Poker Issues Part II: The $10 million WSOP Guarantee

So last year the WSOP decided to try something to inspire more entries in the WSOP main event. Glitz it up and make it look a little sexier. It was the 10th anniversary of the WSOP being held in Las Vegas at the Rio, so it seemed like it was worth a try. Attendance was up about 5% I think, after three straight down years, but it's hard to say if the reason for that was the carrot at the top being $10 million.

Personally, I don't think it was. I think it has more to do with the upswing in the economy. If you look at the numbers when it comes to the economy in the last years, coupled with the refund checks from FTP arriving, things are looking up:

(From about 6 years ago)
DOW 7,949 to today: 17,830
Unemployment 7.8% down to 5.8% today
GDP Growth -5.4% up to 3.5%
Deficit GDP % 9.8% down to 2.8%
Consumer Confidence 37.7% up to 94.5%

Now this blog isn't about politics, but I wanted to add those numbers to show evidence of other possibilities for the WSOP main event growth in 2014.

As a one year gimmick last year, I fully supported the idea as it wouldn't make a significant difference in terms of the longevity of the event. Top heavy prize pools most definitely do have a damaging effect on tournament numbers and the clearest example of that would be if you offered winner take all events. Imagine if the main event was a winner take all event? How many players do you think would pony up $10,000 if there was just one prize? My guess today is that you would get roughly 150, with that number decreasing each and every year as one guy gets rich and sucks money out of the poker economy, while 149 others end up losers.

I'm a big believer in expanding the number of players who make the money from the standard 10% to 15%, while at the same time lowering the percentage of the prize pool that the min-casher's get. That serves a few purposes:

A) When the bubble is smaller, players won't stall as much and bring the game to a halt.
B) More people leave a winner.
C) It keeps the money flowing to a wider group of players so they can continue to play the next series of events.

I debated using this study that was done many years ago, but I want to be fully transparent and honest, so I think it's worth adding. The study involved a rat, and three tubes he could walk down. At the end of the second tube they placed a piece of cheese. The rat went through the first tube, found nothing, turned back and ate the cheese in the second tube. They kept putting the cheese in the second tube about 5-6 times in a row, then on the 7th, instead of getting cheese, the mouse got an electric shock. The 8th time they put the cheese back, and the rat ate it. They alternated between cheese and electric shock, before ultimately providing the rat only electric shocks. The rat continued down the second tube repeatedly until it died.

Substitute the rat with a player cashing in a poker tournament. If a player enters 10 events and doesn't cash once, he is far less likely to play another one. Now, if the player cashes in one or two of his first few events, he is far more likely to wander down that tube in search of cheese!

In my last blog I mentioned that it's important for professional poker players to think of themselves as small business owners. When pondering poker issues, use this method:

What is best for the players?
What is best for the venue?
What is best for the organizers?

In this case, the venue and organize would essentially be the same, WSOP and Rio, however, there is another wrinkle to consider in this equation, and that's ESPN. What is best for the broadcast?

The argument is being made, mostly by those in charge of the broadcast, that $10 million makes headlines in the mainstream that $8.5 million doesn't. I don't know if there is evidence to support that, but they seem to strongly suggest that it does.

I would argue that it could market the prize pool in other sexy ways that don't make the payouts so top heavy, but it's not my call to make. One thing we can be quite certain of, is the importance of having the WSOP on ESPN. Televised poker most certainly brings new players into the game, and having ESPN televise it is crucial to it's success. So, even if I personally don't think that the $10 million first prize is the best carrot to promote the event, if ESPN believes that it is, and they saw an uptick in attendance last year, I think we will have to just accept that and support it.

My bigger concern is that the WSOP is the premiere event in poker and this could set a dangerous precedent for other organizations to follow suit. When a recreational player cashes in an event, he goes back to his home poker game and inspires his buddies to play next year. After all, if he can leave a winner, then surely I can too! I think it's in pokers best interest long term to have flatter payout structures that pay more spots, while also making that min cash worth no more than 1.5 times the buy in. When Billy Bob goes back to his wife and says, "Honey, I'm in the money!" The fact that he is guaranteed $15,000 rather than $22,000 is an afterthought. The celebration is in the WIN, no matter how small.

So I leave this entry by saying that while I don't think this is what's best for the players long term, our business partners, the WSOP, Rio, and ESPN want this and I don't think it's a damaging enough issue to the players that it requires too much of a fight.


(If you missed Part I you can find it here: Part One