EV & ROI with their magical white tiger, Markup, about to ask you for WSOP backing. Or Halloween candy.
Image source: Gina Lee Photography.

A National Public Radio Planet Money series a couple weeks back about the poker economy is finally prodding me to finish off this article, that got started just before last year’s WSOP Main Event. It’s a controversy! It’s a math problem! It’s sure to make people mad or upset! (I apologize in advance for some of the language.)

https://twitter.com/limonpoker/status/438909857236647938

Like most things these days, it started on Twitter.

Limon

Abe “Limon,” host of Live at the Bike‘s #PokerSesh, hasn’t exactly hidden his disdain for poker tournaments, poker tournament players, or poker tournament players charging markup on action they sell so they can play poker tournaments.

In fact, what brought me and Limon together was a blog post I wrote that ended up on Deadspin (no link, because the bastards still haven’t paid me the $50 they owe me after two years Barry Petchesky at Deadspin saw one of my occasional complaints on Twitter in 2018 and managed to get me paid—plus some—so al is good) and spawned a TwoPlusTwo NVG thread. He invited me on his show back before it was hosted by LATB, had me back for the first LATB show, and I’ve been on a couple times since.

The article elaborated on a Card Player column by Bryan Devonshire about how you can probably make more money playing $1/$3 NLHE than as a tournament specialist in the US, bolstering Limon’s contention that most tournament players are losing players and that the reason there’s such a marketplace for staking, sharing, and swapping (jeez, it sounds like the ’70s all over) is because people are continually on the verge of financial oblivion. After all, if you have good bankroll management, why would you need someone else’s money? As Vinnie Pahuja said on the Two Plus Two PokerCast a couple of years ago: “…the majority of the MTT world is backed, because it’s just — the amount of money you really need to play the circuit or play MTTs full-time… most of us are not playing with enough money….”

Both Limon and I got lots of pushback from tournament players (unlike Limon, I am a tournament player), but not only is Limon a more—let’s say outgoing—person than myself, but he’s got years of cash game experience, he’s been on TwoPlusTwo forever, and he’s the kind of guy who would show up at a $5/$10 PLO table with $100K (plus a little) as a teaser to promote a new game at The Bike. I can give you a lot of reasons why I’m not that guy. So, while after writing my little article I continued playing tournaments and writing more little articles, Limon kept up some good-natured harassment of/ranting at any tournament reg who lipped off at him. Limon doesn’t care, he can get stung a thousand times, he doesn’t give a shit.

The gray chips on the right are $1K each.

Anyway, about this time last year, a running conversation was happening on Twitter between @limonpoker and a number of others (but mainly Justin ‘@stealthmunk’ Schwartz) about expected return on investment (ROI) in the World Series of Poker Main Event (Schwarz went on to place 14th in the Main Event, as you may remember).

Some outlandish numbers were being thrown around by Schwartz and others about expected ROI. On a #PokerSesh in mid-July, after most of the Main Event had played out, Limon said Schwartz had claimed months earlier that there were at least 400 players in the Main Event whose average ROI was 300%.

https://twitter.com/THAKID113086/status/581904603408629760

When Limon asked my opinion about it a couple weeks later (he also talked to David Sklansky and @realbigbadbabar), I had to agree that claims of expected value in tournaments were vastly inflated.

Schwartz never agreed to the bet, but LA player Bryce ‘@SuddenlyBryce’ Yockey did.

Gentlemen, Place Your Bets

The bet was for $5K. Full disclosure: in exchange for some research, Limon gave me 5% of the bet (that’s more than five unpaid Deadspin articles, in case you’re counting see note above). The terms went through some finessing in the couple of months leading up to the Main Event, but the essence was that Bryce could pick a slate of 100 players in the Main Event. To win the bet, Bryce’s players would have to make an ROI of 150%: they’d need to cash for a combined sum of $2.5M ($1M for the cost of their buy-ins, $1.5M in profit). Because the slate of players would have to be picked before the Main Event began, each player who could be verified as not having played would take $25K off the target of $2.5M. And oh, he couldn’t pick Phil Ivey or Daniel Negreanu for the slate.

