ITH Poker Forum

[GWL666]

I am having an argument with a famous Texas Hold’em Limit author about what it means to win 1 Big Bet per hour, e.g. $60 in a $30/$60 Texas Hold’em Limit game. To win means to cover the blinds you had to pay and 1 Big Bet of $60 in an hour, under the following assumptions. Win mean what you collect from the table after the rake has been taken out or net winnings after the rake. In this example there are no rakeback considerations.

The assumptions are as follows:
1. $30/$60 Table
2. 9 players
3. 36 hands dealt per hour
4. Small blind $15
5. Big blind $30
6. 4 complete orbits in one hour (36 hands per hour/9 players = 4 complete orbits per hour)
7. Each player must pay $45 in blinds per orbit (i.e. SB $15 + BB $30 = $45 per orbit)
8. So in 4 orbits each player would have had to put in $180 total blinds.
9. Add to that add 1 Big Bet of $60, then the total is $240 per hour ($180 +$60 = $240)
10. So a player would have to win/collect (after rake is deducted) a minimum of $240 per hour to win 1 big bet of $60 per hour.
11. Again, this is the hourly bench mark that you must achieve.

These calculations are a mathematical reality and have nothing to do with how good a player you are.

Some players will win more per hour and many will lose more; but the minimum of $240 per hour does not change if your goal is to win 1 big bet of $60 per hour at a $30/$60 table.

If you steal many blinds and win many pots, you will collect the $240 per hour faster than players who are losing; but, the minimum you must win/collect per hour is $240 if you want to earn 1 big bet of $60 per hour. If you collect more than $240 per hour, you are making more than 1 big bet of $60 per hour. And of course if you are losing, you will have to recoup what you have lost too.

Is this such a hard concept to understand or am I missing something?

[Fenris78]

I believe the reality is much more complicated than that. The question is: Where do your winnings come from? You say:

If you steal many blinds and win many pots, you will collect the $240 per hour faster than players who are losing; but, the minimum you must win/collect per hour is $240 if you want to earn 1 big bet of $60 per hour.

And I think that's the point where your assumptions become too simplistic.

Your winnings in any form of poker come from making better decisions than your opponents if they were in the same spot as you. The famous 1BB/hour does not come from winning $240 while paying the blinds. They come from making many small decisions that are worth a small fraction of a big bet that in the end are worth more than the rake you paid. Simplest example: There are 5SB in the pot and you have nothing but a gutshot that never win unimproved. If your opponent bets and you fold, you made a better decision than someone who calls this bet which in the long run is costing him a fraction of a small bet.

Also, thinking about winning one big bet per hour as you do, seems like you don't properly understand variance and statistics. Your goal in poker is not to win $60 in every given hour that you play. Your goal is to make the best decisions properly so that after playing for very many hours, your winnings divided by the hours you have played equal as high a number if big bets per hour as possible.

Hope I could clarify that a bit.

[nsidestrate]

I'm not sure I understand where the point of contention is between you and your friend. Your math seems solid, but this is an average. You might well win much less (say, $100) for a few hours and then have a big hour where you make up for your prior losses.

If your conclusion is that you have to steal more blinds in order to ensure your winrate, then I disagree.

[mchilger]

GWL - mathematically I don't have a problem with your analysis. It's a simple fact, in order to win you have to win back more than you have paid in blinds (as well as the bets you make in pots you lose). To win, you make better decisions than your opponents. Despite a lot of money going into and out of your stack during an hour of play, a good player should expect to make about one big bet an hour on average in the very long term.

Matthew

[Piemaster]

I'm still confused about what the actual question/point of contention is.

[GWL666]

Thanks for the feed back. This was just a simple math exercise.

The contention in all this was that a famous limit poker author and renowned player told me that my math was way off and that I was off base. I posted this to prove that my math was 100% correct and this famous author was missing my point. Another contention is that most players do not figure out what they must win per hour to show a profit at the various limit levels to have net winnings of 1 big bet per hour.

My point was that you can apply simple math in the form of a breakeven analysis with one variable of 1 big bet per hour to determine exactly how much per hour would must win after rake and paying the blinds to make 1 big bet per hour.

I am amazed at how difficult some are trying to make this simple math problem about having net winnings of 1 big bet per hour or $60 per hour in a $30/$60 limit 9 handed game where 36 hands are dealt per hour which would mean 4 complete orbits where each player would pay $45 in blinds each orbit and there would be 4 orbits in 1 hours. So each player would have to pay blinds of $180 per hour regardless of whether they won or loss; each player would pay a total of $180 in blinds. And, in these case winning are the amount you collect after the dealer has taken the rake.

Simply put, you must win enough after the rake to pay for the blinds you have had to put in plus that 1 Big bet per hour. If you have won many pots and won a $1,000 you have made mover that 1 big bet per hour and more than covered the blinds you had to pay; but if in an hour you have won exactly $240 after the rake, you have won exactly 1 big bet of $60, which is your profit. If you started with $180 in chips you would walk away with $240 chips, which means you made a profit of $60 or one big bet.

