Thu, Aug 24, 11:13am by Poker Guru
When I started playing live poker at a local poker club, all the oldies wanted to have a “winner takes it all” payout structure when we played tournaments. Nowadays players seem to prefer really flat payout structures and I wonder why. Did the old-timers have more gambling in their blood? Or is it just that today’s players have become used to all the “consolation prizes”?
World Series of Poker was the first poker tournament and it actually took them many years to start awarding more than a first prize. When Doyle Brunson won his two WSOP Main Events in 1976-1977 there was no second prize in any of them.
Of course, the field was a lot smaller than today but in 1977 there was 34 entries. Interestingly they awarded 2nd and 3rd prizes in the side events but I guess they wanted to keep Main Event pure.
That changed over time and when Stu Ungar won his third WSOP Main Event in 1997, 27 players out of 312 entries were awarded prizes. That was 8.7% of the field. In this year’s Main Event 1,084 out of 7,221 players were in the money and that is 15%. That is quite a significant increase compared to twenty years ago.
The major online tournaments are similar. Pokerstars Sunday Million pays 16-17% of the players and Ignition’s Sunday $100K Guaranteed pays 15-17% of the players.
I think that the tournament organisers want to have it this way because all the players who win 1.5 times their buy-in or whatever the smallest prize is are likely to reinvest that in another poker tournament or spend it elsewhere in the casino.
It is a little bit like those scratch card lottery tickets when you often win your money back. Of course, most people will buy a new lottery ticket when that happens which is good for the lottery.
Should your tournament strategy be different depending on the tournament structure? Yes, definitely. The “winner takes it all” prize structure is actually the easiest one because then your tournament equity is linearly proportional to the size of your chip stack.
A 20,000 stack is worth exactly twice as much as a 10,000 stack. Isn’t that always the case? No, not with a normal payout structure.
Let me explain that with an example. Assume that you are in the money and the next 10 players to be eliminated will get the same prize. The average stack is 2 Million, you have 10,000 and another player at your table has 20,000.
To calculate your equity, you need to take the sum of all prizes in the prizes structure multiplied with the probability of you winning them.
In this extreme case, the probability will be very high for both of you to win the smallest prize and the difference between your equity will therefore be very small.
This whole concept of tournament equity is interesting and I will get back to it in a future column.
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