This hilarious story by Mark Twain is perhaps one of the most famous literary examples of a tall tale, which can be defined as a humorous story characterised by outrageous exaggeration and outlandish events. Given this definition, and the nature of the tale, relating the story of Jim Smiley who apparently has a god-given ability to bet correctly every time and how he receives his comeuppance, irony plays a central role in the humour of this tale.
However, central to what makes something funny or not is not the content, but the way in which the story is told, and this is demonstrated in this short story through the tone that is adopted. It is the tone that is used and how it stands in contrast to the events narrated that makes the use of irony so successful. Wheeler, the narrator of the tale within a tale, tells his story throughout with a calm and serious tone. Consider the following passage where Wheeler tells about Smiley's dog:
Smiley always come out winner on that pup, till he harnessed a dog once that didn't have no hind legs, because they'd been sawed off by a circular saw, and when the thing had gone along far enough, and the money was all up, and he comes to make a snatch for his pet holt, he saw in a minute how he'd been imposed on and how the other dog had him in the door, so to speak, and he 'peared surprised, and then he looked sorter discouraged-like, and didn't try no more to win the fight, and so he got shucked out bad.
There is immense irony employed in the description of the fight, but also this displays the tone of Wheeler and how humour is created. This story demonstrates that the disparity between the serious, calm tone employed and the absurdity of the tale is what makes this tale so ironically funny.