The direct quote from the structure sheet for the WSOP main event is, "4.2% of the total entry pool will be withheld for entry fees, and 1.8% of the total entry pool will be withheld for tournament staff." That means a total of 6% is being taken out. A total of 6,844 players saw fit to pony up the buy-in this year. So $1.2 million will be taken out for dealers and staff, and $2.9 million will be retained by Harrah’s for expenses and profit. Those are the numbers, but it’s only the beginning of the story. Many a debate has been spurred by this arrangement, most revolving around two themes: "greed" and "need"—the greed of the sponsor and the need of winners to tip dealers further.
Regarding greed, players line up on both sides of the issue. Some feel that it’s the number-one priority of a business to maximize profits, and don’t begrudge Harrah’s efforts to do so. But others feel that it’s being taken too far. Remember, Harrah’s is making WSOP-generated money from many sources, the biggest being advertising and licensing. Yet it continues to take money out of the pool, which comes directly off the backs of the players. An interesting manifestation of this argument arose during the WSOP’s pre-tournament conference call to introduce format changes for this year. The awkward point came during the Q&A portion of the call, when the (paraphrased) question was asked, "With all the continual tweaks and improvements, which are sure to bring even more profit to Harrah's through its WSOP brand, will there be money added into this year’s main-event prize pool?"
The listeners on our end of the call snickered. We weren't laughing at the question, but at the long odds against the answer coming back in the affirmative. Then the answer came: "Yes." Yes? Did they say yes? The tournament representative went on to explain that during the break (almost four months until the final table is played in November), the collected money would be placed in an interest-bearing account with that interest being added to the pool. It was kinda funny, but it reinforced the stance of the business-minded sponsors on this issue. In our opinion, Harrah’s took a risk and spent a lot ($100 million) for the WSOP brand and they have a right to maximize their investment. If the market will bear it, then they are smart to do it.
As to the dealers, we’ve always felt that a fair percentage to tip on a big win is 1%-2.5% (with the higher end reserved for special circumstances). Since 1.8% is being forcibly taken, it’s difficult to justify giving more, especially for professionals, who like Harrah’s on the other side of the coin, have to maximize their returns. But this is a personal decision that each winning player will have to make.
As to the last part of your question, the fundamental determinant of the value of a gambling opportunity is "equity." In the case of a tournament, this means the percentage of money collected in entry fees that is returned as prizes. The 6% take-out equates with a house edge that’s greater than roulette’s 5.26%, but the consideration is different, due to the skill component in poker. Because this epic event attracts so many poor poker-tournament players, the expected value for any skilled player far exceeds the -6%, and that’s before adding in the EV of the "back-end" (sponsorships, endorsements, etc.) for the winner and others who "go deep." Put it all together, and you have what one former main-event winner calls "the best tournament of the year." By the way, the take-out in different WSOP events is varies. In the smaller tournaments, it’s a 9% total take-out. In the $50,000-buy-in H.O.R.S.E., it’s 4%.
To get in on the bonanza, you’ll have to take your game to the point where you’re not one of those who contributes to this good-player overlay, which means studying and practicing. We published our two top-rated tournament books Kill Phil>andKill Everyoneto help you with the study. And for practice, the $19.95-per-month fee to play as many tournaments as you want on subscription services like ClubUBT (which offers a risk-free two-week trial) is hard to beat. To read more about how the subscription services work, go here.
