The Cost of Playing Live Tournaments Is More Than You Think

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Before I begin let me preface this column by saying that my intention is not to dissuade you from playing in live tournaments, but rather to give you a complete understanding of the amount of money it costs to play live events, and specifically how much it costs to travel the circuit and make a living playing live poker tournaments.

Live vs. Online Cash Games

Given the choice I choose live poker over online poker 100% of the time when it comes to cash games.

Personally, and this might not be the case for you, I love the human interaction and the added dimension of body language, tells and psychology. Whatever advantages I get from playing online (rakeback, no tipping, reduced rake, multi-tabling, hand histories on demand) just isn’t enough for me to choose online poker over live poker.

When it comes to live poker cash games vs. online poker cash games, live poker wins in a bloodbath in my opinion.

Live vs. Online Tournaments

That being said, this is definitely not the case when it comes to tournaments.

If the following things were not a factor I’d choose live tournaments, but the following factors tip the scales to online tournaments.

First, live tournaments are not only marathon affairs, but they also cost an arm and a leg in fees and expenditures. In fact they cost so much I’m of the opinion that it’s near impossible to make a living playing live tournaments.

Don’t get me wrong, live tournaments are beatable (I’m not trying to tell you the daily at your local casino is –EV, or that it’s impossible to show a profit playing in events from a major poker tour near your home), what I’m referring to are people that have to travel to events across the region/country/world. In the current poker economy I would be surprised if more than 2% are long-term winners.

When it comes to live poker tournaments vs. online poker tournaments, online tournaments are the clear winner for me, and here is why.

Tournament Fees

Let’s talk about the rake in live tournaments.

The average rake in a daily tournament at a casino is going to be somewhere between 15% and 20% of the buy in, which is at least 1.5 to 2x what you’re paying in online tournaments. You’ll be hard pressed to find a live tournament with a rake of less than 10%.

Even in larger tournaments, with higher buy-ins, the rake is absurdly high. I’ll use the WSOPC as an example, but this applies to most tournament series.

The WSOPC uses three main buy-in amounts:

• $300+$65=18%
• $500+80=14%
• $1500+175=10.45%

While the rake % does get progressively smaller, it never gets below 10%, and I would make the case that a 15%-20% rake is an impossible number to overcome and make a living off of –I’ll go into greater depth on this in just a bit.

Tips

Another live-only expense is tipping.

When it comes to tips, whether you want to tip or not, they are already taking out a significant chunk of the prize-pool (generally about 3%) on top of the tournament fee as a “tournament staff fee,” so you’re tipping no matter what. You can see how this works by scrolling down to the bottom of the WSOP structure sheet.

However, most players leave a little something on top of this when they make a big score, and as a PSA in many cases that 3% fee doesn’t go to the dealers but to other staff, so you should tip.

It may not be fair to you, but it’s even more of an injustice to stiff the dealers.

So on top of the 10%-20% in fees you’re paying, you can add another 1%-3% in tips.

Food

One of the added expenses when you’re travelling is not having access to your refrigerator and cabinets, so you end up ordering and eating out a lot. Even the most frugal among us (taking advantage of the hotel’s continental breakfast, using a food voucher from the casino, and maybe hitting the deli for meal #3) is still going to be paying more than they would at home.

When you factor in drinks (which even if they’re free you tip the waitress for) and snacks, you’re going to be spending at least $20 a day on food.

So figure between $20 and $100 a day in food depending on your eating habits.

Travel Expenses

Furthermore, whether you drive from stop to stop or fly, the money you spend on gas, airfare, taxi rides, and hotel accommodations adds up pretty damn fast.

It’s hard to quantify, but it’s going to be at least another $20 a day and can easily swell into hundreds of dollars per day.

The counterargument

Whenever I bring these things up I always run into someone who tells me how they don’t tip in tournaments; how they will prepare their own food and bring it; and how they will save every receipt from their travel expenses to use as a tax write-off –and not all write-offs are 100%, some, like food, are partial deductions.

Sure you are, and I’m going to go to the gym every day for an hour and make constant gains throughout the year without a single slipup.

Yes, you can write off a whole bunch of things, like car mileage (which is about $.50 per mile) being careful to split between business and personal use of course, and more importantly, this is only possible if you file your taxes as professional poker player, you can’t have a regular job.

There is quite a bit of fine print when it comes to deductions and taxes.

A hypothetical player

Ok, enough with the breakdowns, let’s make this crystal clear by taking a look at what a hypothetical tournament player is going to spend on live tournaments.

For this example I’ll use a player who plays one tournament every day, 300 days a year, with an average buy-in of $300. And we’ll make our hero a really good player to boot, with a 35% ROI on his buy-ins.

Additionally, our hero is also frugal, he picks events that are within driving distance (an average of $20 per day in gas); events that don’t require hotel stays unless he makes the final table; and he only plays in tournaments where the rake is closer to 15%. Our hero also is stingy with food, spending a mere $20 a day on average.

So, for every $300 spent his expenses are:

• $45 in tournament fees
• $20 in gas
• $20 in food
• $5 in tips throughout the day
• 1% of winnings for dealer tips, or about $10 per event played

Our Hero is paying out $100 per tournament in expenses (and remember this guy is Allen Kessler frugal) so even with a 35% ROI he is only profiting about $5 per tournament.

One final point

When comparing live and online tournaments there is also the quite serious problem of volume and variance to consider.

First of all, it’s near impossible to hit the long-run playing live tournaments unless you are playing day in and day out for 10 years. Even our poor Hero from above is only playing 3,000 tournaments in a 10 year period. The inability to just fire up another tournament is a major disadvantage for live players.

Secondly, if you mix in higher buy-in events it’s almost entirely a crap shoot.

Suppose you play the WSOP Main Event and one other $5k or $10k tournament each year. Over a 10 year period you will only have played 20 of these events: Hardly enough for luck and skill to even begin to even out.  Basically what I’m saying is, nobody hits the long run in these events—playing 100 a year for 10 years is nowhere near the long run.

As NoahSD points out in this blog post from 2011 (if you’ve never read this post it’s MUST READ for all tournament players), even Shaun Deeb and his 80% ROI loses 13% of the time over a 1,000 tournament sample… If you really want to throw up in your mouth look at Noah’s analysis for a player with a 20% ROI, and then realize that he’s talking about online tournaments, where expenses are far lower!