The Myth of Tournament Winnings

When player profiles first started appearing on Ladbrokes’ poker forum I was fascinated by them. Being that I was playing mostly online, I was starved of information about my opponents. I remember how depressed I was at the vast numbers of players who would report, offhand, about how they had won the $100k guaranteed a couple of times. I would coo at how good these players must be, and was jealous about how matter of fact it all seemed to them.

Over time, and with more analysis and experience, I realised a very telling pattern – only the players who actually had such big wins were the ones talking about it. I mean, if you had entered the damned thing a hundred times and hadn’t won a sausage, you wouldn’t be crowing about it on an internet forum, would you? And if you’d won it twice, of course you’d be matter of fact about it. Who in the poker community is so bold as to admit their dumb luck? Nope, it’s all down to skill.

If anything, the situation has gotten worse recently. Certain websites and TV programmes have taken to posting players’ career tournament winnings. In the case of TV shows, one often sees a shot of a hoodied, shades-sporting youth, stolidly riffling his chips as he makes a decision. Below him appears caption with his name and the imperious words “career winnings – $366,780”.

“Ooh,” we think, “he must be good.” Shame the caption omitted to tell us that since 2004, the guy has blown over $450k on tournament entry fees. This, before we take into account the costs of plane tickets, hotels, taxis, and of course the amount of money he would have earned if he’d just played at being a lawyer like his rich uncle.

Yes, I know some of them do make money, but if our information system is sophisticated enough to record everyone’s wins, it’s surely not too much trouble to record their losses too, and subtract one figure from the other?

You already know the answer – no one wants to appear on TV with a big fat “$30k in the red” sticker on their T-shirt, and their sponsors certainly don’t want that.

This is part of a phenomenon which exists far beyond the reaches of poker. It is covered in detail by Nassim Nicholas Taleb in his book Fooled by Randomness, a work which should be compulsory reading for any serious poker player. Taleb’s experience is shaped largely by his time working in equities, but it applies equally to any field where large amounts of randomness are involved (i.e. virtually everything in life).
A particularly interesting point is the idea that if you want to put some money in the best investment fund, you would be unwise to invest in the fund manager that topped the charts in the previous year. This person, very much like the early leader in a tournament, is the person likely to have taken a whole bunch of risks (often bad ones) and simply got lucky with them. His not-so-fortunate compadres – who had taken equally many stupid risks – are way down the list; there are hundreds of them, and their P45s (or corpses… or depleted chip stacks…) are testament to how they were not so lucky. Five words if you don’t believe me: Chris Moneymaker and Jamie Gold. In fact, one could be forgiven for thinking that this phenomenon will pervade the WSOPME for years to come. While there are that many bodies to haul yourself over, it’s surely only the luckiest fool that will make it to the top of the pile.

The sage advice in the stock market is to invest in the fund managers who have performed consistently well over the last ten or twenty years. Through thick and thin, in other words. The equivalent in poker terms is simply to have a record of how badly people have done in addition to how well. One great resource for this is Bluff’s thepokerdb.com – which is a database of all multi-table tournament performances on all the major sites for the last three years or so. Admirably, here are figures not just for how much players have won, but how much they invested too.

A quick analysis yields some interesting results. First, consider the following table, of the top rated players according to thepokerdb’s ranking system:

As you can see, even among the top five players, there are some serious discrepancies, depending on whether you choose gross winnings, net profit or return on investment (ROI) as your indicator of a player’s prowess. This is the just top five. If we take a sample from lower down the table (the following are ranked beyond 1501st place), the picture is even more distorted:

In this sample, we have a player whose TV caption would appear to tell us that they had career winnings of $232k, yet they have netted under $12k. One player is even in the red despite having posted almost $100k in winnings.

As a footnote, if you want a telling observation about just how extreme randomness can be, and thus just how much of a pinch of salt you should take the individual statistics thrown at you, consider the following. AJKHoosier1’s profits include a biggest cash of $941k. Now, we can assume given that this was such a big tournament that at some point in his march to victory, and when he was out of the money, he had an all in which he won (given the size of the tournament this is likely but not definite). Note that if he had suffered a loss in that all in – just one beat in over 4000 tournaments, his huge profit figure of over $1.4 million would be a mere third of what it is now.