True ROI of Top Players at the WSOP This year

[smashedagain]

i thought sharkscope tracked wsop events?

I wrote a few times in that Galen Hall thread. His markup was a joke and his attitude was even worse.

You are hard as nails JP

[AndrewT]

Let's assume a player has a large enough sample that we can say his ROI in a certain tournament is 50%. What would be a fair/good price for him to set for staking?

If on average he turns £100 into £150 in each tourney he plays then, by definition, a fair price would be 1.5 - he would charge stakers £150 for each £100 of tourney fees.

[DMorgan]

Let's assume a player has a large enough sample that we can say his ROI in a certain tournament is 50%. What would be a fair/good price for him to set for staking?

Equilibrium price would be 1.5

[Cf]

Let's assume a player has a large enough sample that we can say his ROI in a certain tournament is 50%. What would be a fair/good price for him to set for staking?

If on average he turns £100 into £150 in each tourney he plays then, by definition, a fair price would be 1.5 - he would charge stakers £150 for each £100 of tourney fees.

But how's that fair? Let's say the stake is split 50/50.

Player puts in £25
Staker puts in £75

Cash for £150 and take £75 each.

Player has made £50
Staker has broke even

[DMorgan]

I didn't say it was fair, just what is optimal for the seller.

Economics doesn't really concern itself with what is 'fair' since its impossible to define.

Its hard to put it into context for me because I rarely play MTTs where I think that my ROI is <50% but I guess if I did I'd go somewhere around 1.1-1.15

Gotta remember though that sellers have to set their markup at whatever price point the potential investors will pay given the investors perception of the players ROI. This may or may not be anywhere close to the players true ROI.

[BulldozerD]

He has made expected value so the stake broke even

[DungBeetle]

"or people putting in there chips shaking like a shitting dog"

 

[smashedagain]

Not all sellers and buyers are concerned with roi. Lots of people are willing to make a bad financial investment because of other factors and lots of people are not afraid to ask for an extortionate mark up to take advantage of the other factors

Ty dung beetle.  Not sure they were Mike Caro's exact words ( probably something like "fear the trembling bet"). But at least physical tells ain't changed much in 30 years. Joe Navaro is some sort of native Indian do he probably uses bears and rabbits in his explanation

[Cf]

He has made expected value so the stake broke even

But all the profit went to the player. The staker broke even. So the markup is too high? Why should the staker even bother at 1.5?

[SuuPRlim]

If we know for 100% that a player has an ROI of 50% in a tournament, then he should, imo charge AT MOST 1.2 : 1.

He cannot charge 1.5, that is ludicrous. If I buy 50% of someone in a £1000 tournament at 1.5 where the expected return is £1,500, then I will be paying £750, and expecting a return of.....£750.....what I am doing is I am paying the seller £250 so I can flip on the variance of his tournament play, sometimes he his full buyin, sometimes he wins 5 buyins or w/e so I'm just blindly punting on which time he wins/loses, this is not a profitable investment for me.

He on the other hand is investing £250, and expecting a return of £750, which is now an ROI of 200%.  This is such a common misconception that ROI should = MarkUp.

I think that the "fairest" way to decide would be to half the action, so you, and your investor get to spit your ROI equally, so our 50% ROI player enters his £1000 tournament, I buy 50% at 1.25,  costing me £625 and am expecting a return of £750, I make 20% on my money, which is a good investment. He invests £375 and is expecting £750 in return, increasing his ROI to 100%.

Then I think you should reduce the mark-up by about 20%, to account for the times you don't play your best, are feeling a little ill and so on. the 50% ROI you are claiming is based on your top game, it's rare you will exceed your own level of ability, but qiute possible you wont be 100% on it, so it's only fair to reflect this in the price.

Some of the mark-ups at this WSOP are jokes, people like Galen Hall are so deluded it's ridiculous. Galen is a really good player but the foundation for his own opinion of his actual value in a poker tournament is based on results that are hugely above EV.. Self addmissoin of >100 live tournaments and 2 years as a pro, meaning he could have played MAXIMUM 1 $100k PCA high roller and 3 PCA main events.

