Should you try to become a professional poker player and what are poker players earnings? These are challenging questions to answer. In my last post on mortgages for poker players I talked about the difficulties that poker players can have getting financing for property purchases. Now lets focus on the big questions…. Should you be playing poker? What are poker players earnings in todays games?
The answer is that it really just depends… Poker players earnings are incredibly unpredictable. I know that isn’t what you wanted to hear but there are a lot of factors that determine how much a poker player might make in a year. The two most important determinants of how much a poker players makes are.
Poker players earnings at midstakes cash games and tournaments have been known to vary widely. I have known several players to make in excess of $100,000 in a year playing in midstakes games. How they achieve this number will vary tremendously. Some players are massive rakeback grinders some are huge winners and highly selective with their tables. I’ve talked extensively about table selecting and bum hunting in the past.
In order for a mid stakes poker players earnings to exceed $100,000 they will likely need a winrate that is in excess of 5 BB/100 unless they play major volume. The reason for this is simple.
1,000 hands per day * Avg work year (265 days) = 265,000 hands
If a midstakes poker players earnings are 5bb/100 at an average stake level of $2/$4 NLHE their winnings would equal.
5BB * $4 = $20 per 100 * 2650 (which comes from 265,000/100) = $53,000. Generally, there will be some player benefits mixed in as well which might amount to $10,000-$20,000. Bottom line is for a poker players earnings to exceed $100,000 they need to be crushing it with their winrate or with volume…. Deciding which track is the one you are most suited for is a decision that should be based on an individual players personal preferences and strengths.
Generally I would say these players are making under $50,000 per year. Many of them may not even crack $30,000 in a year. In order for a low stakes poker players earnings to exceed $50,000 per year they would need to play an enormous amount of hands. Its always better to think in terms of BB/100 rather than in absolute $ amounts. The $ amounts that you make or lose are a function of your BB/100, the # of hands you play, and the stake level you play at. Poker player earnings are low and low stakes because even if you have a high BB/100 the stake level is still too low for it to really add up. Its not until players hit $1/$2 and really $2/$4 that you can start to make some real money at the game.
Most of these players are supporting themselves in some other way and will generally play no higher than $100 buy-in games. Unfortunately, the house rake adds up at low stakes games and it can be quite difficult to beat the rake by a significant margin. Some low stakes players are able to make the leap up toward mid-stakes, but this is incredibly challenging even for the most skilled low stakes players. Why? Because the mid-stakes are loaded up with pros who have years of experience often playing in high stakes games but have moved down stakes as a result of the challenging poker environment we face today.
One of the best words of advice that I can give low stakes players today is to steer away from playing at PokerStars. I recently road a blog post about quitting PokerStars, and think its a must read for anyone starting out in the game today. Poker player earnings are significantly lower on PokerStars at low games because win rates are lower in my experience. There are some exceptions with volume players, but volume is generally not a problem to find at low stakes across multiple networks on the web. I would definitely look elsewhere…
This is one of the harder issues for many players to handle. Variance in poker doesn’t simply mean that you experience a downswing. The harder part about variance in the long term is that it creates uncertainty as to what you can reasonably expect to make. Take a look at this ugly downswing that a highly skilled player I know recently experienced. This graph should serve as a good reminder that poker players earnings can, and do vary dramatically.
You can disregard this if you live in a country which has national health care (like Canada where I live). One thing that players often fail to account for is that, as a professional poker player, you have no employer-funded benefits. We all know that good health care can be very expensive. You may think it’s not a big deal- you’re young and healthy, and you can get a basic plan pretty cheap. That’s fine, but take a moment to think about your future. Do you plan on marrying or having children? Do you want your spouse and children to have more than basic emergency medical coverage? Buying a basic plan for yourself is one thing, but paying health insurance premiums out of pocket for an entire family can seriously cut into your earnings. Also, as you age, premiums can go sky-high. And we’re not even considering the possibility that one of your family gets really sick. Many of you may live in a country where your government provides universal health coverage. But if you live in a place that does not, it is definitely something worth considering while budgeting how much you will need to earn in order to support your standard of living.
