A question of economics

Published by trickyrock on

I was asked a question by Micky McCool, that is interesting enough to warrant a whole article. Micky is a good friend who I had been chatting to in Galway, who asked this question to me:

Stuart, we both spoke briefly in Galway on financial issues with regards to the British Pound’s demise. How will this effect the recent poker boom in England, how will effect young players trying to progress and how will it effect British players trying for glory in Europe with the bigger comps?

My answer

I personally don’t feel that the alarming drop in the pound will affect the game of poker to quite the same extent that it will other businesses. Although European tournaments have sudddenly become more expensive, the prizes of course will rise accordingly. The effect for English players is basically that in European tournaments, there is even more at stake.

However, this is a difficulty in itself, as the effect of a luckless run will be more shattering. This is a real shame in regard of the EPT, which was already such a high priced tournament. With the EPT events this year now costing little short of £5k (or £8k for Copenhagen, and £10k for the Grand Final), they represent a gigantic gap from the regular circuit of tournaments that are played in England.

Save for the odd event like the GUKPT final(£3k), it has always seemed a strange thing to me that there is such a wide financial gap, in that no regular tournament offers anything in between a £1k buy-in and £5k buy-in. With prices so high for the EPT, we have a situation where even the satellites are over-expensive, and an impossiblity for most levels of player.

To me, the EPT’s very skewed pay out structure means that only three things can happen. Most likely, you lose your substantial buy-in every event you play. If you finish in the bottom half of the cash, you essentially just get your money back with all the anticlimax of those scratch cards that give you just another free spin. For the lucky few that finish in the top 10 or 11 of the mammoth fields, there are massive prizes. If we have an English winner at the next Euro event in Deauville, he would win ridiculously big, almost too big.

This bleak outlook means that it is important that people play these events only if they assume that they will not be visiting the cash out desk, and can face this disappointment without facing large damage to their bankroll. I think it is an important time for alot of players to reinforce their bankroll management, and make sure they devise a system where they cannot not end up blaming a combination of tough economic times and bad luck.

Our chat in Galway was interesting as I think there are a few guys who assume that they have to turn up at every poker event, and save the counting of the cost for afterwards. Hopefully the pessimism of the credit crunch will help them realise that tournament poker demands alot of financial care, and that if they do travel, they don’t necessarily have to stay at the most expensive hotels!

Back to the poker, I don’t necessarily think that this wide gap in tournament buy-ins is a bad thing. Many people have expressed concern about the EPT becoming just an elite event, as if this is a bad thing. However, there is no need for every player to be allowed their shot at it, and I think the tour will gather alot of interest if we are seeing the same group of players regularly contest these highly respected events. What poker lacks in comparison to other sports is that there is little sense of a regular tour or ranking system. Elitism is a natural thing in sports- not everyone can have a race round an F1 track or take a stab at Premiership football when they fancy it- and so it is something that we should welcome into poker.

Every poker player can only play a finite number of tournaments, and so there will be one positive effect if English players are less able to venture into Europe. The English poker tours will continue to have good numbers, and attract the highly regarded English players. Someone like Sam Trickett is such an exciting talent that he deserves a shot at the EPT, but if massive buy-ins and rip-off hotel prices keep players like him on English shores, the English tour will have a welcome reinforcement. After all, the poker calendar is now so packed that there really is little need for even the most regular player to jet off to mainland Europe.

The changing state of poker, however, is bringing a piece of news far more concerning for the established player. The standard of play has increased considerably, and this effect will only sharpen over the course of the year. There is one group of players that I fear for most, and that is the “old school” players. For guys that have been successful for many years, it is difficult to find the humility to realise that their game is no longer amongst the best. Many of these players will still be better than the average tournament player, but to a degree so much smaller that a bad run of luck could bring unexpected damage.

The wisest of these players will realise that the era of the internet donkey has been turned on its head, and will be prepared to learn the skills that the best new players are bringing into the game. However, for every wise man, there will be a stubborn one.

Judgement is a difficult thing in poker, as it is clouded so heavily by the issue of luck. I fear for the guys whose judgement is not sharp enough to realise that it may be their skill, rather than their luck, which has fallen behind the game. We were chatting particularly about a few guys who are strong players, but whose bad luck has brought them problems. I really hope these guys can take stock, and realise that they don’t have to be at every big poker tournament. Sponsorship may soon become a gift of the past, economic times are tough, and I really hope that a much better understanding all around of how to play the game can be followed by a much better understanding of  bankroll management.

