How Much Money Can You Make If You Play Online Poker?
The sums are staggering. Martin Jacobson of Sweden won his first major tournament last year. His prize? Ten million dollars. Not a bad ROI on his $10k entry to the World Series of Poker Main Event.
Then there’s Brian Rast who beat 42 other players to win this year’s inaugural Super High Roller Bowl to the tune of $7.5 million. This was the fourth seven figure score of his career!
Those are live tournaments, but if you can play online poker and win monster prizes as well. Every Sunday, PokerStars runs 7 major tournaments with millions of dollars in total prize money. Last Sunday the biggest winner earned $175K.
Then there are the cash games. Top online cash game pros, playing at the “nosebleed” stakes, boast seven figure yearly salaries. And the VERY best players will play both cash games and tournaments. The top 35 earners of all time, which includes household names like Daniel Negreanu, Erik Seidel, and Phil Ivey, all have total career winnings reaching into 8 figures. As of this writing, Negreanu sits on top with over $36 million.
Sick! But how about the rest of us?
Well don’t sell yourself short. Dream big, get a little lucky, and you too could play online poker and win life changing mountains of cash. With continual, applied practice and a good study strategy, there’s no reason you can’t reach the top.
Still, you may be wondering what poker players are able to make at the lower levels. Maybe you’re trying to project how long it’s going to be until you can quit your job, so let’s dig into realistic incomes for poker players.
The first thing to realize is that tournament players use somewhat different terminology from cash players. I’ll discuss both, but either way you ultimately want to estimate your hourly rate as best you can.
Tournament players like to talk about their ROI (return on investment). The calculation is the same as in the finance world. It’s a percentage that describes how much you earn compared to how much you put in. Here’s the formula:
ROI = (tournament winnings – buy-ins) / buy-ins x 100
For example, let’s say you play 100 tournaments each with an average buy-in of $11. You then would have spent $1100 in tournament buy-ins. Perhaps you won $1400 in total prize money for those tournaments. Here’s the calculation for your ROI:
ROI = ($1400 – $1100) / $1100 x 100 = 27%
This would actually be a fantastic ROI. Most good tourney regs will fall somewhere around 5 to 10%. Hitting 20% is good. And only the very best are likely to reach 30%.
If you’ve played some tournaments online and are curious about your own ROI, try querying your screen name on Sharkscope.com.
Also, realize that to get any kind of reliable reading on what your true ROI is, you need to have a sample size of thousands of tournaments.
And while comparing ROIs may help you size yourself up against the competition, ultimately, what you need to know is how much you’re making per hour. After-all it has to surpass your daily wage before you can walk into the boss’s office and say “Fuck this shit. I’m done.” …amirite?
Tournament Hourly Rate
How then do you calculate your hourly rate? You need to figure out how many hours you spent playing all of those tournaments. Sure you could do it with pen and paper or maybe even a smart-phone app, but the best solution is to use tracking software like Hold’em Manager or PokerTracker.
Here’s the formula for hourly rate:
$ per hour = (tournament winnings – buy-ins) / total hours
Returning to our previous example. Let’s say you average 10 tournaments a day for 8 hours each day. Thus the 100 tournaments took you 10 days or 80 hours. Now the calculation:
$ per hour = ($1400 – $1100) / 160 = $1.90 per hour
Surprised? Or is that about what you expected? Well, let’s 10x these numbers to make them a bit more significant.
Suppose we play $110 average tourney buy-ins and maintain the same kick-ass ROI of 27%. Now you’re making $19 per hour.
You could also try increasing the number of tournaments you play at one time. But I hope this impresses on you that over long sample sizes you really have to be doing very well at some relatively high buy-ins and putting in some long hours playing MANY tournaments at once in order to reach a meaningful hourly rate.
Here’s a table showing possible tournament win-rates for various skill levels:
One of the reasons I prefer to play cash games is that you can achieve higher win-rates playing fewer tables at once as we’ll see shortly. Here are some more reasons why cash games are better than tournaments.
Cash Game Win Rates
In cash games, players use the term bb/100. This means “big blinds per 100 hands”. For this metric to mean anything, you have to know what the big blind is. Consider this example.
At $.05/$.10 No Limit (i.e. $10NL), a player has a win rate of 5 bb/100. He plays 6 tables at once and averages 500 hands per hour. What is his hourly rate?
$ per hour = hands/hr x bb/100 x big blind / 100
And plugging in the numbers from our example:
$ per hour = 500 x 5 x $.10 / 100 = $2.50 per hour
To put this in perspective, 5 bb/100 is a strong win-rate, but the very best players might make twice that win rate. And 500 hands per hour is some good grinding volume. That’s about what I average playing 3 tables of 6-max 200NL at a “zoom” or fast-fold style table.
Again, to achieving reliable estimates for your win-rate takes a TON of hands. Read this post on poker variance and how many hands you need to be 95% confident in your win-rate.
Here’s a table showing cash game win-rates for various skill levels:
We compared two seemingly similar scenarios: $11 buy-in NL tournaments versus $10 buy-in NL cash tables. Let’s consider this a bit further.
Bankroll management refers to playing within your limits and making sure you have enough cash on hand such that you never go broke. If your bankroll starts to dwindle, you step down to a cheaper buy-in, and in this way you protect your roll. Over time and given heavy analysis, players have established the necessary amounts needed to minimize your “risk of ruin”.
Given the very high variance of tournaments, the standard recommendation is to have at least 100 buy-ins for that tournament. So if you’re playing $11 buy-in tourneys, this means you need $1100 for your bankroll.
Given a positive win-rate at micro-stakes cash games, you can get by with about 30 buy-ins. (Here’s an in depth video and discussion of proper bankroll management.) So for multi-tabling $10NL cash, you only need $300!
The Stress of Variance
Another consideration is the mental tax of variance. In the early days of your quest for poker success, it’s critical that you protect your ambition. This is such an emotionally sensitive endeavor that it’s quite possible you will get frustrated at a series of bad beats and losing days and give up altogether. It happens all the time.
Do what you can to both minimize that stress and subsequently maximize your chances for success. Try to choose the path of least resistance but maximum reward.
Try Both, Have Fun!
Lastly, there’s no reason you can’t play both. Try playing a bunch of tournaments and try putting in a bunch of hands at the cash tables. Perhaps one style just suits you better.
I primarily play online cash poker because after trying both and checking my long term results, my win rate is much higher at the cash tables. Yet I’ll still sit down in a tournament from time to time just for fun.
After-all that’s the real reason for this pursuit of course: for the joy of the game. Do you agree? Feel free to share in the comment section below.