Playing Guaranteed Tournaments for Improved ROIs

By Debra SaundersGoogle
We gamble and take risks because our ultimate goal is to turnover a positive ROI when we gamble. In poker it is the ROI that is the be all and end all of a professional player career. Winning a tournament turn over an incredible ROI versus buy-in because every player in the tournament contributes to the prize pool. When you start adding on guaranteed amounts to that prize pool the ROI then begins to considerably improve.

Some players will go into a tournament expecting to get the cash spots every game they play. This just isn’t a realistic approach to the game. As Daniel Negreanu once said; if I don’t cash, I feel OK because I know 70% of the field probably won’t cash either. It’s a good way to look at hitting the rails, and a positive outlook for the game. You physically cannot cash in every tournament you play, and you certainly can’t win every tournament you play.

There are some pro tournament players out there who have never won a tournament. That doesn’t mean they don’t have a profitable ROI. They are good enough to run deep enough times to cover the losses on tournaments they have bought into and have been eliminated from before getting a chance to burst through the bubble. Many of these players will only play in tournaments with guaranteed prize pools because if they do cash they receive a higher pay out versus a tournament that has no guarantee attached.

How do guaranteed prize pools affect your ROI?

Now if you ever do burst through the bubble, you will always make a profit because tournaments are designed this way. The deeper you run into the tournament the higher up the pay scale you will finish thus increasing your ROI.

Now, imagine playing 100 $5 tournaments with no guaranteed prize pool. Let’s say the top 30% will cash in a particular tournament, so 150 players. When you compare the prize for 150th place in a $5 tournament with no guarantee with 150th place in a tournament with a guaranteed tournament what do your think the difference is?

It’s easy. If there were 500 players in each tournament, then there is $2,500 of player cash injected into the prize pool. (This is disregarding the fee to buy-in into the tournament). The $2,500 will be spread around the 150 places with the top spots earning the larger percentages.

However, if the tournament also had a $2,500 guarantee, then there is $5,000 being spread around these players, so 150th place is worth double in a guaranteed prize pool tournament.

The long run of things

In the long run of things, instead of playing 100 $5 tournaments with no prize pool guarantee and cashing 25 times, you can play 100 $5 tournaments with guarantees attached and still cash 25 times if that is your average. The monetary value of 25 cashes playing $5 tournaments with guarantees is worth 50 cashes worth of 100 $5 tournaments with no prize pool guarantee. If you can get your head around this, then you will understand that if you play guarantee prize pool tournaments, overall your ROI will greatly improve.

The above explanation is a really oversimplified explanation, but you can get the gist of how the different structures vary in the amount of ROI you can earn.

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