Tournaments are great for the game of poker. They bring together many people who are interested who are able to play without concern of losing a lot of money, and have the chance of winning a big prize at the end. ESPN’s coverage brings excitement to the game and makes more people want to be a part of it. The distribution of prizes to 10%-15% allows many people to have a positive experience and keeps them coming back to play in more tournaments. Some of these players play in the cash games I play in, which creates many more games and is great for me. This is the reason I usually travel to Atlantic City, Las Vegas and other places for the big tournaments.
I am often asked if I have played or planning to play in the World Series of Poker, and when I respond that I don’t play many tournaments these days, people ask me why. It is normally to tough to explain in a few sentences, so here is the complete explanation:
The main reason I don’t play tournaments is because over time, I think I will make more money per hour playing cash games. I know the rate that I can win at playing in cash games, and roughly the rate I can win at playing tournaments and I prefer to get paid more per hour and to reduce the variance inherent in tournaments.
Tournaments have an incredible amount of volatility build into their structure. The payouts are extremely top heavy, precisely at the time when stacks are shortest and the amount you can do is limited. These factors lead to a lot THE MOST variance in the results compared to all other forms of poker.
For example, if you play in a $1000 buyin tournament with 1000 players, 1000 times(this would take you ~3 years if playing every single day) with a return on investment of 50%. After 3 years of playing every day, you would expect to win $1.5 million($500,00 of which is profit). Not bad, right? Not exactly, and the problem is that your sample size is not nearly big enough.The total number of times you would be in the top 10, assuming you are 50% better than the field is 15, over the course of 3 years. Considering prize payouts for the top 5 spots would be $220,000, $132,000, $80,000 $67,000, and $55,000, one time where you come in 5th instead of 1st costs you $165,000. Now, if you are looking to make on average $167,667 a year($500,000/3 years) that loss of $165,000 really stings! With a sample size of 15, if you are unlucky a few times in the wrong spots, you can not make any money for several years. Note that that one 5th instead of a 1st in the tournament drops your return on investment by 1/3 from 50% to 34%. If you want to know how easy it is to experience variance in a sample size of 15, try flipping a coin 15 times. Essentially 3 years of playing every day can, and will, come down to how you do in a 15 time sample size where variance is high and playability is low.
After several hundred hours of playing cash games, it is easy to know how I stand relative to the other players skill wise and am able to narrow down my hourly rate to a reasonable confidence interval. In the above paragraph I showed that after 3 years of playing tournaments, you would still not have any idea of your return on investment. Noah Stephens-Davidowitz has done some excellent using different return on investment and variance among tournament players. http://www.nsdpoker.com/2011/01/mtt-pros/.
The other reason I don’t play tournaments is because of the inflexibility. I must be at the casino ready to play at the time designated, whether I feel like it or not. I am going by someone else’s schedule, and the ability to not do that is one of the reasons I enjoy my job so much. I cannot chose when I stop and start playing which is an important edge that separates me from the competition. I often play a long time when I am winning and am feared at the table, and stop when I am not doing well and my image is poor. Most players play a long time when losing and stop quickly when winning, which is the exact opposite of what you want to do. I play in games when I am feeling well against opponents who generally play worse than I do which is a good recipe for success.
Tournaments do not allow me to apply some of the other skills at which I excel. In tournaments, your seat and table are assigned and cannot be changed. I cannot leave if my game is not good or move to a more profitable seat or a more profitable table. The ability to change tables and sit in good position relative to bad players is very important to long term profitability and can be a big advantage in cash games if done correctly.
While there are small adjustments that you can make deep into a tournament, many actions, especially when your stack is small, are automatic. As Tommy Angelo has much more eloquently stated in his discussion of reciprocality, the difference between what you do and what your opponents do is what allows you to make money, and if situations become automatic and there is less room for your skills to become applicable.
I have played single table tournaments, multitable tournaments(like on ESPN) as well as many forms of cash games throughout my poker career and I have determined that the benefits of playing cash games (mostly no limit hold’em, pot limit omaha and omaha eight or better) outweigh that of tournaments. I still do play tournaments from time to time, either because I have a yearning to play or because one piques my interest. I think the decision to concentrate on cash games is fairly clear cut for me at the moment but I am always evaluating my options.