Meanwhile, Limon kept hustling for more takers. And needling Schwartz.

https://twitter.com/limonpoker/status/609522887624503296

By starting day, the list was set.

A number of the players had individual live tournament winnings of more than $2.5M. Eight of the top ten Hendon Mob All Time Money List players were in the group (with restricted players Negreanu and Ivey missing). Four were Main Event champions, and two others have won $2.5M in a single non-high roller event. So it wasn’t exactly a group of slackers.

Day 1: 100 Players?

On Day 1A, eleven of the players took to the field, with four falling on the first day of the challenge: Asmus, Duhamel, Griffin, Holz, Kim, Quoss, and Sands went on to Day 2. Klodnicki, Lichtenberger, Mo, and Seidel were out.

Day 1B got 30 entrants from the list, with Charania, Chidwick, Hutter, Katchalov, Kurganov, O’Dwyer, Schorr, Seiver, and Smith failing to make the cut.

Day 1C saw 43 entries by selected players. Out of this group, the early exiters were Antonius, Buchanan, Elias, Greer, Gregg, Jacobson, Kuether, Merson, Polk, and Volpe.

Players Eliminated On Days 1A, 1B, and 1C

Would like to buy some WSOP ME action since I won't be able to play myself. Willing to pay big premium, pls send DM/WhatsApp.

— John Juanda (@LuckBoxJuanda) July 5, 2015

Not playing the main @wsop I just can't deal with 2 hour pushes, cards unfit to deal, and a nasty attitude from half the staff

— Bakes (@DMBakes) July 4, 2015

If you’ve been keeping count, you’ll notice that’s only 83 players. Some, like Juanda, didn’t make it to the show. Baker was unhappy with cards and conditions at the Rio and didn’t play. I was able to confirm several as no-shows, and anyone I couldn’t find in WSOP reporting, we counted as not having played. Seventeen players in all at $25K each, bringing the target all the way down to $2.075M.

Players Who Didn’t Play

Day 2: 60 Players

Still, 60 players made it through to Day 2, with Dominick Nitsche, Fedor Holz, and Steve Gross all over 100K in chips. 28 of them started on Day 2AB, with 15 out before Day 3. Another 32 headed into Day 2C, with 17 out. 50%+1 eliminated on both Day 2s. These players were far easier to verify: anyone showing up on End of Day 1 chip counts who didn’t appear on EOD2 counts or seating for Day 3 was off the list.

Players Eliminated on Days 2AB and 2C

Only 28 players were left—about a third of those from the list who’d entered—and we weren’t even to the money yet. The 2015 WSOP did have the advantage for players trying to make the money of paying out $15K to over 300 players between the historical 10% payouts and the magic number of 1,000. Day 3 started with about 1,800 players.

Day 3: 28 Players

Players On Day 3

10 of the 28 were eliminated before the money (names with strikeout); Benefield, Kalas, and Silverman went out before the end of day, but made the minimum cash of $15K. Really, it would have been better for Bryce if they just hadn’t shown up, because then they would have been worth $25K.

$45K in actual earnings and the rebate for selected players who hadn’t entered the Main Event, meant the goal was now $2.03M. With 15 players remaining, they needed an average cash of more than $135K to make the goal. The payout tier for 46th to 54th place netted $137.3K, with the tier below at just $113.8K.

Needless to say, there was a lot of virtual evil rubbing of hands going on at our end of the bet, though we did work up a bit of a sweat during Day 4 when Fedor Holz and Stephen Graner were both in the top 10 chip counts.

