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How to Calculate ROI in Poker

From a poker player’s perspective, nothing is more important than analyzing your own game in attempt to find your leaks so that you can plug those leaks up and improve so that your profits will improve as well.

Generally, the first thing I look at when analyzing my game is my ROI. For those of you that don’t know, ROI stands for Return on Investment and is simply a figure of how much you made in comparison to how much you invested. This will be the one of the first things to check simply because most people realize there is a problem when they have not been showing a profit or have been inconsistent in comparison to previous months.

Now, before you can look at your return on investment you’ll first have to figure out what your ROI percentage is. It really isn’t all that difficult to calculate and while there are programs like Hold’em Manager or Poker Tracker that do this for you, not everyone will have these programs. I can even go on a limb and say that I can show you an equation that will calculate ROI just as fast, if not faster than any of these programs.

How to Calculate Poker ROI

As previously mentioned, calculating poker ROI is really simple using the following equation:

(Money Won – Buy In) / Buy In x 100 = Return on Investment Percentage

Ok, I’m sure the equation itself means very little without a real life example. So for an example let’s say that we bought into a $5 + $.50 10 man sit n go at PokerStars where they pay out the top three at 50% or $25 for first, 30% or $15 for second and 20% or $10 for third. To boost our ego a bit, we will of course assume that we won first place for 50% of the prize pool which netted us $25. What would our ROI be?

• Note: We will discuss this further below but ROI is typically only used for sit n go’s or tournaments.

Since we know that we won $25 for winning first and that it cost $5.50 to enter, we can now enter these numbers into our equation. The numbers below are color coded to correspond with the equation shown above.

($25 – $5.50) / $5.50 x 100 = 354% ROI

• Although it may seem obvious to some, it should be pointed out that even though the rake that is taken ($.50) isn’t a part of the overall prize pool, it should still be added to our equation. Just as a general rule of thumb,  if it comes out of your wallet it needs to be included. This would mean any add-ons or re-buys as well.

From utilizing our equation you will see that by winning our 10-man sit n go we have earned a 354% return on our investment. That is huge. That means that we have earned about 3.5 times our initial investment in profit. What a great return.

However, this high of a return is slightly misleading. Why? Well, we only played one game. It is important to look at poker as a life long session with all of our decisions and winnings based over a long period of time. Anybody can have a high return over the course of one or two games, but the real question is if they can do it over 500 or 1,000 games.

To put this into perspective, let’s say that we played 1000 $5.50 sit n go’s all of which are 10 man and have the same payouts. Over the course of 1000 games, we won first 100 times, 2nd place 113 times and third place 156 times. What would our ROI be now?

Well, the first thing we need to do is figure out how much we won total and how much we spent to play, or our investment. From here, we will plug in our numbers as we did in our first example.

• (100*$25) + (113*$15) + (156*$10) = $5,755
• 1000*$5.50 = $5,500

Now that we have our numbers, let’s plug them into our equation:

• ($5,755 - $5,500) / $5,500 x 100 = 4.63%

After a 1,000 game sample, we have earned a 4.63% return on our investment. That is much better and much more realistic. What this ultimately tells us is that we are earning about $.25 profit for every game we play.

That in fact leads to another common question; what is a good ROI? The answer to that isn’t very clear because there are so many different factors to consider such as the type of game played and the stakes. But if you were to twist my arm for an answer, the answer would be on average around 5% at the higher stakes since the competition is so much harder but can be up to 25% to 35% at the lower stakes if a player happens to be crushing the games.

So now that we have covered ROI for tournaments and sit n go’s, what about all of us cash game players? Well, as we previously mentioned the ROI equation will not work or work as well. But have no fear because figuring out how much you are making in cash games is in fact much simpler than figuring your ROI for sit n go’s and tournaments.

Cash Game ROI

Most of you are probably wondering why the ROI equation will not work for cash games. Well, the answer is very simple; none of the following variables is consistent:

• Buy in for any amount as long as it meets the minimum
• Winnings are inconsistent from session to session
• Get up and leave whenever they want

What these three bullets points do is provide a lot of inconsistency. Although the ‘getting up and leaving’ doesn’t necessarily affect the equation much, the inconsistent buy-ins will and winnings will. So with that in mind, it is much better to treat cash games as if you were on job making an hourly wage.

For example, let’s say that you went to the casino and bought in for $300 and after an hour, you had $450 in front of you. How much did you make?

· (Money Won – Buy In) / Hours Invested = Money Made Per Hour

· ($450 – $300) / 1 = $150 Per Hour

What if you played at the casino for a full 8-hour workday?

• ($450 – $300) / 8 = $18.75 Per Hour

As you can see, this is a much easier way to figure out how much you are making in cash games. The other way players look at their cash game winnings are by determining how many ‘big bets per 100 hands’ they earned. So for example, if you played 100 hands at $1/$2 and won $50, you would have a 25bb/100 rating.

How to Calculate ROI in Poker

In short, it really is easy calculating your own poker ROI and essential that you learn how to do so simply because the sooner you know something is wrong with your game, the faster you can act to correct it. In the end that is all that matters. The best players in the world got to the top simply because they spent the time analyzing their game, and the first thing to analyze, calculate and understand is your poker ROI.

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