The formula is indeed correct. I think your misunderstanding lies in the role of the Central Limit Theorem, which roughly states that the sum of n independent, identically distributed random variables is approximately normal (the distribution convereges to normal as n increases). Thus we don't need to assume anything too special about the distribution of poker results. This thread should prove helpful (it includes a link to a derivation).
-------------------- "hold em is a game of beating down monkeys with your rusted wrench."