$50. That's the correct short-term EV impact of Harrah's TOC decision

[Jedster]

Many posters, myself included, have said that the short-term impact of Harrah's decision to allow sponsorship exemptions was about $500.

Upon further reflection, this number is actually quite misleading and overstates the impact Harrah's decision.

As background, obviously the $500 number is figured by subtracting the average EV of a player in a TOC without exemptions from the actual average EV. With 111 players, the average EV was $18,018 and with 114 player it dropped by $474 to $17,544.

But the core argument that what Harrah's did is unfair is this: when players signed up to play WSOP Circuit events, they did it in part because they understood that they were in part qualifiers for a $2 million freeroll.

Therefore it is the EV impact of these players which must be considered. To look at the 111 people who actually qualified is results-oriented thinking. It's the same as saying that since Helmuth ended up winning $325,000 the EV impact was $3k per player. Yes, that was the actual impact -- but not the EV impact.

So let's take a look at what the correct EV impact really is.

To do this, I'm just going to look at the circuit events. I think everybody would agree that the TOC played some role in getting these off the ground and I also think that everbody would agree that the WSOP itself would have had roughly 5,500 entrants regardless of the TOC promotion. So anything "stolen" from them is more incidental (and because of sheer numbers is rather meaningless, especially considering that the all WSOP final tablers won at least $1 million.)

Going into the first circuit event, you'd figure that you had about a 10% shot of qualifying for the TOC and that the TOC would have about 110 players. So you figured that if a TOC seat was "worth" about $18k then you're entry into a circuit gave you about $1,800 in TOC equity.

Now let's say you knew that there would be three sponsorship exemptions. Now you'd figure you'd only have about $1,750 in TOC equity based on a seat now being worth $17,500. That's a $50 loss in EV. Not exactly earth shattering.

Sure, Harrah's communicated poorly about this. No question there. And you could argue that they "stole" $50 from every player who entered a WSOP Circuit event. But that argument doesn't appear very consequential when you consider that what they were really doing was changing the average WSOP Circuit event entrant's TOC equity from $1,800 or so to $1,750.

Then, if you pause for a moment and consider the longer term positive implications of sponsored poker, you'll realize that there is absolutely no way that the integration of Pepsi into the sponsorship of poker tournaments is not going to have far more benefit to players than the $50 EV that was "stolen" from them.

I mean there is really nothing to debate here. It's so obvious that I can't believe that professional poker players aren't kissing Harrah's ring. I understand that some players who actually got lucky and got into the TOC and who played long hours only to get frozen out of the money are pissed, but as far as I can tell, that's just whining from poker players.

My advice: get over your $50 EV loss and focus on making poker the greatest game on television. That's the way to make the big bucks. Not getting nitty over sponsorship exemptions.

[david050173]

My understanding is Pepsi put up 2 million dollars. Zero dollars and zero cents of that made it into the prize pool. Not really the precident that I wanted set.

[GambleAB]

You can use all the statistics to prove any point your looking to make. Obviously, you have no problem with being promised one thing and getting another. That's great. Some of us DO have a problem with that, and we are trying to work to not only make poker a huge sport, but also to ensure that the players are treated fairly and with respect. Some of us are NOT just happy to be there....

[Jedster]

I suppose it's your business and you can handle it however you want. For you, the principle of the matter seems to be more important than the financial considerations. I'm not a poker professional and my background is in business, so I guess I look at the bottom-line and wouldn't get hung up on the $50 EV hit when I see a massively enormous opportunity staring me in the face.

Let's say the TOC does well and Pepsi's campaign does well. Let's say next year they put up $4 million. And let's say there are 200 players or so. If there are 2,000 entries in Circuit events, that means there will be $2,000 in freeroll dollars for each entry. Basically, each entry is already discounted 80%. Not only is there no real vig, probably every good player has bumped up their EV by at least 15-20%.

This year alone there were something like 1,000 circuit entries. The juice on those entries was something like $400k (it's 4%, right?). For the 100 or so players who came from circuit events to the TOC, that is $1.75 million in equity. That's more than 4x the vig. That's a damn good deal.

And one thing I'll guarantee you: the Hellmuth v Matusow final table is going to be GREAT television. People will eat it up.

In five years, unless all the people who are complaining about how awful Harrah's and Pepsi are get their way, people may look back at this year's TOC and say that it was the moment when poker really arrived as a sponsored game.

People have a right to be nits and sticklers about the exemptions, and in a way I admire their steadfast devotion to fairness. But if I were in the business, I'd be licking my lips and smelling a big, ripe opportunity.

[GambleAB]

[ QUOTE ]
I suppose it's your business and you can handle it however you want. For you, the principle of the matter seems to be more important than the financial considerations. I'm not a poker professional and my background is in business, so I guess I look at the bottom-line and wouldn't get hung up on the $50 EV hit when I see a massively enormous opportunity staring me in the face.

Let's say the TOC does well and Pepsi's campaign does well. Let's say next year they put up $4 million. And let's say there are 200 players or so. If there are 2,000 entries in Circuit events, that means there will be $2,000 in freeroll dollars for each entry. Basically, each entry is already discounted 80%. Not only is there no real vig, probably every good player has bumped up their EV by at least 15-20%.

