Calculating Your Poker ROI%
For a casual poker player who plays a couple bucks a week, what they have made means very little to them, especially in relation to what they may have had to invest. But for the serious poker player or full time pro, the "Return On Investment," or ROI for short, means the difference between being a winning or losing player. In other words, it is very important and needs to be a part of the stats you keep as a poker player. So what is ROI? ROI is the percentage that you have made or lost in relation to how much you have invested.
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For example, if you were to pay $35+$1 to play a 10 handed sit n go that paid out $175 for first, $105 for second, and $70 for third, the money that would be won would be computed with the money invested to see if you turned a profit. ROI is much easier explained when put into an equation, so please read further for a better understanding.
Poker ROI Calculation
ROI is simple to figure out. In fact, you only need a couple of numbers. Once you have these numbers, you can plug them into our equations below to find out how you are doing. Here is the equation you would use:
* $ Won -- $ Buy In / $ Buy In X 100 = ROI %
Note: Be sure to include the full buy in ($35 + $1) when subtracting it from what you won. If it is out of pocket, it needs to be included. You are also subtracting the buy in because that was your investment and you are not making any profit by making that back.
To utilize our equation, use the example above ($35+$1 buy) and assume you won first place!
· $175 -- ($35+1) / ($35+1) X 100 = 386.1%
This is an excellent return on your money, as you almost quadrupled your buy in. Now while this looks great, knowing your ROI for one game is virtually pointless. Why? Well, it is hard to know whether you are good at something after only doing it once. The same principal applies to poker. You may have gotten lucky that one game and now have false hope. Stats are only significant over the long run, and the same holds true for ROI. Using the same dollar amounts as above, let's assume that you have bought into 106 games and have won 5 of them, while losing 101. Would you have a good ROI then?
You will use the same equation as above, but the difference will be that the numbers are the total of what you have invested and what you have won. This is what your equation would look like:
106 games X ($35+1) = $3816 Invested
5 games won X $175 = $875 Profit
Those numbers plugged into our equation would look like this:
$875 -- $3816 / $3816 X 100 = --77.07% ROI
Does not look so good, does it? This simply proves why you want to look at your numbers in the long run. A player who wins one game has a nice return on that game alone, but when looked at over a period of time, it is possible to win every so often and be a losing player.
Using the example above, what would it take for a player to break even winning nothing but first place? In other words, how many games would you have to win out of 106? Use this equation here:
Investment / $ Won = Amount of games needed to win to break even
Using our equation:
$3816 / $175 = 21.8
To be a break-even player playing 106 games at $36 a game, you will need to win first place a minimum of 22 times. If you cannot win first every time, you will simply have to win more often at 2nd or 3rd place to be able to break even.
While it can be argued, many say that a ROI of 10-15% is acceptable. Over the long run, this seems feasible, but ultimately it is the player who will decide his goal.
ROI and Cash Games
When playing in Ring Games, it is much more difficult to track how you are doing. This is due to the different variables such as:
- The amount you bought in for
- Length of session
- Consistency using the first two bullet points from game to game
If you want to keep track of your stats in a cash game, you are better off figuring out how much you made per hour, similar to a job. For example, if you brought $20 to a table and counted your cash after an hour to find that you had $25, you would have made $5 for that hour ($25-$20). This is the easiest way to figure out how you are doing for both the short term and long term for ring games.
If you want to know how you did for the month, take the amount you have made, less the amount you took, and divide that by the amount of time spent. To put this into an equation, let's say you took $700 over the course of the month, walked out with $2,100, and spent a total of 15 hours playing. How much money did you make per hour?
($ Won -- $ Invested) / Time Invested
($2,100 -- $700) / 15hrs = $93.3 per hour
In the end, these numbers will truly determine if you are a winning player or losing player. It is crucial for a player to keep track of their stats if they are going to be a serious poker player, as this can be one of the first steps in locating a leak in your game. And leaks cost you money which in turn affects your ROI %.