Monday, June 19, 2006

How Poker and Poker Tournaments Work

How does this whole Texas Hold 'em thing work anyway? If you're familiar with hold 'em and the way tournaments work you can skip this section. For those of you who don't know how Texas Hold 'em works you can check out the following link which has a brief description of the procedures as well as a few pictures to help you figure it all out.

You'll probably need to refer back to this link to understand a good deal of what I'm saying in my daily updates. Once you've got that down it's important to understand the way poker tournaments work. In many poker games people play for cash. In those games players can come and go whenever they chose and if they run out of chips they can simply buy more. In a tournament, however, once you've paid your entry fee you're locked in and if you run out of chips you can't buy more and are eliminated from the tournament.

Lets look at a simple example which will illustrate a few of the finer points. Imagine you have 100 players who each buy into a $100 tournament which gives us a $10,000 pile of money. In return for this $100 entry fee the players each get $1,000 in tournament chips (tournament chips are always referred to in units of dollars, but they're not actually worth anything; they are just betting units). In a situation like this the blinds might start at 10/20 (meaning a $10 small blind and $20 big blind). After 20 minutes of play the blinds might be increased to 20/40 and then to 30/60 after another 20 minutes and so on. After a while those 1,000 chips each player started with don't seem like so much and eventually are forced to put all their chips at risk on a single hand. If a player runs out of chips he or she is eliminated and leaves the tournament. Now it's time to split up that $10,000 pile of money we started with. First and foremost the casino or whoever is running the tournament takes their piece of the pie off the top (usually around 10%). After "the house" takes their $1,000 fee we're left with $9,000 which gets split up amongst the top 10 finishers. The tenth place player would normally get about $150 gross ($50 net). Not too exciting after beating out 90 other players, but much better than 11th place. The first place player would usually get about $3,500. Pretty sweet for a $100 risk. The other eight places would be somewhere in between with each place paying slightly more than the previous.

Sometimes when there are only a few players left (usually less than 5) the players will agree to split all of the remaining prize money based on how many chips each player has. In our example Let's say 1st place is $3,500, 2nd is $2,000, and 3rd is $1,500. Player A has 50,000 chips and player B has 40,000 chips and player C has 10,000 chips. Assuming all the players are of equal skill Player A has the best chance of winning because he has the most chips and player C has very little chance of winning (and not much chance of getting second either) with player B somewhere in the middle. But, crazy things happen all the time in poker and maybe the players want to lock up their profits and avoid the stress of playing for big money. If they agreed on a deal based on chip count player A would get $2,750, player B would get $2,500 and player C would get $1,750. Players A and B get MORE that 2nd place money and player C gets a little something extra when he's probably toast anyway. It's easy to see why deals are attractive. I play tournaments of this type every day. On the internet you can play tournaments with buys ins ranging from as little a 10 cents to as much as $5,000 and every amount in between. And in person you can play tournaments with buy ins between $10 and $50,000. Anyone can play in 99.9% of these tournaments, they just have to put up the money.

WSOP tournaments work just like my example except instead of 100 people putting up $100 each, you might have 1,000 people putting up $2,000 each. In a situation like this 1000th place to 101st place would pay nothing. 100th place would pay around $2,200, 10th place might pay about $25,000 and first place would pay about $500,000. You can get a sense of what the other places might pay and it's easy to see that you really need to go deep into these tournaments to be successful in the long run.

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