This year alone there were something like 1,000 circuit entries. The juice on those entries was something like $400k (it's 4%, right?). For the 100 or so players who came from circuit events to the TOC, that is $1.75 million in equity. That's more than 4x the vig. That's a damn good deal.

And one thing I'll guarantee you: the Hellmuth v Matusow final table is going to be GREAT television. People will eat it up.

In five years, unless all the people who are complaining about how awful Harrah's and Pepsi are get their way, people may look back at this year's TOC and say that it was the moment when poker really arrived as a sponsored game.

People have a right to be nits and sticklers about the exemptions, and in a way I admire their steadfast devotion to fairness. But if I were in the business, I'd be licking my lips and smelling a big, ripe opportunity.

[/ QUOTE ]


Obviously, we both agree that we want poker to "arrive" and be a huge deal with tons of "free" money out there, very shortly. My only concern is, if we start concieding these details now, how much will we have to conciede in the future? It's not that I don't want the same end result as you do, it's just that the process annoys me.

[Jedster]

[ QUOTE ]
Obviously, we both agree that we want poker to "arrive" and be a huge deal with tons of "free" money out there, very shortly. My only concern is, if we start concieding these details now, how much will we have to conciede in the future? It's not that I don't want the same end result as you do, it's just that the process annoys me.

[/ QUOTE ]

I am sure we agree on far more than we disagree, and I understand that it's much easier for me to dismiss Harrah's mistake since I didn't make the top 10% in any of the events.

Here's my advice: aside from maintaining the integrity of the game (vis a vis player backing), the biggest issue for next year is how to make sure that Harrah's and sponsors increase the prize pools and numbers of TOC-style tournaments.

The important issue isn't whether or not there will be sponsor exemptions (there will be, and there should be -- poker isn't like golf, and without exemptions, some big names might not make the cut). It's not even whether those exemptions will be disclosed (of course, apparently Harrah's has already disclosed them).

The biggest issue is going to revolve around how to (a) increase the size of the $2 million free-roll and (b) increase the number of those free-rolls. Poker players should net settle on $2 million for next year's TOC.

I have no easy answers on how to achieve the core goals. But it will be important for them to realize that the strength of poker on TV is a balance between the big-name pros, the no-name amateurs, and the hard-working newer pros like you. They can't market poker like baseball or golf because poker doesn't work like that. And a key way for them to keep up the quality of product they have on TV is to cultivate that balance through TOC-style tournaments. Perhaps the TOC itself should be a multi-round tournament or something with $10 million in prize pool. Sort of a Poker Superstars but with a mixture of players (I find poker superstars boring because it's all pros).

Anyway, if I had the answer I wouldn't be posting it here at 2.30am!

I just know that achieving that goal will require a skeptical, yet collegial relationship with Harrah's. I mean look at DN -- even he kissed Harrah's ass after his initial column. It's sort of like what Reagan said: "Trust, but verify." Too much invective has been directed towards Harrah's. Ultimately, they are the people most likely to make good things happen. A hyper-confrontational attitude (not singling you out) just won't get that much accomplished.

(Anybody who knows me from the politics forum knows that I'm no Republican, so please don't take the fact that I quoted Reagan the wrong way....)

[ QUOTE ]
I just know that achieving that goal will require a skeptical, yet collegial relationship with Harrah's. I mean look at DN -- even he kissed Harrah's ass after his initial column. It's sort of like what Reagan said: "Trust, but verify." Too much invective has been directed towards Harrah's. Ultimately, they are the people most likely to make good things happen. A hyper-confrontational attitude (not singling you out) just won't get that much accomplished.

[/ QUOTE ]
Dead on. This absolutely needs to be said and repeated.

Far too few in the poker community comprehend that making small concessions here and there will be imperative to sustaining the growth we've seen.

The question right now isn't "what if we concede too much?" It's something to think about, okay, but we're nowhere near there yet. The game's most pressing concern by far is "what happens to poker when mainstream, moneyed interest evaporates?"

[SossMan]

So they 'stole' $50 from a ton of people instead of $500 from 100 people? I fail to see the difference.

[Jedster]

[ QUOTE ]
So they 'stole' $50 from a ton of people instead of $500 from 100 people? I fail to see the difference.

[/ QUOTE ]

Because it gives you an idea of the relative importance of what went down with the TOC versus the potential of future sponsored tournaments.

You have every right to be absolutist about it, and in some sense you're being honorable and correct.

But you should keep in mind that it is far more important to figure out how to expand the pools and frequency of TOC-style free-rolls than to collect the $50 that was stolen. This year, for the first time in poker history, players could enter tournaments in which they were given about $1,750 in equity in another free-roll tournament. That's a much bigger deal, and I get the sense a lot of people would be happy to send Harrah's to jail for their crime, even if it meant losing those free-rolls.

I don't understand why these exemptions made everyone so mad. It was a FREEROLL tournament. Putting the big name player in will make it more exciting TV coverage which will ultimately help poker by getting more sponsor in the long run.