While health care benefits are an immediate concern, a longer term consideration is your retirement plan. Often employers have plans where they will contribute to your 401k plan, CPP (Canadian Pension Plan), or some other retirement plan for you. In some cases they will match your contribution up to a certain point. As a poker player you will not have any such benefits. In addition, in the US you will be subjected to the “Self-Employment Tax.” This basically means that you have to pay the employer and the employee contributions to Social Security or its equivalent. Depending on how much you make, this can be thousands of dollars per year. Also, you will need to plan on creating your own additional retirement fund. Given the poor financial position of government-run retirement plans around the world, it would be very prudent to do your own planning in this regard. As there isn’t an established system for this in place, planning on your own can be challenging for many people, especially those with little to no background or knowledge in finance.
Hahaha, income stability and poker don’t go hand in hand. Poker players earnings tend to vary dramatically from year to year. If any worker’s union in the country was forced to take a 20% pay cut overnight, they would strike and take to the streets in protest. Yet for poker players, a far worse fate can befall you and there is no effective way to fight it. Tightening government restrictions around the globe have put a serious damper on the money to made at poker games. Since the UIGEA (Unlawful Internet Gambling Enforcement Act) was passed in 2006, many poker players have seen their incomes decline significantly. In fact, after Black Friday, it was not uncommon to see professionals in the United States lose 70%-100% of their income as a result of Black Friday. Many of them also lost access to their bankrolls in Full Tilt Poker, which went bankrupt.
Another factor reducing income stability in poker has been the global movement toward ring-fencing online poker games. The term “ring-fence” refers to when a government restricts outsiders from playing with players in their own country. The result of this has been a significant reduction in the number and size of cash games that are played online. Worse still, ring-fencing has not reduced the pool of high caliber professional players as much as it has reduced the pool of recreational players. This is because when recreational players can’t conveniently find games to play, they simply don’t play. Professionals, on the other hand, rely on poker for their livelihood and will go to great lengths, perhaps even moving to other countries, in order to be able to continue their careers. Hundreds of professional poker players left the United States following Black Friday, many of them relocating to countries such as Canada and Mexico where government restrictions are not as tight. The shifting legal environment surrounding the legality of online poker makes being a poker professional challenging.
One more consideration is the lack of social status and/or social support that poker players receive. Relatively few people have a generally positive predisposition toward poker players in the way they do toward many other more “socially acceptable” professions. You might pay for this to some degree in your interactions with family and friends, in some cases rather seriously (ie. if someone has a religious or moral opposition to gambling and cannot support your decision).
It can also be challenging when you meet new people. Rather than receiving the benefit of the doubt when you first meet people and introduce yourself as a business owner, doctor, teacher, or carpenter, instead you will often be met with incredulity, surprise, or even condescension (though some people will think it is awesome!). Furthermore, I can guarantee that every single time you tell someone what you do, the same conversation will ensue, with the same questions (“You can make a living doing that? A good living?”), and you can never get away with a quick answer. You will often get judged as reckless or lazy, and many people will believe it is only a matter of time before you gamble away your house and everything you own. Obviously, the people you have close personal interactions with will hopefully endeavor to understand what you do, and how you do it, rather than simply judging a book by its cover, but this is certainly an obstacle for many to overcome. Keep in mind that first impressions do matter in this world, and yours as a professional poker player might not be as positive as you would like it to be.
Your current decision to pursue poker as a career may also have an adverse affect on future career opportunities. Generally, in the corporate world when you make a decision to take Job A vs. Job B, it does not preclude you from later working at Job C. However, choosing poker as your career path can be a limiting decision because it may be difficult to reverse your decision at a later date and re-enter the work world. Though you will have been working, and probably quite diligently, many employers will view this as a period of unemployment and a significant negative “blank period” on your resume, especially if your results have been less than stellar. Even those who don’t see it as a negative will struggle to understand what skills and abilities you may have gained during this period of your life. At best it will be a difficult sell later in your career, and at worst you won’t even get a look because of it. Before you take the plunge, make sure you put some serious thought into any future career in which you may be interested, and how spending some years as a poker player might affect that.
