Friday, March 26, 2004

Tournaments: Positive or Negative Value?

I was chatting with Hdouble last night. He pointed out again (see the comments to my Week Seven Wrapup) that my tournaments last week were a big drain on my bankroll.

Okay, that's true. I did the math, and had I entered none of those tournaments, I'd be $16935 better off. That includes BG's home game, which I probably would have played in any case.

But are tournaments really –EV? (Poker lingo: EV is Expected Value, so –EV is a calculation, or assumption, that a particular act would lose one money if repeated an infinite number of times. I need to add this to my list of abbreviations on the right.)

Here's my thinking, as it applies to the multi-player tournaments on PartyPoker. It applies more strongly the lower the buyin for the tournament, since a $20 buyin will attract worse players than a $100 buyin.

The key is this: Anywhere from a third to a half of the field has no realistic shot of getting into the money!

Those of you who've played in these tournaments will no doubt agree. Without a serious run of lucky cards that lasts until everyone left is in the money (which does happen sometimes), these players will make too many mistakes to have a real shot at getting to the end. Especially in no-limit, where often you only get one mistake.

Let's assume that 1/3 of the field is dead money. If everyone that's left is of the same skill level, then they should place in the money an equal amount of time, effectively splitting up the dead money and paying the entry fee to the house for the privilege.

If it were true that the, umm, not-dead money (live money? undead money?) was all of equal skill, then tournaments would be +EV for all of them, unless the house charged an entry fee greater than 1/3 of the buyin.

Of course, they aren't of equal skill. I expect, then, that the "undead" players would scale. At the bottom end, players get into the money just often enough to keep playing, but are overall tournament losers. A bit above that, are the players who break even in tournaments, and the entry fees are the difference between being winners and losers. And the whole area above that, probably around 30% of the field, are winners. They might not win today, but they win more than they lose, and each tournament is +EV because of it.

There is a difference here between live tournament play (the circuit) and online tournament play. This article which Iggy provided a week or so ago details one of the problems of being on the circuit. One isn't responsible only for one's buyins, but also for travel expenses, hotel rooms, and the like, which eat into one's winnings horrendously. So even a large segment of this upper echelon, in live poker, isn't making money.

This isn't true in online tournaments. Here, the only expense you have is the loss of whatever you would have made in your ring-game play when you were in the tournament instead. Live-game players face this too, of course, but online, a tournament takes at most five or six hours.

My conclusion is this: If you are among the top 30% of tournament players online, tournaments are +EV. If you're not, tournaments are –EV. I put myself at the lower end of that 30%, because of the final-table appearances I've had, cashing in some and qualifying in others. I haven't played as many cash tournaments as qualifiers lately, but in the qualifiers I've won one and bubbled another out of the eight or ten I've played in the last two weeks.

My thought here is that I should be playing more tournaments. However, I want to stick to my original plans regarding tournaments: that I won't play until I've made my nut for the day. This morning, there's a $50+5 NL tourney at 3; my plan is that I'll enter if I'm up $250 by then. Currently, I'm up $20, so it's a long shot, it seems.