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pam · January 10, 2009 at 10:32 pm

“If we have an English winner at Deauville, he would win ridiculously big, almost too big”.
Interesting line in a very interesting and well-written article.

What do you mean by too big?
People outside the game of poker might argue that any win that looks like an annual salary, or even a fraction of an annual salary, is arguably too big.
Those inside the game would presumably counter this by saying that a single win has to be funded by several tournaments in which no cash is won.

If a sponsor puts up a prize for a competition, the size of the prize can be the subject of endless debate. But the size of the prize pot in poker is determined by the number of players and how big the buy-in is, so, if we assume that everyone is using sensible bankroll rules, those who enter can all “afford” to do so and the winner beats that group of peers, playing at a certain level of the game, to take the money.

But are you suggesting, maybe, that the structure of the prize distribution should be different? that fewer players get the equivalent of the “free spin”, more get a sizeable amount and those at the top don’t therefore hit the jackpot quite so spectacularly?

Is that what you mean by the skewed pay-out structure. Ideally, would you change it?

And does that hold only for EPT, or would you change the structure for domestic tournaments (to borrow a football expression) ?

I’d be interested in your comments.

Mick McCool · January 11, 2009 at 12:54 am

Incredibly good post Stuart, your knowledge put lots of us to shame.

I think we will see added numbers at the English Tours (GUKPT & GBPT if Gala continue) this year as you pointed out, however l do believe you will see less New Talent emerge and a much quicker turnover of the dabblers as the recession bites deeper into the economy.

Your last paragraph is excellent and l must embarrass myself by admitting that it took me 2years to fully understand BM and 8months after that to actually put it into practice. I daren’t think how much this has affected my game progression, both mentally and financially, but l have to get on with it.

Lots of circuit regulars will dissapear this year, Jesus, l might even be one them!


trickyrock · January 13, 2009 at 12:14 am

Thanks Pam, for a very relevant question. The line you cited “he would win ridiculously big, almost too big,” is an interesting one, as I said it not so much for a poker reason, as much my emotions about the issue.

To understand the poker reason, here is the kind of decision an organsier will have when putitng together a prize structure. What kind of difference would it make for the bottom 20 people in the cash to win a 11k Euro prize from their 5k buy-in, rather than an anticlimatic 6k? I would say quite a substantial one. What difference would it make for the winner to walk away with a ridiculously big 800,000 Euros for getting lucky in a game of cards, rather than a slightly more ridiculous 900,000? I would argue that there is no difference.

I think a number of players would welcome a better balance in the pay-out structure, but there is one reason why it may never happen. Headlines can only be short, and do not have time to explain balance, only to exclaim gigantic winning prizes.

The EPT structure is no more skewed than our domestic tournaments, but the obscene amounts of money mark the difference even more. You hint at something very important though, and that is that it is not just the amounts of money at stake at the EPT that take some time to fathom. Every couple of weeks in this country, a tournament takes place that offers a winning prize that the outside world would find difficult to believe. It should not take something like the EPT for the budding poker player to challenge his own thoughts on money, but a much more humble occassion. Many would, and others should, think carefully when they move up from their regular £5 game at the casino to take a stab at the £10.

I love the game of poker, but where the headline writers get excited about the amount of money going to the winner of the biggest events, I find it difficult to digest. There is just no need for anyone to win THAT much money. The idea of playing poker for a living is a dangerous thing, but is still a possibility for a small talented group. The security of the job would definitely be helped if it offered a more regular chance to turn a decent profit, rather than the unlikely dream of a goldmine.

trickyrock · January 13, 2009 at 12:28 am

Hey Micky,

Thanks for your thoughts. I agree that the recession will inevitably affect the game in this country. I see the way money changes hands in poker as being like a pyramid, which relies on its massive bottom tier. The game is funded by the vast majority, who are willing to spend a little spare money to enjoy their hobby. With spare money becoming tighter, the effect will be felt all the way to the top.

It’s a shame; in brighter times I think the game would still be growing sharply in England, as it gains credence amongst the public all the time. I think the two effects will balance out for GUKPT numbers to remain steady, but I’m not so pessimistic about the new talent.

How about a friendly wager? I will bet you that there are at least two winners of the GUKPT who a) are under 25 and b) are not names that either of the two of us would recognise now. Loser has to turn up to the Grand Final in a suit. What do you reckon?

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