In this blog post I will detail one of the most costly leaks that aspiring poker pros fail to comprehend or even acknowledge. I will also outline ways for you to plug this leak so it doesn’t destroy your bankroll. It should be noted that this post is for people who care about money. If you are super rich or simply do not care about money, ignore this post
I frequently get emails from my students detailing their poker trips. One of the most common mistakes they make pertains to how much time and money they spend to actually play a tournament series. It is not uncommon for someone to go on a poker trip for a weekend to play a $240, $340, and $550 tournament. The rake in these events is $40, $40, and $50, meaning they think they are paying $130 in rake. This could not be further from the truth.
While you must pay the casino $130 when you buy into the tournaments, you must realize that you have to spend WAY more money than that to actually play the events, especially if you have to travel to play it. Travel rake, which I define as how much you have to spend to play a tournament, comes in many forms, including travel costs, hotel bills, food, and parking. You must account for ALL of your expenses beyond what you would normally incur while sitting at home when figuring out if a poker trip will be profitable.
For example, it is not uncommon for hotels to give a discounted poker rate of $100 per night, which feels like a decent deal. However, if you were initially looking at spending $1,130 for a poker trip in order to have $1,000 in action ($240 + $340 + $550, from above), you now have to spend an additional $200 for a room. You also have to pay for food that is slightly more expensive than normal, perhaps to the tune of $5 per meal. If you will have 9 meals, that is an extra $45. You also have to pay for either gas plus wear and tear on your vehicle or an airplane flight to get to the casino. While this cost varies significantly, let’s assume it is $100, which is on the low side. This means you now have to spend $1,475 to get $1,000 in action.
Realistically, if you are a WORLD-CLASS player, you should expect to win at roughly 100% ROI, meaning for every $1 you invest, you should win $1. So, if you are investing $1,000, you should win $1,000 profit in the long run. It is worth noting that the long run takes a long time to even out. Expect huge swings in your bankroll along the way. You will certainly not win anywhere near a set amount on each and every trip. You will usually lose most of your tournaments and occasionally win one. Do not fool yourself into thinking you will win on all, or even most, of your poker trips.
Notice that you do not win on your entire $1,475. The extra $475 simply vanishes. So on average, you should expect to go for this poker trip and win $525 over the course of three days. While this is reasonably acceptable to most people, effectively giving away 48 hours (3 days – 8 hours of sleep per day) at the rate of $10.90 per hour, it is certainly not a great deal.
You should notice that in the above example, I made a few assumptions that make this situation favorable for the player. In reality, most players are not world-class. Most “good” players win at roughly 25% ROI, meaning they will win $250 on the trip, resulting in a $225 loss for the trip. Most of the time travel costs are WAY more than $100. A high percentage of poker players gamble at casino games while traveling, also costing them some amount of equity. Others go out and party or drink at night, reducing their expectation at the poker table. It is quite easy to butcher your profits while traveling.
Some players realize that short poker trips are a bad idea and make a point to take longer ones. Assume that instead of a weekend trip, they go on 14 day trips. They fly to a tournament series and play an event somewhere between $500 and $1,500 each day. Let’s average it out to $1,000 per day. So, as a realistic example, they get to invest $14,000, which comes out to $1,000 per day plus $100 rake. They also have to pay $500 for a flight plus $100 per night for their hotel room and perhaps $100 extra for food. Their total “bill” comes out to $14,000 + $1,400 + $500 + $1,400 + $100 = $17,400. This means they must win at a win rate of at least 17,400/14,000 = 124%, or 24% ROI to break even. Obviously the goal is to win, not break even. If the player is really good, winning at 50% ROI, he will win $3,600, which sounds pretty decent. However, once you realize the player had to devote two weeks of his life to win that amount while experiencing huge swings to his bankroll, it doesn’t sound like such a good deal.
In the high stakes poker world, the travel rake, which is often more costly in terms of dollars, is less significant compared to the total amount of money invested. For example, I recently went to Barcelona where I could invest roughly $50,000 in 10 days. I estimate the total travel rake was roughly $8,000. This means I had to win at 16% ROI (58,000/50,000) to break even, which I certainly think is possible for me.
More recently, I made the MISTAKE of going to the WSOP APAC in Melbourne, Australia. While I love the city and the venue, it is simply not worth it in terms of time and travel rake. I was going to play around $25,000 worth of events and had to spend $10,000 in travel rake. The math of 35/25 simply doesn’t work out because I have to win at 40% ROI to break even, which is tough in high stakes tournaments. I also had to invest 60 hours on an airplane. No thanks!
It is important to note that as your ROI diminishes, the amount of variance you will experience will go through the roof. If you consistently play with a 65% ROI, you will usually be on a fairly consistent upswing, but if you are playing with a 15% ROI, you will have gigantic swings, especially in the downward direction. Maximizing your ROI will help keep you sane because you will rarely go on devastatingly long downswings. I actually make a point to skip tournaments where I don’t expect to have a large ROI. I don’t play poker to gamble.
It is important to realize that travel rake occurs EVERY time you play poker. Even if you roll out of bed and play online, where the travel rake is minimal, you must realize that you are spending some amount of time to play. Those hours could easily be spent doing other things that make you money immediately, improve your future earning potential, or improve your happiness. If you fail to value your time, you are making a serious mistake because time is the only resource you cannot get more of.
