In a recent Card Player article on the importance of keeping costs down while playing on the tournament circuit, Bryan Devonshire runs down how hard it's become to make money playing high stakes tournament poker. He's right, but maybe even more than he knows for the average player.
It's nearly impossible to be a tournament specialist in the States unless playing high stakes. Even in Vegas, the full schedule of tournament series supplemented by dailies isn't a viable profession. Yeah, you can make money doing it, but not nearly as much as you can make playing $1-$3 no-limit. If you want to be a tournament specialist, move to Mexico and grind online. If your cash game has holes, it's time to plug them.
—Bryan Devonshire, "Irrefutable Southern Logic — If You're Spending More Than You're Makin' Then You're Fixin' to Go Broke,"Card Player, Jan. 8, 2014
Five years ago, Devonshire explains, "the best players could easily expect a return on investment (ROI) of 100 percent" on five-hour $330 buy-in tournaments, for an hourly rate of $65, but that increased rake, structure changes, and better fields drop that to $43/hour.
What's a "Good" ROI?
But that lower hourly rate was his estimate for the "best" players. I know, I know, we're all the best players, but if you look at the online stats, where the ROI is generally higher (because of lower rake and expenses), you can see that acknowledged pro Chris Moorman has a tournament ROI of 50% over a period of seven years (and more than 14,000 tournament) at Full Tilt under the MoormanI account, and 20% over the same period as Moorman1 on PokerStars (25,000 tournaments). His ITM ran consistently in the 11-17% range. While all of his years on record at Full Tilt showed profits (except for 2012, where the site was shuttered most of the year, his volume was low, and ROI was 0%), three of the four years at Stars had single-digit negative ROI percentages. The median value of his annual ROI percentages is 26.5%.
So lets say you're almost as good as Chris Moorman, and that your expected annual ROI is 25%. For every four dollars you put into tournament buy-ins, you make a dollar in profit. If you want to make $10,000 (in the long run), you need to play $40,000 worth of tournaments. Of course, $10,000 isn't really enough to live on. Maybe you'd be more comfortable with $60,000. That's $10,000 above the median household income in the US. It's not partying-with-Devonshire-and-Moorman kind of money, but there's a little extra in there to account for travel expenses and something to keep you warm in a cold tournament room.
To make $60K with a 25% ROI, you need to play tournaments with a combined buy-in of $240,000. Nearly a quarter of a million dollars of buy-ins each year in order to make what is a little above average income in the US.
If that sounds like a lot of money, it is. It's also a lot of poker playing. $240,000 of tournament entries per year is $20,000 of tournament entries each month, or about $5,000 per week for 48 weeks of the year (with four weeks off for good behavior). $1,000 per day, five days a week, if you want a weekend.
The problem with that, as Devonshire alludes to, is that even Vegas doesn't have a daily schedule where you can seriously play $1,000 of tournaments. The AllVegasPoker database doesn't show any regularly-scheduled tournaments larger than the $300 Saturday game at the Venetian, and most of the week there's nothing larger than $150 or $200 games. Even if your in the money (ITM) rate is a decent 20% and you're busting out of four games for every cash, you're probably not going to be able to get in the volume needed to average out $1,000/day. While it's possible to bring the average up by playing larger buy-in events at a series—you could play two $10,000 tournaments to make up the equivalent of four weeks of buy-ins at $1,000/day—that significantly increases the variance already inherent in playing tournaments. And, of course, pretty much every $10K event runs multiple days—many events larger than $250 tend to run two or more, particularly in series like the WSOP Circuit and the Venetian Deepstack Extravaganza.
More to the point, that $240,000 worth of tournament entries and $60,000 of profit adds up to $300,000 a year in tournament winnings. The Hendon Mob database, which tracks winnings for most of the larger live events, has 77,388 players in its dataset for the 2013 money list. WSOP Main Event champ Ryan Riess tops the list with $8,440,813 (his ME win and twenty smaller cashes, all but two under $10,000, mostly at WSOP Circuit events). You only need to go five pages in to the 401st name on the list to get to the last player to make more than $300,000: Daniel Fuhs. That means just 0.5% of the tracked players make it to our semi-arbitrary threshold (though many make it close).
Fuhs, like Riess and most other players, made the bulk of his money in a single cash. A WSOP bracelet win in a $5,000 Omaha Hi/Lo event accounted for 92% of his tracked winnings last year (Riess's Main Event cash was just over 99% of his 2013 winnings). Fuhs's only other tracked tournament cashes last year were in WSOP events, with buyins of $10,000 and $2,500. Thanks to wsopdb.com, we can see that in previous years (2011 and 2012), Fuhs bought into events at the WSOP for a total of $184,000 ($92,000 average), winning a total of $38,732, for a net loss of more than $145,000. Presumably, his buyins for 2013 were roughly equivalent to the previous years, which would put him a bit over $60,000 ahead at the WSOP over three years: $20,000/year (Hendon Mob doesn't show any other tournament cashes for Fuhs in 2011 or 2012). That's some variance for you.
