The Truth about Brick-and-Mortar Tournaments
Poker players pride themselves on being the only gamblers that can rationally expect to walk away from a casino a winner. This is because poker is the only form of gambling spread in a casino in which the action takes place against other patrons, not the house.
There is a form of casino poker that shouldn't have players riding high and mighty on the anticipation of an expected profit. This form is small buy-in poker tournaments at brick-and-mortar casinos. There are three reasons why these sorts of tournaments are frequently not much more than a glorified game of bingo.
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First, brick-and-mortar tournament fees are often too high. To win at poker, you need to not only be able to beat other poker players, you need to beat them enough so that you are also a winner after any fees you pay the poker room. When the poker room's fees are very high, it's extremely difficult to walk away a winner, even if you are the best player at the table.
A certain percentage of a tournament buy-in is withheld from the prize pool as a fee for the administration of a poker tournament. Typically, online tournament fees take away a little under 10% of the prize pool. In contrast, brick-and-mortar poker rooms charge fees that generally gobble up well over 20% of the prize pool. This is due to the increased costs brick-and-mortar poker rooms endure when running a poker tournament.
Online players are accustomed to seeing this fee expressed as a separate integer. For example, most online tournaments with a buy-in of $100 have an entry fee of $9 and are advertised as a $100+$9 tournament. Besides the $9 entry fee, all of the players' money goes towards the prize pool.
Buy-ins for brick-and-mortar tournaments are rarely advertised with two clearly distinctive integers. Consider, for example, a weekly tournament spread at the Mirage in Las Vegas. The tournament buy-in is $130. Since casinos do not like to make it clear how much of the buy-in is retained by the house, one might have to do a little prodding to discover that a whopping $33 from that buy-in will never see the light of a participant's payout. If this tournament were to be advertised as a $97+$33, which is what it is, you can bet no value-oriented poker player would be participating. Similar to blackjack, tournaments like these have no value outside of raw leisure.
One trick casinos use to squeeze a few extra bucks out of the prize pool would go completely unnoticed to anyone skipping over the fine print on the tournament handout sheet. Consider a popular weekend tournament held at Bellagio in Las Vegas. On their website, Bellagio boasts a $1,000+$60 buy-in which is reasonable by nearly all standards. Nowhere on their website do they mention the percentage of the prizepool that is "withheld for staff." That information is only found in very tiny letters on a poorly-distributed tournament information sheet. Those tiny letters inform players that 3% of the prizepool is withheld for staff. Suddenly the Bellagio's completely reasonable buy-in has become a less appealing $970+$90.
Tournament structure is another variable to consider. Remember, brick-and-mortar poker is only profitable if you succeed in beating the other patrons. In order to extract an advantage over the other poker players, you'll need some maneuverability for your superior skills to shine through. Unfortunately, the structure of most small buy-in brick-and-mortar poker tournaments result in too much emphasis placed on luck.
To give an example, Wynn, one of the nicest casinos in Las Vegas, offers a $105+$25 sit-'n'-go tournament. Let's ignore for a moment that the 19% entry fee makes this tournament, at best, only marginally profitable before the first card has even been dealt. Players receive 1,000 starting chips. The blinds begin at an already intimidating 25/25. With just fifteen minute levels, it will only take a half-hour for the blinds to reach 50/100. This abominably awful structure is all too common in small buy-in casino tournaments. With structure like this, having superior skills over the playing field is rendered nearly meaningless. There is little skill necessary when the only decision to make is all-in preflop or fold.
Finally, an additional tax is thrown at anyone who wins a substantial amount of money in a tournament. Although technically optional, tipping the dealers after winning a big payout is expected. Keep in mind that many tournaments already withhold 3% (or so) for "tournament staff" (i.e.: dealers). In order to rest easy knowing tournament officials don't judge you as a "cheap ass," you'll want to cough up another 2-4% of any significant payout as a tip to the dealers. Showing generosity to casino employees upon a significant payday is certainly commendable, but nonetheless, another way in which your bottom line becomes smaller.
Squeezing out a profit from playing brick-and-mortar tournaments is challenging. Some brick-and-mortar tournaments have good structure and reasonable fees, which enable them to be +EV for good players. The large buy-in multi-day tournaments, such as the WSOP, generally fit into this category. However, most small buy-in brick-and-mortar tournaments do not.
To further emphasize the ridiculousness of brick-and-mortar tournaments, let's not forget that the goal isn't to just squeak out a profit, but rather to win a significant amount of money. Let's say you are able to overcome all of these obstacles and edge out a 10% return-on-investment from most brick-and-mortar tournaments. In terms of hourly rate, you still are not doing as well as a sixteen year-old that works at McDonalds. With a 10% ROI, you'd be making $30 per tournament from events priced at $300. Think about it, even if you could somehow play 5 of these per week, you'd still only be making $7,800 a year.
The lesson to be learned in all of this is that playing tournament poker in casinos sometimes isn't much different than playing blackjack--a -EV but potentially fun way to spend an evening, provided you do not gamble above your means. Most brick-and-mortar poker tournaments should be viewed in this light.