining someone doing it in a pub for a bet though.

In chess you might play with weaker players by starting with less figures ... however, in Go the "handicap" system also includes komi ... which is not really possible with chess.
Actually the possibility of using handicap-stones and komi to compensate for strength difference on a larger scale (stones) or finer scale (komi) is one of the good points that drew me to Go (... not the major reason but it was a nice "add-on").

In shogi the handicaps teach a very different set of strategies than you use in a full game, which I believe to be markedly different than Go. For example, I know a large number of joseki as uwate giving 6 pieces as I play that handicap very regularly. There are a number of cases where I can win 3 of 3 with that handicap and lose 1-2 of 3 with a 5 piece handicap, if the other player knows that handicap very well. At 4 pieces, another very common handicap, would be a resounding victory against the same player. This seems counterintuitive coming from the handicap system in Go, I would suppose.