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« 3/2/2005 - Reset | Main | 3/4/2005 - Linky Dinky »

3/3/2005 - Tourneys = Blech

I just came across this old Nolan Dalla article from pokerpages.com.  It's a good read, as is Daniel Negreanu's response.  The Dalla article spells out the exact reason I've been somewhat hesitant to get into the tournament circuit at all (besides the fact that even thinking about plopping down a $1000 buy-in into a tournament still makes me a bit woozy): overhead costs.

If I want to go to, say, Tunica for the World Poker Open then I could fly at a cost of a few hundred dollars, or I could drive at the cost of gas (probably still > $100).  Then I'd have to get a hotel.  Even on the cheap, that's $50/night.  Then I'd have to pay for food.  Yes, I'd have to eat no matter where I was, but eating out rather than eating at home is easily an extra $15/day.

Forget about even going for the entire month it's running.  Let's say I go for a week to focus on the tournaments I would do best at (ie, not seven card stud) and can afford (no $10,200 main event for me).  So with $350 in hotel costs, $200 in travel costs, and $100 for food, that's a $650 hole I'm in before playing a hand. 

The first week has a lot of $550 buy-in events; the second week has $1060 buy-in events.  If I did four events, I would need to average about a 30% ROI (Return on Investment) just to break even if I played that first week.  And that's after taxes and dealer toke. 

Let's say I could take that 30% ROI to the second week, instead.  That's $1272 or a $622 profit.  Well, gee, I could make that in about two days playing a decent number of hours online at my very own computer in my boxers.  And I would have much lower variance, less stress and choose when and against whom I play against (no 10am or noon required starting times).  Simply put, though, the opportunity cost would be huge. 

In other words, in order to make live tournament play worthwhile to me, I would probably have to do both of the following:

1) Be able to regularly play in tournaments with buy-ins that exceed $1000

2) Become very good so that my ROI goes through the roof. 

I would probably even have to add a third element to that list:

3) Get very lucky

I mean, heck, winning the WSOP main event, no matter how bad a player I was, would make a long, long string of mediocre results manageable, to say the least.

Needless to say, I'm not tempted to hop into the tournament circuit any time soon.  I enjoy the occasional tournament, but for the time being they'll stay just that--entertaining diversions from my bread-and-butter cash games. 

Online tourneys, however, have me intrigued...

__________

Now time for something completely unrelated to poker.  This article is funny and scary on just so many levels.  I mean c'mon:

There was no agreement that the original deposit would be returned upon request.

Were the judges able to maintain a straight face while writing that?

As for what this case says about people and our justice system....::shiver::

Posted on March 03, 2005 at 13:05 |

Comments

Eric

When calculating your overhead costs for travel, if you are driving, you really have to factor in the wear and tear on your vehicle as well. This is a real cost over time. I think the IRS currently gives you a $0.375 deduction per mile driven as a business expense. This is what the government has determined to be the average cost of driving a mile from point A to point B (including gas) over the life of ownership of an average car. Driving to Tunica and back from Austin (660 miles each way), for instance, would really cost you $495 rather than $100.

Posted by: Eric | March 03, 2005 at 20:02

pokerwannabe

That's a good point. All the more reason to either fly or just not go...

That 37.5 cents/mile seemed high to me, but it's right. In fact, for 2005 it's been raised to 40.5 cents/mile.

Of course, to be fair I believe the actual cost of gas and depreciation on my car is about half that per mile. That's still the same as a plane ticket, though.

Posted by: pokerwannabe | March 03, 2005 at 23:33

Eric

Actually, Edmunds.com estmiates that the "true cost to own" your vehicle (which will remain nameless) over it's first five years is 40 cents/mile. Compare to mine, which is 34 cents/mile.

Posted by: Eric | March 04, 2005 at 15:57

pokerwannabe

I was including depreciation and gas, but I guess if you start including estimated repair costs and/or insurance then it can get a bit higher.

I didn't find the tool you were talking about on Edmunds, but going by Edmunds own estimates for depreciation/mile (7.4 cents) and my own experience with gas/mile (7 cents) it's about 0.15/mile cost.

That's on average. Obviously, a new car depreciates faster than an older car. (It's taken me two years just to get out from being upside-down...)

I'd be interested in seeing what all they include in that .40/mile calculation. All I know is that this discussion has helped me immensely for when I prepare my tax returns...of course IIRC one has to file as a professional gambler before being able to take deductions, and that adds a whole 'nother slew of complications to things.

Posted by: pokerwannabe | March 04, 2005 at 16:53

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