As I recently explored, getting to the payout in tournament poker can be brutally variant. Even with the best odds behind you, you will regularly experience cruel losing streaks. This makes surviving into the money in any given tournament feel a bit special, but the real and even more elusive challenge is playing profitable tournament poker. Since the typical tournament payout structure substantially favors deep runs, stringing together minimum prize payouts will not allow your bankroll to survive tournament variance.

For example, this year’s $10,000 No-Limit Hold’em Main Event with 8,569 players started paying out $15,000 at 1,286th place. A $5,000 profit might not seem too shabby for a few days work until you factor in failing to cash the next 6 Main Events would be a totally normal swing which quickly turns the $5,000 profit into a $65,000 loss. Not until the occasional payout of $79,668 in 81st, or the top 1%, might you start to think of long term profitability. Damn.

With needing to occasionally run deep combined with the variance of tournament poker, does anybody make money playing tournament poker? To see what this looked like across a large player pool, I simulated the same 8,569 players playing the Main Event fifty times (i.e. a lifetime of entries) while using this year’s payout structure.

For the first round of simulation, we are going to assume all players have an equal skill level and therefore a random shot at running deep or winning any given tournament. The results:

Players | Median Profit[1] | Profitable[2] | Median ITM[3] | Min Cashers[4] |
---|---|---|---|---|

8,569 | -$253,750 | 1407 (16.4%) |
7 (14.0%) |
4336 (50.6%) |

Over fifty Main Event tournaments with players of equal skill, only 1,407 (16.4%) managed to turn a profit and half the players lost at least -$253,750. 4,336 (50.6) of the players managed to finish in-the-money at least the median number of times yet came out unprofitable. A real case for quality runs over quantity.

Since the distribution of poker skill at the Main Event is hardly egalitarian, let’s run the same simulation and assign each player a skill rating between one and five[5]. The higher the skill rating, the higher chance of running deep or winning a tournament. We’ll also assume there are vastly more skill-one players than skill-two through skill-five. The results:

Skill | Players | Median Profit | Profitable | Median ITM | Min Cashers |
---|---|---|---|---|---|

All | 8,569 | -$279,419 | 19.7% (1694) |
12.0% (6) |
32.1% (2755) |

1 | 51.6% (4429) |
-$374,815 | 5.6% (262) |
8.0% (4) |
14.9% (563) |

2 | 25.7% (2208) |
-$222,740 | 19.7% (413) |
12.0% (8) |
32.1% (1305) |

3 | 12.8% (1104) |
-$73,320 | 39.6% (438) |
24.0% (12) |
58.0% (641) |

4 | 6.4% (552) |
$78,472 | 63.4% (350) |
30.0% (15) |
36.4% (201) |

5 | 3.2% (276) |
$292,352 | 83.6% (231) |
38.0% (19) |
16.3% (45) |

There’s a lot to take away from the above chart, but let’s just focus on the skill-five players to really drive the point of the last two blog posts home. On the whole, the skill-five players came out ahead with a nice median profit of $292,352. Yet, 16.4% of the skill-five players failed to stay above water. You can be one of the best tournament poker players in the world and still come out in the red over your lifetime of Main Event tournament performances.

Can you imagine somebody like Tiger Woods or Serena Williams not only having never won a major tournament but failed to cover their travel expenses? Nobody would pay even a modicum of attention to them. However, in the poker world, they might still be an all-time great. Thank you, variance.

## Footnotes

[1] Median player profit over the fifty tournaments. Profit for each player calculated by $(Total tournament winnings) - (50 tournament entries x $10,000).[/f]

[2] Number of profitable players over the fifty tournaments. Profit for each player calculated by $(Total tournament winnings) - (50 tournament entries x $10,000).[/f]

[3] Median number of in-the-money finishes for each player over the fifty tournaments.[/f]

[4] Number of players who finished in-the-money more than the median but still failed to turn a profit.[/f]

[5] For this exercise, a skill rating of five means the player is five times more likely to win the Main Event than a player of skill-one. This does not necessarily mean a player of skill-five is merely five times better than a skill-one player, but even a world class player can only do so much to overcome luck in any given hand or tournament. Another way to think of this is a skill-five player would taken down a 9-handed single table tournament otherwise filled with skill-one players 5 of 13 times (38%). This feels pretty reasonable.[/f]