Consistency is the Hobgoblin
Can we get a handle on how much of a factor a single cash can make for a tournament player's annual income? Players who have large numbers of cashes are likely also playing large numbers of tournaments.
Ari Engel, at third on the Hendon Mob list of number of recorded cashes for 2013, is the player with the most cashes to have broken the $300,000 goal (Flaminio Malaguti's 69 cashes didn't quite hit $150,000, and 56 cashes for John Zentner III brought in $112,000). Eric Baldwin (6th, 33 cashes, $373,000) makes the grade, as do John Holley(8th, 32 cashes, $566,000), and Aaron Massey (8th, 32 cashes, $426,000), but Baldwin and Holley had single cashes that made up more than half their winnings for the year, and Engel's HPT Main Event win in St. Louis in November made up 30% of the $459,000 he won in 2013. Massey was the only one of the four to have made it to more than $300,000 without a single win greater than 25% of his total, which shows a strong consistency. All four players were in the top 50 in number of cashes in 2012, with all but Holley winning at least $230,000 (2013 was Holley's first year with more than $70,000 in recorded winnings).
Baldwin, Engel, and Massey were all in the top 200 of the Global Poker Index until the most recent update; rarified territory to aspire to.
Another source of raw info on player performance is the chart of people with 50 or more buy-ins during the 2011 and 2012 WSOP seasons in Las Vegas, available on the German-language poker site PokerOlymp. This data encompasses some of the most accomplished tournament players in the world, specifically players with enough money behind them to put a minimum of about $50,000 into WSOP events each of the two years. Most importantly, in addition to total winnings for each covered player, it includes buyins, making it possible to calculate individual (and aggregate) ITM and ROI. While Arved Klöhn's analysis of the data is in German, the chart at the bottom of the article is easily understood, and clicking on the headers of the table allows you to sort it on that category.
I've stripped out the results of 2012's $1,000,000 Big One for One Drop tournament, because of its outsized buy-in and payouts (only nine of the players in the dataset entered the Big One). That leaves 7,926 tournament entries by these 136 players, which is a reasonably large aggregate sample. There were 898 cashes among them, making for an 11.3% ITM (median individual ITM: 12.5%) and giving the group as a whole a 13.3% relative advantage over a field that pays the top 10%.
11.3% is far lower than the our hoped-for 25%. As a matter of fact, only seven of the 136 players had an ITM above 20%. Despite cashing more often than their peers who played 50 or more tournaments, only three of those seven were profitable at the WSOP over 2011-2012, and one of those three was Jeremy Ausmus (12 cashes in 56 entries), who had 93% of his winnings come from a fifth-place finish in the Main Event.
As a group, the players with 50+ entries had an ROI of 11% ($32.25 million in winnings on $29 million of buyins), but that figure shows how much of a sway is created by large cashes from a small group of players. Most of the group lost money over the period: the median ROI for the group was -32%, just 42 of the 136 players (31%) were cash-positive at the WSOP for the two year period.
Of the players who had positive balances by the end of the 2012 Main Event, there were only seven whose profit was larger than their largest cash (i.e. without that cash, they would no longer have a profit). Ranked in descending ROI order, they were:
- Phil Hellmuth
- Chris DeMaci
- Roland Israelashvili
- Bertrand Grospellier
- David Sands*
- Chris Bjorin
- Stephen Chidwick
* Sands squeaks into this category by less than $700. His largest cash in the 2011-2012 WSOP season was for $242,636 when he came in 30th in the 2011 Main Event. His net profit for the two years was $243,248.
What can we read into this particular set of statistics?
- The players who play the most at the WSOP have only a slight statistical edge on the field as a whole for making it into the money. While the median player in the group has an ITM of 12.5% (a 25% advantage over random chance), that would likely drop off if the focus was narrowed to exclude specialty events that drew fewer entrants from the non-professional pool.
- Long-term expected ROI in WSOP events is just over 10%, if you're really, really, good at poker.
- More than two thirds of the best players at the WSOP are probably losing money every year.
- Of the slightly less than a third of the best players who make a profit, five out of six are only profitable because of a single, large cash.
Flash in the Pan
It's been repeated by every bankroll management advisor: if you spike a couple big tournament paydays early on in your poker career, don't blow your profit on long shots. It's advice that's probably been ignored hundreds of times for every repetition.
While the payoff for the top end in large (several hundred entries and up) tournaments is huge, the payout structures for those events are so flat for most of the field that they're an unsustainable source of income (see "Sweet Spot").
There just aren't enough smaller events—where the median payout is several times higher than that of a large tournament—to make up the necessary volume for players with a 25% ROI to make a somewhat decent living.
Personally, I've always preferred tournaments. I've rarely felt comfortable playing cash games, and my advantage has always seemed to be better in the increasingly confined space defined by player eliminations and rising blinds. But after walking through some of these numbers for the past couple weeks, and reading Brian Devonshire's comment from the top, I'm rethinking my personal poker strategy.
Is it time for you to do the same?
Darrel Plant is a computer programmer, writer, and tournament poker player from Portland, Oregon. You can follow him on Twitter here.