BLOG – Are PokerStars losing out on WCOOP overlays?

BLOG – Are PokerStars losing out on WCOOP overlays?

Wednesday, 15 September 2010

It’s routine to see some overlays in guaranteed prize pool poker tournaments. A $1,000 buy-in event may guarantee a $250,000 prize pool but if only 229 players register then the tournament hosts have to delve into their own pockets for that extra $21,000. And that means some nice +EV for the players who make the money.

Full Tilt Poker’s FTOPS series sometimes suffers from overlays. Remember last year when the majority of events failed to meet their guarantees? I’ve nothing against Full Tilt Poker, mind – it’s one of my favourite sites, but I thought that perhaps the reason they had so many overlays is that the FTOPS runs every couple of months. The WCOOP occurs every year and seems to always meet guarantees, perhaps down to the anticipation.

Now we see that of the four events played yesterday, three failed to meet their guarantee. Have PokerStars overestimated the WCOOP? Are they going broke? Well, they didn’t overestimate I would say. Some would argue (you notice that when a journalist says that ‘some’ think they’re just inserting their own opinion lazily disguised as fact?) that a $150,000 guarantee on a Seven-Card Stud event needing 500 players is ambitious but to be fair to them, 497 players turned out for what is considered an old man’s game in a young man’s world.

This is the pertinent point – did they lose money? Obviously PokerStars won’t be filing for bankruptcy any time soon but I’m curious to know if the rake taken from the entrants is enough to cover the missing prize pool. Obviously in the case of the Stud event it is, as the 497 players generated $9,940 in rake – PokerStars had to use $900 of that to meet the guarantee.

What about the $530 2-day NL event? This one is surprising – though a $3,000,000 guarantee is huge it’s certainly not ridiculous to think that 6,000 people would enter. Apparently not – 5,799 players meant an overlay of $100,500. The entrants generated $173,970 in rake meaning PokerStars still took a $73,470 payday on the event.

Finally, the 4-max NLHE. A $700,000 guarantee required 3,500 players and in the end PokerStars received 2,915 players meaning an overlay of $117,000. This time they had to shell out – 2,915*15 = $43,725 meaning that $73,275 of the guarantee was provided by PokerStars themselves.
Overall, though, they’re up even with that $73,275 payout. Overall in the three events, PokerStars made a profit of $9,235. You can see why guaranteed prize pools, when estimated correctly, are a genius idea.

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