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The GameMaster's Secrets:
Playing Blackjack Tournaments as a Business - Part 2

I made a big deal about the high variance one can experience in tournaments, which basically means you could enter 20 or 30 tournaments and walk away with no $$$ from any of them or you might win the first one you enter and get back your entry fee 100 times over, which would pay your entry fees for the next 10 years. That's what we call high variance and no truly successful business can live with it for very long. (If you think casinos deal with high variance every day, you'd be wrong.)

As I recommended in part 1, assembling a team of players will reduce the variance quite a bit - the bigger the team, the lower the variance. In my many years of playing Blackjack - the game, not the tournament - as a team member, I've found that the biggest problem besides dishonesty is the different skill levels players have. That would certainly be the case with a tournament team, but if you're able to practice together, you should be able to elevate everyone's skill level to a point where it's not a major concern. Once you get beyond that, you should give consideration to how the spoils of this venture will be shared, should it start to pay off. Needless to say, I have some thoughts on the topic, which I've categorized below.

Informal, one-time team

This is a fairly simple approach where a group of you do what's often called a "save" among yourselves. It's basically just a matter of selling a piece of your results to others and the others sell a piece of their results to you. Let's say a tournament costs $1000 to enter and that entire $1000 will go into the prize pool. That's typically the case with Blackjack tournaments, whereas Poker tournaments might have a $100 fee added to it, which goes to the poker room or casino that's sponsoring the event. Either way, it won't make a big difference if you include it or leave it out; whatever floats your boat. Anyway, if you and 4 others agree to do a "save" of $300, you're agreeing that any of you who wins a cash prize agrees to pay the others $300; if two or more of you get a prize, they'll split what's owed to the others. Under this scenario, if none of you qualify, you're each out the $1000 and nothing is owed to anyone - just have a "losers club" meeting at the bar when the tourney's finished and you can fight over the check. You might run into a problem if someone wins only $1000, but owes $900 of it to the others, so it's best to put in either a "minimum amount won" clause or agree to a proportional pay out if the prize(s) won are below a certain amount.

The biggest problem with this approach is, to me, more that of collecting than the skill level of those involved in the save. Because luck plays such a big part in BJ tournaments, literally anyone might win or at least get "in the money." But, if you don't know the people well, you might find that the winner has conveniently forgotten about the deal you all made. There's not much you can do about that, other than work your deals only with people you know, or at least with people who are "regulars" at the tournaments. If done by the book, so to speak, this is a nice way to lower your overall cost of entering, which also lowers your variance and that will likely allow you to enter more tournaments. Of course, it's not as much fun if you're the only winner in the group, but you have to look at these things from a long-term point of view.

Team-financed approach

This method is more formalized than the first one, but it involves only the team members alone. Let's say that 7 of you feel comfortable with each other, both from a skills point of view and an honesty point of view. If you all are frequent participants in a particular tournament, you might agree that a certain percentage - say, 20% - of any prizes won will be "skimmed" off the top and divided among the other players. For example, if 7 of you have each put up $1000 for the entry fee and one of your group wins it, 20 percent of that player's prize will go to the other team members in a proportional split. If more than one wins something, all of the prize money will be pooled together and then distributed to those team members that didn't end in the money. This is obviously a nice deal for those who didn't win anything and a bit painful to those who did, but over a large number of tournaments it should all come out in the wash. Again, it lowers the financial risk of all the participants, but still offers plenty of incentive for everyone to play their best. In fact, in some tournaments of the "winner take all" type, having a back-up deal like this will allow the various team members to be very aggressive, which is basically what it takes to do well in those tournaments. (If you don't know what a winner- take-all tournament is, see my series "Tournament Blackjack Training", which is in the archives on the Blackjack page here.) Obviously, you can place various minimums and limits on this approach to make it fair to all; don't take what I've written here as gospel, put your own twist on it.

Formalized team management

To me, the ideal approach is to treat Blackjack tournaments as a business, just like the title implies. This means having outside investors, a structured test for team members to gauge their skill level and a definite pay-out schedule that everyone knows beforehand. As an example, I would form a team of at least 10 players, solicit investments from non-players, hold regularly scheduled practice sessions and do my best to make it successful. With such an approach, I think a team could get in the money at almost every tournament we entered. I'd create and maintain a team bankroll that would come from both the players and outside investors, which would pay the entry fees for the team and then I would compensate everyone much as we do in "regular" Blackjack teams. The way we usually do that is to hold all funds until the initial bankroll is doubled. For example, if we began with a $30,000 bankroll, any winnings would be put back in the bank until it totaled $60,000. At that point, we'd "break the bank" and pay everyone off. The investors (and any players who also invested) would get 50% of the bank returned to them in proportion to their original investment; 35% of the bank would go to the players who actually ended in the money at tournaments (in proportion to their winnings) and 15% would go to the players who participated in each tournament, in proportion to the number of tournaments they played in.

You can easily see that the investors will get about a 50% return on their $$$, if the team is successful. To me, the risk warrants such a high return, because they get nothing if the team fails, although it's not a number that's etched in stone. One nice thing about tournament play is that everyone knows where each and every dollar is being spent, which is not always the case in a regular Blackjack team where people might over-bet or play craps when no one is looking. Also, because who won what is public knowledge, no player can claim to have won less than what s/he actually did and that eliminates the threat of stealing, so perhaps the investors can live with less than a 50% pay back. Now, remember that the players themselves can be investors; in fact, I would require every team member to invest at least something, so their $$$ are at risk, too. But almost certainly you'll have some good players who can't put too much money in, yet you'd want them on the team. That's why we always broke the bank when we doubled it, so smaller investors could get a bigger piece of the next bank. Of course players who do well in the tournaments are what make the whole concept work, so they must be rewarded. If I were to cut the investors' percentage, I'd increase the winners' percentage. Naturally, someone who's capable of ending in the money at a tournament might feel that they'll be better off doing it on their own, but if they have any experience at all, they'll be familiar with the variance of this business and should give serious thought to a team approach. As I said earlier, the luck factor is so high in these events that, literally, anyone can win. Maybe "anyone" can't win as often as a skilled player, but the variance is big enough for me to safely say that even the very best tournament players end in the money under 25% of the time (which is why I'd want 10 players on my team).

A small portion of the doubled bank would go to the players for just showing up at the various tournaments. You can't win if you don't play, so those that do should be encouraged to attend as many tournaments as possible. If nothing else, this "stipend" might serve to help with travel expenses, daily meals and so forth, although how the actual expenses over and above the entry fees will be handled should be a part of the team discussions prior to forming it. I've played on teams where travel expenses came off the top and I've played on teams where we each paid our own way and am definitely in favor of everyone paying all such expenses out of their own pocket because expense vouchers can deplete a bank rapidly. It's one thing to lose your $$$ while competing in tournaments and quite another thing to see your $$$ get sucked up by the guy who lives 400 miles further away from the casino than the rest of us. But, regardless of how they get there, if they compete in a tournament, they ought to get at least something for doing so. Again, this encourages those players who don't have a lot to invest to at least participate in as many tournaments as possible. Remember: the more team members you have in an event, the more likely the team will make $$$. And when it comes to Blackjack tournaments, it really is "all about the Benjamins."

I'll see you here next time.

 

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