[Harlequin99]

GWL, you are making this far more complicated than it really is. Add up all your net profit/losses from each of your sessions and divide by the total number of hours you have played. This is will give you your win rate for this sample.

Talking about how many blinds you have posted each hour and how much you have to win to overcome this isn't really a good way of looking at it - you do not "lose" the blinds since they are live i.e. you always have more than 0% equity when you post the blind.

Edit: Whoops, did not realise this was so old!

[GWL666]

GWL, you are making this far more complicated than it really is. Add up all your net profit/losses from each of your sessions and divide by the total number of hours you have played. This is will give you your win rate for this sample.

Talking about how many blinds you have posted each hour and how much you have to win to overcome this isn't really a good way of looking at it - you do not "lose" the blinds since they are live i.e. you always have more than 0% equity when you post the blind.

Edit: Whoops, did not realise this was so old!

The debate was not about win rate per hour. I got into a debate with another famous poker author about what you had to win in an hour to show a 1 big bet per hour profit. The math was so simple to me that I could not understand why this famous author could not get it. So I emailed Matthew Hilger to see if he agreed with me. As you can see from his post and other post, he and they agreed with me.

And, I am sorry, you do lose the blinds if you do not win that pot. It is true that they are sunk costs because you are forced to put them in; but, they are part of your cost of playing the game. If you tip the dealer live, that is also part of your cost per hour that you have to cover with your winnings.

I am a CPA Accountant who has been doing break-even analysis for over 30 years. I just don't understand why so many people make this far more complicated than it really is. It is simple math.

[Harlequin99]

I got into a debate with another famous poker author about what you had to win in an hour to show a 1 big bet per hour profit.

I am a CPA Accountant who has been doing break-even analysis for over 30 years. I just don't understand why so many people make this far more complicated than it really is. It is simple math.

I don't mean to sound like an arse, but the amount you have to win in an hour to show a 1 big bet per hour profit is 1 big bet. So in a $10/$20 game you have to win $20 per hour to show a 1 big bet profit. I don't really understand what your discussion was about..

[Do you mean the gross amount you need to win? - you have to win one more big bet each hour, than you lose each hour, on average]

Am I missing somthing?

[GWL666]

I got into a debate with another famous poker author about what you had to win in an hour to show a 1 big bet per hour profit.

I am a CPA Accountant who has been doing break-even analysis for over 30 years. I just don't understand why so many people make this far more complicated than it really is. It is simple math.

I don't mean to sound like an arse, but the amount you have to win in an hour to show a 1 big bet per hour profit is 1 big bet. So in a $10/$20 game you have to win $20 per hour to show a 1 big bet profit. I don't really understand what your discussion was about..

[Do you mean the gross amount you need to win? - you have to win one more big bet each hour, than you lose each hour, on average]

Am I missing somthing?

Read the original post and note that Matthew Hilger agreed with my post, as did others. The other poker author in question had no idea how to do a breakeven analysis and add 1 BB per hour. It is simple math. I applied breakeven analysis which is used in business making decisions all the time. Breakeven is where you have covered all your variable and sunk costs. Sunk costs in poker are your blinds and rake. The variable is 1 big bet per hour. So how much would you have to win per hour to cover the blinds you put in and to cover the rake. First you figure out the total blinds you would have to put in an hour. So your net winnings (winnings minus rake = Net winnings) have to be equal to at least what you paid in blinds for that hour of play. So if the blinds are $100 per hour, your net winnings must equal at least $100 per hour for you to breakeven. If you add one big bet per hour, e.g., $60. Then you must have net winnings of $160 per hour to show a profit of $60 per hour.

So if you started with $200 and walked away after 1 hour with $260, yes you have a net profit of 1 big bet of $60 in that hour. But, you would have had to win at least $160 per hour to show that profit of $60 per hour.

[jeffnc]

I'd like to know the precise reason this "famous" poker player said you were "way off base".

In a sense, you seem to be proposing a tautology, which is pretty uninteresting. When you do that, people tend to look for hidden meanings, tricks, or traps, or start to debate semantics.

For example, you seem to be treating blind money as some sort of fee that has to be paid. In that case there would be no difference between your scenario and one in which you paid an hourly rate to the casino to play (a scenario more common in higher stakes NL games.)

In reality, there's a big difference, and the reason is pot equity. If you pay your big blind, it is not money that is just "lost" or "paid" to the casino, it is money that is in the pot, and if you did not fold your big blind, you have some equity in the pot no matter what your 2 cards are. That means that you have not just paid your big blind as a "fee".

Therefore, I could just as likely create an even more complicated scenario than you did, by calculating my pot equity every time I'm in the blinds, based on game conditions (how tight or loose I am able to play, when playing a strategy that will net me exactly $60 per hour in the specific game conditions I'm playing under.) For example, let's say the game is a limp fest, and I get to play about every big blind without a raise. I might calculate that I have 50% equity of my big blind. That means that the big blind really only costs me $60 per hour, not $120, because of my automatic pot equity. Now your total cost per hour is $180 instead of $240. So I'd have to collect $180 per hour to make $60 per hour.