PCA fields generally accepted to be the strongest out there, so lets go mental and give him a 150% ROI  (which is literally IMPOSSIBLE) in the main and a 100% ROI in the High Roller (again not even close to being possible)

His total profit from 4 tournaments (likely to be at LEAST 5% of his lifetime sample) is $2,672,900 whereas his "EV" of those tournaments (giving him an ROI likely to be 3 times what his true ROI is) is +$145,000 so he has run over $2,500,000 over EV in what is about 5-6% of his lifetime sample. I know this is true of ANY tournament and tournament winner but the point that me explaining it clarifys is that piece taking in tournaments is nothing but a HUGE, HUGE PUNT.

Providing you're not buying pieces of Galen Hall in the toughest tournament in the world at 1.6 : 1 and you know a bit about tournaments + tournament players you'll almost certainly be getting the best of it, but thats almost irrelevant.

[Cf]

He on the other hand is investing £250, and expecting a return of £750, which is now an ROI of 200%.  This is such a common misconception that ROI should = MarkUp.

Good post Dave, and this is what I was trying to get at. I've not quoted all of it but am gonna mention a few other bits and end on a question.

There are a few reasons you might stake someone but ultimately it's done to make some money. The main reasons to get staked in my view (and it's why I ask sometimes) is to reduce variance and reduce the cost if the tournament is a bit too expensive.

I don't charge a mark-up when doing staking. (I think I did once but I never have done since, nor do I think I will again, unless my ability level skyrockets). I think I am +EV in the tournaments I play, but wouldn't claim to be one of the top boys. But seeing how my stakers are doing me a favour by essentially allowing me to play the tournament in the first place I don't want to eat at any potential profits they may have.

So I just find it a bit odd when I see people putting posts up at 1.5+. Quite a few people asked this for the main event. It's a soft field, sure. But it's also expensive, and a huge field, hence high variance. Given these are good reasons to be asking for the staking in the first place it seems unfair to me to be charging this much and essentially passing on the high variance to the staker.

Obviously supply and demand comes into it. If people are willing to pay a mark-up, then by all means charge one.

So, the question I was gonna finish on. And to keep it simple I'm going to consider the WSOP main event only. Obviously it's really hard to do, but any realistic estimates on what a top player's ROI in this event would be?

[DungBeetle]

"But seeing how my stakers are doing me a favour by essentially allowing me to play the tournament in the first place I don't want to eat at any potential profits they may have."

Indeed.  I never stake players other than at par for exactly this reason.  Poker is the only industry where the person effectively providing credit lines gets charged interest!

If someone really is 1.5 over the field, you'd really expect that they are in the situation where they can win consistently over a large sample that they don't require backing.  If they haven't played a big enough sample then I don't see that they can justify the fact that they are 1.5 over the field.

But hey, if people are willing to buy people at 1.5+ (and this seems to be fairly standard in the poker community) then you'd be foolish not to sell at this price.  It's a free market - just my view.

[neeko]

No one will ever play enough live mtt's in their lifetime to prove there ROI is right or not.

variance is very different to ROI, Phil Ivey could not cash in the next 10 years worth of WSOP main events but that does not mean that his apriori expected ROI is not 500%+.

If a player puts a staking request out and it sells out then they priced it too low, if it does not sell out then they are too high.

[Cf]

No one will ever play enough live mtt's in their lifetime to prove there ROI is right or not.

variance is very different to ROI, Phil Ivey could not cash in the next 10 years worth of WSOP main events but that does not mean that his apriori expected ROI is not 500%+.

If a player puts a staking request out and it sells out then they priced it too low, if it does not sell out then they are too high.

Variance will obviously shape your actual ROI. For instance Phil Ivey's actual ROI (or anyone else who has made the final table/won it) in the main event is huge. He can play the rest of them until the day he dies and his ROI in the main will be big.

What i'm saying is let's say Phil Ivey plays the main event an infinite number of times. What might we expect his ROI to be?

[DungBeetle]

"If a player puts a staking request out and it sells out then they priced it too low, if it does not sell out then they are too high. "

True. But this is a combination of things including forum popularity, reputation and being able to market themselves.  Someone selling out at 1.5 doesn't mean that they are 1.5 against the field.  In fact someone selling at 1.5 would mean that they are actually saying that they are even higher than this as the staker is taking on credit risk which would should be priced into the model (and will differ according to past actions of the stakee).