Keep Your Eyes on the Prize

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Keep Your Eyes on the Prize.
by Tucson Marlon
 
Just the other day, a couple poker players wondered aloud about the way home games and side pot prize pools should be structured to ensure long term profitability. The conversation quickly mutated into a debate, with a few players arguing that any money won in a tournament is good, no matter the pay out structure.
 
When I heard examples of the many games they played in, with the winner getting sometimes less than 5 times the initial buy in, I knew I had to write something for amateur poker players to arm themselves against exploitation. The amateur poker world is insanely different than the professional poker universe, a divide as vast as the world of Gravity and Quantum Physics.
 
Consider this an introductory course on what amateur poker players should expect from home game payouts and local casino prize pools. One golden rule that should help even the most novice player avoid horribly structured payouts is called the “Times Ten Rule.”
 
The payout for any poker tournament, home game or casino, should always be at least Ten Times your initial buy-in to be a break even game over time. Unlike most sports, poker profitability is calculated over a long period of time. A particular game or play that wins over the short term can be an utterly unprofitable situation over the long term (example: calling a three bet all in with 72 offsuit might get lucky over the short term, but it’s certainly an unprofitable play in the long run).
 
The same basic mindset applies to poker tournaments and the payout structures that are set up to reward the winners.
 
On an amateur level in small home games, side pots, and off-the-beaten-path casinos, you can reasonably expect a ten percent win rate if you have a marginal edge over other amateur competition. That’s just enough to make you a break even player over the long term in payout structures that offer the winner ten times the buy-in. Anything less than that, and the payout structure becomes practically unbeatable over time for the amateur poker player.
 
If your buy-in is $20.00, the purse for first place has to be at least $200 for it to be a break even game for decent amateur players. The Ten Times Rule applies to casinos as well, where you factor in the rake. If your total buy in at the casino is $120, with only $100 of that going into the prize pool, the winner’s take home purse should be at least $$1,200, or you should avoid playing in that particular tournament altogether.
 
Be wary of any casino and home game structure that pays the overall winner less than ten times the initial buy-in. One of the reasons why local Tucson games by Zacariaz Alvillar and Chris Lee Pzer and Lonny Muckey are so popular is because they offer good, profitable structured payouts.
 
Zacariaz Alvillar quarterly game is always amazing because it offers 500 Times your buy-in since it’s absolutely free and open to the public. Jeff Sawyer’s charity tournaments always offer at least 20 Times the buy-in, with winner prize packages that range well over $500 in value. On Saturday, April 28th at 1pm, Eric Noel will be hosting a charity event that offers over 50 Times the buy-in for winner, with a casino grade slot machine, color T.V., and over $1,500 in prizes for the rest of the field. Virtually every game I organize, especially home games, will usually have 20 Times Buy-in with absolutely no rake as a standard prize pool. On Friday, April 27th, the Oro Valley SeniorCommunity Center will offer a 20 Times Buy-in structure by giving away $500 to the winner, in a deep-stack, freeze-out game. These type games are great models for amateur poker players, if only because they don’t take a rake and offer the amateur player a chance to actually become profitable over time.
 
The question you might be asking now is, why would anyone structure a winner’s purse for amateurs that’s less than break even over time?
 
There are many reason why tournament directors create horrible payout structures. The first reason is often greed. In many small casinos, the rake on tournament buy-ins are unreasonably high, with entry fees and dealer fees and other ghost fees that are raked before the actual prize pool is calculated. As a result, make sure you have a clear understanding regarding any casino tournament event on how much is going to the prize pool and how much goes to the rake. Over the years, I’ve seen horrible offenders, with $100 entry-fees with a full $40 going to the rake and only $60 to the prize pool. Games like these are virtually unbeatable for amateur players over time because you simply can’t overcome the rake mathematically.
 
Personally, I require that a tournament have at least ten times my entire initial expense given out to the winner for me to consider it a break even event. Using our above example, I wouldn’t even consider a $600 first place prize as a good payout if my total buy in is $100. It would have to be at least $1,000 for first place for me to give it a hesitant thumbs up. That’s a break even tournament for amateurs, at best. And I’m certainly an amateur. It becomes hard to accomplish type of long term profitability when so much is snatched from players by casino rake.
 
Another reason that many home games and casinos have horrible structures is because of a thing I like to call the “Slot Machine Con.” They prey on a weakness in human nature to exploit amateur poker player. They intentionally short change the winner of a tournament in order to pay a little something to way more people than is standard.
 
The more people that win cash in a tournament, the logic goes, the more people that will return later. By overpaying the field, it spreads the prize pool too thin, making it a game that no one wins in the long run except for a rare situation where one or two players have a significant edge over the competition.
 
I’ve always been fond of tournaments that pay 10 to 12 percent of the total buy-ins, but I’ve seen small home games structures that paid as high as 25 percent of the field. The hosts of these games know that amateur poker players usually aren’t sophisticated enough with the long term math to understand what a profitable or unprofitable structure is. Most amateurs just like the thrill of being able to say they won something in a tournament, no matter how much they are actually losing over time. Amateur players aren’t usually keeping a written log of their wins and losses, keeping track of all their poker expenses to make certain they are maximizing profits the way many professionals do. Oftentimes, amateurs are playing for ego boosts, just wanting to brag to their friends that they cashed in a tournament. Much like the slot machine addiction, players remember the few times they win something, not all the times they’ve lost. And this makes it very easy for home game poker host to spread the prize pool too thin, hoping to get as many amateurs as possible a few extra bucks, no matter that it virtually ensures that all participants in the game are long term losers.
 
The last reason, and possibly the more common reason for the horrible payout structures is simple ignorance. Most home game structures are relaxed games, meant more for socializing, and are hosted by players who have no real incentive to stay abreast of all the changing dynamics of the poker world. Most hosts aren’t studying and keeping abreast of the TDA Rules and Regulations, watching out for revisions. They merely create fun games that are maybe only profitable for one or two players who happen to have a significant edge over the field.
 
I’ve seen games where several dozen players bought in for $50, with the full winner’s purse taking home less than $250. That’s simply not a game that’s meant to allow for profitable long term results. A player would have to win 20% of these events just to break even over time, and a 1 in 5 win rate over time is not a realistic goal for amateur poker players. To put things in perspective, one of the best internet poker players in the business has a long term win rate of 5%, and this player regularly competes against fields of thousands.
 
The take-away from this article is to know that poker payout structures actually matter. A horrible payout structure can have a drastic effect on your ability to be profitable over the long term. Always take a moment to research a tournament to make sure that the winning purse is at least Ten Times your buy-in or more. You can have fun, socialize, and enjoy the game of poker without being destined to lose money over the long term.

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