Tournament Payout Structures

In the March 16, 2005, issue of Card Player, fellow columnist Thomas Keller wrote a column called "Tournament Winners Shouldn't be Punished." It was his opinion that tournament prize money structures should pay more to the winner. I'd like to offer a different opinion.

First, I'd like to say that I really like Thomas "Thunder" Keller. He is a young, smart (Stanford graduate), sensational poker player who has had great success thus far in both high-stakes cash games and big-time tournaments. He handles himself with class both at and away from the table. What I also like about Keller is that he is willing to share his knowledge with others to help them become better players.

In his column, Keller said major tournaments seem to reward a cautious, tight strategy (a statement with which I would disagree). He said he loves winner-take-all events because instead of punishing the risk takers, they reward them. He mentioned last year's one-table $2 million ESPN "winner-take-all" freeroll, and thought it might be a good idea for the newly created Professional Poker Tour (PPT) to go to a winner-take-all format (or close to it).

Freeroll tournaments are a different breed. I believe any sponsor or network that puts up an entire prize pool (or even a good portion of it) has the right to dictate any payout structure it wishes, and that players should be jumping through hoops to play. Furthermore, in my opinion, anyone who complains about those payout structures should be automatically disqualified.

Payout structures will always be a topic of discussion among players. For the most part, aggressive players, those getting staked, and/or those with a lot of money want larger payouts at the top. Top-heavy payouts, however, are not what the masses want.

I founded poker's Tournament of Champions (not the one you see on ESPN, but the original, in which poker champions played multiple games to determine the ultimate champion). This event was staged at The Orleans in Las Vegas from 1999 to 2001. To this day, I believe the TOC was the classiest event in poker history. (I know I'm prejudiced, but I believe most who participated in it would agree with that assessment. Sadly, the event was before its time, didn't make money, and thus didn't last.)

My partner in the TOC was Chuck Humphrey, and we wanted to implement a flatter payout structure than was used in most tournaments at that time, which was 40 percent for first, 20 percent for second, and 10 percent for third. Before dictating our payout structure to the players, however, we decided to let those who entered the event (670 players) vote on which payout structure they preferred. Well, 70 percent (an overwhelming majority) voted for the flatter payout structure (which paid 26 percent-28 percent to the winner). Since then, nearly all tournaments have gone to a flatter payout structure.

I contend that the surest way to destroy tournament poker is to have a winner-take-all format for regular buy-in events. Money must continue to circulate to keep players in action.

And for those aggressive players who think it would benefit them to have top-heavy payouts, I say they are wrong in their thinking. Yes, it might benefit them in terms of their style of play (as aggressive players are the ones who win tournaments), but in reality, it would make them less money in the long run. That's because fewer players would enter, and those who would enter winner-take-all or top-heavy events would most likely upgrade from their conservative style, making it more difficult for guys like Keller to win.

Dealmaking is another problem with top-heavy payout structures. With the blinds and antes extremely high at the end of a tournament, anyone can win. A race situation or the turn of a card determines whether you win or lose. After playing for hours/days, most players don't want to flip a coin for a million dollars or more (or even a lot less). My sources (which are reliable) tell me that even the event Keller spoke about (the $2 million freeroll on ESPN) had players complaining big-time about the payout structure (winner-take-all).

A flatter payout structure helps curb dealmaking, pays more players (keeping them in action), and, I believe, generates more entrants, which is good for the house and the players, including those who prefer a more top-heavy payout structure.

Take care.

Mike Sexton is the host for PartyPoker.com ("the world's largest poker room") and a commentator for the World Poker Tour (which can be seen every Wednesday on the Travel Channel). His new book, Shuffle Up and Deal, is now available through Card Player.