You are probably starting to see how meaningless this is - I simply calculated a different tautology with different assumptions. You could add the rake amount and the average number and size of pots won per hour as well, in addition to tips. Then you just juggle the numbers to once again add up to $60 profit. All that you are saying is that to make $60 per hour, you must net $60 per hour.

Maybe if you told us exactly what the other author said, we could help you understand this better.

[jeffnc]

I am amazed at how difficult some are trying to make this simple math problem

Intelligent and experienced forum readers on a site such as this will automatically assume that you did not come here to tell them that to make $60 per hour you must net $60 per hour. They will assume you had a more meaningful point to make, or perhaps have some vague question buried in your analysis.

Since your tone is antagonistic and you seem to have some sort of chip on your shoulder, readers will further tend to assume that there is something controversial in your statement, and naturally go after it. I suppose you think that's "fun", for some reason.

[GWL666]

[quote="jeffnc"]I'd like to know the precise reason this "famous" poker player said you were "way off base".

In a sense, you seem to be proposing a tautology, which is pretty uninteresting. When you do that, people tend to look for hidden meanings, tricks, or traps, or start to debate semantics.

For example, you seem to be treating blind money as some sort of fee that has to be paid. In that case there would be no difference between your scenario and one in which you paid an hourly rate to the casino to play (a scenario more common in higher stakes NL games.)

In reality, there's a big difference, and the reason is pot equity. If you pay your big blind, it is not money that is just "lost" or "paid" to the casino, it is money that is in the pot, and if you did not fold your big blind, you have some equity in the pot no matter what your 2 cards are. That means that you have not just paid your big blind as a "fee".

Therefore, I could just as likely create an even more complicated scenario than you did, by calculating my pot equity every time I'm in the blinds, based on game conditions (how tight or loose I am able to play, when playing a strategy that will net me exactly $60 per hour in the specific game conditions I'm playing under.) For example, let's say the game is a limp fest, and I get to play about every big blind without a raise. I might calculate that I have 50% equity of my big blind. That means that the big blind really only costs me $60 per hour, not $120, because of my automatic pot equity. Now your total cost per hour is $180 instead of $240. So I'd have to collect $180 per hour to make $60 per hour.

You are probably starting to see how meaningless this is - I simply calculated a different tautology with different assumptions. You could add the rake amount and the average number and size of pots won per hour as well, in addition to tips. Then you just juggle the numbers to once again add up to $60 profit. All that you are saying is that to make $60 per hour, you must net $60 per hour.

Maybe if you told us exactly what the other author said, we could help you understand this better.[/quote

GWL666 Response: This is a simple breakeven analysis. Read Matthew Hilger's response. And, yes if you tip the dealer that would have to be factored in. If you drive to the Casino versus playing online, they you have to factor in the cost of gas and wear and tear on your car. I think you are starting to get it.

That is what accountants and CPAs (like me) do for a living when we do profit and loss analysis and breakeven analysis.

Pot equity has nothing to do with a simple profit and loss analysis or breakeven analysis. Pot equity has a lot to do with making decisions on wheter to play a hand or even to bluff.

[GWL666]

I am amazed at how difficult some are trying to make this simple math problem

Intelligent and experienced forum readers on a site such as this will automatically assume that you did not come here to tell them that to make $60 per hour you must net $60 per hour. They will assume you had a more meaningful point to make, or perhaps have some vague question buried in your analysis.

Since your tone is antagonistic and you seem to have some sort of chip on your shoulder, readers will further tend to assume that there is something controversial in your statement, and naturally go after it. I suppose you think that's "fun", for some reason.

Only you! Matthew Hilger got it!

[jeffnc]

And, I am sorry, you do lose the blinds if you do not win that pot.

In the context of averages per hour, that's not true. Obviously when you win you win and when you lose you lose, but if you're looking at $60 per hour, there will likely never be an hour where you actually make $60. You have to consider your blinds only partly lost when you do not win the pot, and only partly returned when you do win a pot, if you are going to average your profit per hour.

It is true that they are sunk costs because you are forced to put them in; but, they are part of your cost of playing the game.

If that is true, then every time you play any hand ever, it is a "sunk cost". If you raise under the gun with pocket aces, that would also have to be counted as a "sunk cost" if you are going to count blind as "sunk cost". To see that this true, show how you could ever make $60 without ever voluntarily putting money in the pot.

So you would technically have to adjust your calculations to account for how many hands you raised with per hour, or called with per hour, and how much money you put in on average for the flop, turn and river.

In fact it doesn't matter what calculation you come up with, because to make $60 per hour, you would just add in the appropriate numbers to make it come out to $60 per hour. Tautologies are like that.

I am a CPA Accountant who has been doing break-even analysis for over 30 years.

If you're saying you've broken even at your job over the past 30 years, I could believe that.