The Rake Isn’t What Will Kill You in Tournaments

A refrain you hear from tournament players as the summer schedules and structures are announced is that the rake is going up once again. That and that they’re paying too many players.

Tournament (and cash) rake amounts have gone up over time—everyone who gets into the casino business gets into it to make money (Donald Trump excluded)—and tournament series operators and casinos are likely to continue pushing the boundaries of what people are willing to pay, in the name of profit, in years to come. But rake is the least of your worries.

It’s not the number of payouts, either. There was an outcry last year when PokerStars announced plans to pay 20% of the field a few months after the same type of hue over the WSOP extending payouts to 15% of the field. It meant a reduction in payouts of about 6—7% for players in the top 10%, meaning a player who would have gotten $10,000  in a $1,500 tournament might only get $9,300 or $9,400. An ROI of 567% reduced to something like 525%. The horror! There were even people complaining that they didn’t want to play poker for two days only to get a min-cash. Instead of nothing? Seriously, guys, I’ve got a bridge in Brooklyn for sale.

What is really working against you in most tournaments is the payout structure. As I’ve written about in the past, there’s a “sweet spot” in most tournament payouts where the size of the field usually dictates that if you cash, you’ll likely be cashing for more than in other field sizes. The money up top increases exponentially, but can come at the expense of practically everyone else in the tournament, particularly if the payout curve is tinkered with to accommodate some artificial goal (see Satisfaction Guarantee).

The Seniors tournament is playing out at the World Series of Poker right now, and the last report I see has a couple players in 26th and 27th getting payouts of $21,000. It’s the largest Seniors tournament ever at the WSOP, and last year’s field was largest one-day field ever for a live tournament (made larger this year because of re-entry).

Think about it. These guys have made it to the final three tables of a tournament which—if everyone had been seated simultaneously nine-handed—would have had 599 tables. Everyone down to two tables is going to get the same $21,000. so if you take 19th, after having outlasted 5,370 others—99.65% of the total field of 5,389—you’re going to have an ROI of 2,000%.

Sure, that’s a nice payday. Whoever wins the tournament is going to get $617,303, nearly 30 times as much, but that is the nature of tournaments. The thing is, you could win more money by beating the same percentage of the field to take 2nd place in a 145-entry $1,000 tournament. Sure youy chance of winning more than a half million dollars is zip, but it’s almost zip in the large field. 40% of the total prize pool is tied up in the final table, and that’s a bigger problem than the rake.

I mean, unless you’re on the final table.