Here are a couple of hypothetical scenarios, which in my experience occur on a frequent basis.
Ex 1. You make on average $50,000 per year at poker for ten years. Over ten years your gross income is $500,000. During those ten years your yearly income varies between $20,000 and $80,000, with a 5% chance each year of losing your entire bankroll and needing to find a “real” job. Does this sound appealing to you? Perhaps…
Now compare that to a 9-to-5 job where you start out earning $35,000 per year. In my opinion, if you are capable of making an average of $50,000 playing poker over a ten year period your work ethic, discipline, and intelligence are more than high enough to make $35,000 per year at a normal job. Assume you take a “normal” job and your income grows at an average rate of 5% per year as you move up the ranks. By year ten you will be making around $57,000 annually. The first few years of this scenario favor choosing poker, but between years seven and eight, with your normal job you will surpass the earnings of the poker player. More importantly, at the end of this ten-year period, your resume will look strong and you will likely continue to move up the pay grade.
If you carry this on for twenty years the results are even more dramatic. By the time you have been working for twenty years, your income will be just below $93,000. Add in health and retirement benefits if your company has them, and you will be making more than double what you would be as a poker player. Don’t forget that constant inflation will make your living expenses continually higher over the course of those twenty years, while your poker income will remain about the same, making your relative income significantly lower than when you started out. Unless the freedom of the poker lifestyle compensates for a dramatic pay reduction over time, I would seriously reconsider taking it up as a full time job under this scenario. There are plenty of starting jobs that pay close to $50k per year, such as financial analysts, computer programmers, teachers, traders, or sales representatives. In the vast majority of careers, more experience leads to an increase in pay, so long as you are a decent employee. This is not the case as a poker player, especially considering that the games tend to only get tougher over time.
Ex 2. You are able to make an average of $100,000 annually at poker for ten years. Should you become a professional poker player now? Remember, poker players earnings are not that predictable and can vary dramatically. The answer is still not clear-cut. A lot will depend on what you do with the money that you make early in your career. To some extent you could be mortgaging your future. You are accepting a higher rate of pay immediately, while recognizing that you are potentially passing up on other lucrative careers that may earn less now, but will almost certainly earn more in the future. Most poker grinders will struggle to consistently make $100k per year over the course of ten years. At this level of earning, you are undoubtedly a highly accomplished and refined poker player. If you are able to get to this point you are probably a talented, hard-working, and disciplined individual. Think for a moment about what you could achieve financially if those skill were utilized in an alternative manner. What could you accomplish in the corporate world? How successful of an entrepreneur could you be?
Your decision will be a personal one that neither I nor anyone else can make for you. It is important to be completely honest with yourself because only you know how much you are actually capable of earning, how much money you need or want, and how you personally can handle the emotional roller coaster that is professional poker.
All that being said, the benefits of this career path are obvious. What other career allows you to rise through the ranks quickly with no significant barriers to entry except your own abilities? How many other jobs allow you to take vacation whenever you want, or take a daily nap at 1pm? In many ways, I think that poker is analogous to the Wild West of early America. There is tremendous opportunity for a great life for those who are resourceful and hard-working, but at the same time there are many risks and pitfalls. How your career turns out will ultimately be up to you. Good luck with your decision!
For those of you who don’t already know I have a very popular book “Exploitive NLHE”, which is perfect for NLHE players who already have a fundamental understanding of the game and are looking to improve further. I strongly encourage you to check it out.
By Paul Ratchford (ThePokerCapitalist)
P.S. If you have a dog and play poker be sure to check out GoFetch.ca for all your pet care needs.