Day 4: 15 Players

Players On Day 4 and Chip Positions for Start of Day 5 (237 Remaining)

9 players cashed on Day 4 for $190.4K. Total. $21,159 on the average, rounded up. Still less than the $25K Bryce got spotted if they hadn’t shown up (Stephen Graner was the only player to cash for more than $25K for the day). Only six players remained, with $1,839,571 to go to make the goal. If one of them could make it to 6th place, the other five would only need to make twice as much as the 12 players who’d already cashed.

Day 5: 6 Players

Day 5 of the Main Event took the overall field from 237 to 69. Antonio Esfandiari, Christian Harder, and Dan O’Brien all cashed for $40,433. The three players remaining—Fedor Holz, Steve Gross, and Justin Bonomo—needed to win nearly $1.72M for Limon (and me) to lose.

Day 6: 3 Players

Day 6 gave us a bit of a scare. A player named David Peters showed up in fourth place in the chip tally. I’d eliminated his name on Day 2AB because nobody with that name showed up on the EOD3 report. Limon confirmed with Bryce that it was, indeed, a different David Peters in Day 6. Why he suddenly appeared out of nowhere, I don’t know. The WSOP reports aren’t perfect; that there hadn’t been any David Peters at one point appeared to be just a clerical error. The only “Peters” on the Start of Day 4 list is “St. Petersburg” as a hometown for a bunch of Russian players. Then “David Peters (CA)” is back on for Start of Day 5.

Justin Bonomo was the first out, in 64th place for just about $96.5K, less than an hour into the day. More than three hours went by before Steve Gross was done in 47th, for $137.3K. That meant 82 players accounted for a total of $590,473 in winnings (an average of $7.2K), leaving a lot of heavy lifting for Fedor Holz, the Last Pick Standing, to win the bet. With a target of $2.075M ($2.5M less $25K for each of the selected player who didn’t enter the Main Event), Holz would need to win $1,484,527: at least 5th place. 6th place paid $1,426,283, more than $60K short of the goal.

Day 7: Fedor Holz

Now, I don’t doubt Holz’s abilities as a poker player, but with more than 45 players left—including a number of other very good players—I was feeling pretty good about our chances. Holz had started Day 6 44th of 69, two thirds of the way down the tally. Starting Day 7 in 19th of 27 was essentially the same relative position. Instead, he went out in 25th place, 100 minutes into the day, for about $262.6K. It was almost half what all the other picks had won, but not enough.

Non-Players Come to the Rescue

All told, of the 83 players Bryce picked who played the Main Event, 18 of them cashed, an aggregate 21.7% ITM. They made a total of $853,047, between 9th and 10th place money. The average cash was $10,275, so as a group, they made their money back, but only at a rate of 2.75%, nowhere close to the 150% ROI that was the line for the bet, or the fanciful 300% ROI swirling around in last spring’s run-up.

Combined with the amount spotted for non-participants (who were all assumed at an average 150% ROI for $25K), the selected players made $1,278,047, barely half the amount needed to win the bet for Bryce. Individually, just 7 of the 83 players who entered the Main Event had individual ROI of better than 150%, less than 9% of the a group drawn from some of the most elite players in the world. Given that small percentage, the $25K allowance for the non-players was exceptionally generous; the amount the non-players made accounted for a third of the money “earned” by the selected players.

The Future

I’m fairly sure Limon’s up for the opportunity to take someone else on for this one in 2016. He said on #PokerSesh that on second thought, he might not have ruled out Hellmuth or Negreanu as selections. Even with Negreanu’s deep run (Hellmuth made $21.7K for 417th), having them in the mix wouldn’t have affected the outcome: Negreanu made $526.8K for 11th place; adding his and Hellmuth’s winnings to the money earned by the rest of the picks barely cracks $1.75M, much less $2.5M.

Substituting Negreanu and Hellmuth for a couple of the no-shows and calculating just actual winnings would have earned an average of $15.9K per player, a 59% ROI for a stable made up of 85 of the top players from around the world and including two players who made it into the final three tables of the Main Event. something only 0.4% of the entrants managed to do.

Something to keep in mind the next time you get asked to pay markup on buying some action.