There has been a lot of recent talk about the number of people who owe money in the poker world, and since sponsorship money began drying up in 2011 we’re finding out that plenty of well-thought-of poker players are either grossly in debt or don’t have near the amount of money their results would indicate they should.

This shouldn’t be a surprise. The mantra that poker is a hard way to make an easy living is certainly the case, but more to the point, tournament poker is an impossible way to make a consistent living, and in the words of The Animals this inconsistency has, been the ruin of many a poor boy… promising poker players.

The issue starts with the variance involved in poker, particularly tournament poker, but it certainly doesn’t end there.

Offsetting variance

First, most tournament poker players are staked. So right off the top, whatever they win, they’re really only winning 25%-50% of that amount, and since tournament poker is such a high variance game, many are so deep in makeup that a five and sometimes even six-figure score still leaves them in debt.

Staking isn’t a new development in the poker world, but for a while there were quite a few poker players who were able to avoid being staked, at least in the conventional sense. What happened was the ease of making money during the poker boom, coupled with players’ earnings being augmented by sponsorship dollars, created a five-year (give or take a year or two) period where variance was minimized and more players were profitable.

Not only were the tournament fields larger and softer, allowing dozens of players to be sponsored and basically playing these events on someone else’s dime, but hundreds more were now able to find backers that would pay their way for 70% (again give or take) of the profits.

But as the poker boom began to fizzle, the number of sponsored players dropped, as did the number of players who were worthy of being staked, but not before a lot of players were so deep in makeup they would never be able to dig their way out of this hole.

What complicates this is the still-held belief that live tournament poker is still beatable, and for big sums, but that was only the case during the poker boom. Today, very few people are able to show a profit playing live events, and those that do are heavily staked.

The cost of playing poker

Second, think for a moment the sheer cost of playing poker.

Even if a player walks away from a big score with $100,000, that money could be eaten up in just a couple months, as virtually every major tournament series requires $10,000 (a WSOP Circuit stop) to $50,000 (a WPT or EPT stop with a high-roller event) in buy-ins. Not to mention the travel costs, taxes and so on.

Suppose a poker player wins $100,000 at a $1,500 buy-in tournament. First, they’ll have to tip the staff. Second, they’ll need to put 30%-50% aside for taxes. Then it’s on to the next stop, which means travel costs and more buy-ins.

One would think this isn’t much of a problem now that they’re flush with cash, but how flush are they? If you’re really trying to make tournament poker a profession, $50,000 isn’t going to last long.

Tournament players have long mitigated this cost by selling staking packages, and when you look at the players who sell shares of themselves, both live and online, it should become abundantly clear that the cost of travelling and playing in these high variance, four- and five-figure poker tournaments is almost insurmountable, and capable of crippling even seven-figure bankrolls in a single year.

Bad decisions

Finally, if you listen to Galfond’s and Deeb’s story (which are common) or read through the old Chino Rheem and Erick Lindgren tales, it becomes abundantly apparent that the victims aren’t exercising the best judgment in making these loans and/or entering into wagers.

This is sort of par for the course for high-level poker players, since to get to that level in the poker world you need to have a certain amount of disdain for money and willingness to take on risk. Whether its poor spending habits, moving up in stakes after a big score, a propensity to play negative EV pit games, or simply making bad loans to players who are down on their luck, poker players can go through mountains of money in no time.

Let’s revisit our hypothetical tournament victor and his $100,000 (or more accurately $40,000-$60,000) nest egg. Since they’re now flush with cash maybe they upgrade to first-class, or a suite, or maybe they throw a party to celebrate their big win and the start of their bright future in poker.

Maybe our protagonist wins again, and now has a $250,000 bankroll, so they decide to start staking a couple other promising young players, or loan someone money because they can empathize with that person’s current struggles. Perhaps they swap percentages with a few other players, not because it’s plus EV, but because they’re friends. Maybe they make a few wagers with a well-known pro who they think is trustworthy. Maybe they believe they’re the next great thing in poker and start playing high-stakes cash games or take a crack at a $25,000 High-Roller tournament.

The point is, the poker world is tricky to navigate, and full of snares that are essentially trying to separate you from your money. Any of the above scenarios could turn out just fine, but you could also be getting freerolled and not know it, or simply get screwed over when the person can’t pay.