It is worth noting that most people enjoy traveling to play poker. They derive happiness from it. If you told most amateur poker players that they could play poker for two weeks with relatively little risk and no potential of winning money in the long run, they would be thrilled. Most players love traveling to exotic locations and experiencing new cultures. There is certainly value to all of these things.
When you travel, I strongly suggest you spend time away from the casino. While this means you will play slightly less poker, you will learn about the world and hopefully enjoy your time a bit more compared to sitting at a poker table. I made the mistake of not experiencing the world, despite traveling all over it, during my first few years as a poker player. All I did was play poker. I now realize how stupid I was. I wasted time I can never get back.
I got to travel around Australia!
You can realistically add some amount of equity onto your ROI to account for the happiness and increased knowledge of the world you get from traveling. On the other hand, you can also subtract some equity from your ROI when traveling to places you don’t like. There are a few poker venues I will almost certainly never visit again because traveling to them is difficult and the venues are not nice. Even if they ran a super-soft high stakes tournament, I would likely not attend. I value my happiness quite highly.
As for my Australia trip where I did not expect to gain much poker equity, I actually made a vacation out of it, greatly improving the perceived ROI of the trip. I realized that going to Australia (at least for an American) is not something I will get to do too often. I spent two weeks after the tournament traveling around the country with my fiancée and one of her friends. It was an amazing time that I am glad I got to experience. That being said, I do not expect to go back to Australia anytime soon. It is simply too “expensive” in terms of travel rake.
Keeping Travel Rake Low
When possible, simply do not travel to play poker. If you have your choice between a $340 local tournament or a $1,100 tournament you have to travel to, play the $300 local event. For some simple math, if you win at 50% in both events but the $1,100 event requires $100 in travel, $115 for hotel/food, plus six extra hours of your life, you will win $150 from the $340 tournament (minus some minimal amount for travel) and you will win $285 from the $1,100 event. Notice that six hours of your life is likely not worth $135, which is the difference in the profitability of the two trips.
You should make a point to share hotel rooms with your trustworthy friends. I spend around 90% of my poker travel time rooming with at least one other person. Not only does this drastically reduce your hotel bill, but it also gives you someone to talk to about poker. If you constantly discuss poker and question your strategies, you will improve, increasing your win rate. You may also be able to share a car ride with your friend, saving gas money.
Different than a hotel
I have recently started staying in private apartments instead of hotels, especially when traveling to expensive venues. For example, in Barcelona, I booked a place for the 10 days through airbnb.com at the cost of $100 per day. This was a huge discount compared to the hotel rooms at the tournament venue, which were $300 per night. It is also nice to get away from the poker area and enjoy the city on a daily basis. Just be sure to be safe!
This should be obvious, but you should not stay in gigantic suites or fly in first class. I have known many poker players who have gone stone broke because they thought they had to indulge in these luxuries. While splurging on these experiences is nice from time to time, if they become the norm for you, expect to watch your bankroll slowly diminish.
Make a point to sign up for frequent flier programs and hotel rewards programs. While these things will not bring in huge amounts of money, every little bit helps.
I have started traveling with some food, mainly because I am working hard to be healthy, but also to keep my expenses down. I usually have some form of a green smoothie for breakfast and lunch each day. Given the smoothie only costs around $5, I save at least $5 every time I have it instead of buying breakfast or lunch somewhere.
My water stash
When possible, get comps from the tournament director or casino host. Lots of casinos offer various discounts for poker players, such as cheaper hotel rooms and food vouchers. In Australia, I realized that the bottled water in the hotel room cost $5 each. I found a refrigerator in the tournament area that had free water. I stocked up each day and ended up with lots of water to drink in my hotel room. You will find that most hotel spas stock free fruit and nuts you can have as well. In Barcelona, the EPT registration booth had coupons to get a gigantic spread of food at nice local restaurants for $13. It was an absolute steal.
I strongly suggest that you avoid all vices while on your poker trips. If you are out clubbing all night, you will be hung over and tired the next morning. If you spend your time, energy, and money gambling in the pit, you will certainly be a loser in the long run. If instead, you spend your time sleeping well, meditating, eating right, and working out, things are much more likely to go your way.
Assuming you are good at other forms of poker, such as satellites and cash games, you can spend your free time playing those. Even if you win only $100 per day, that will become significant in the long run. I typically play a decent amount of cash games (as long as the rake is low!) and also a few satellites. For example, during my trip to Australia, I spent around 15 hours playing satellites and cash games, winning $7,000. In Barcelona (where I won $6,000 on the side), I only played satellites because the cash game rake was gigantic.
If You Must Travel
I recognize that lots of people simply must travel in order to play poker because there is no casino in their town. Assuming you must play poker (no one ever said you MUST play), plan your trips intelligently and do the math ahead of time to see if you can realistically turn a winner. If it is simply not possible, there is nothing wrong with traveling to play with the understanding that you are going to lose in order to learn and to have a good time. You can also play online for tiny amounts of money to get experience. If you know that you are not going to win money from a poker trip, ask yourself why you want to go play it in the first place. The way you answer that question will determine your course of action.
While traveling the world (or region) playing poker can be fun, exciting, and rewarding, it can also be the unseen leak that slowly depletes your bankroll. Once you become mindful of your spending, you will discover numerous ways you can save money, allowing you to continuously grow your bankroll.
If you enjoyed this post, please share it with your friends on twitter and facebook. Are there any steps you take to keep your travel rake low that I didn’t mention? If so, please share them in the comments section. Thank you for reading.