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Time is money

Harrah’s are labelling their decision to delay the final table of the World Series of Poker Main Event until November an "enhancement".  From a player’s point of view I really can’t see why it’s a good thing.

Taking a day or two off in the middle of a marathon tournament is one thing.  Indeed, if you are drawn to play on Day 1A you already have to take a 4-day forced break before day 2A begins, then everyone gets at least a day off before all the players merges into a single Day 3.  Another day off before the final table after 6 long days of poker is probably a welcome break.  But a four month hiatus once the end of the road is in sight – and when you must be In The Zone to have got that far – is just a bit of a nonsense.

The point has been made that you could use this time to get some coaching and study the play of your opponents, but how exactly are you going to study the play of the eight other unknowns who haven’t played a single hand on TV yet.  That’s actually the whole point of this stupid rearrangement - to accomodate ESPN.  Are they really going to give the players a few hundred hours of unedited tape to wade through?  I doubt it.

What I really wanted to know though was just how much the players might be losing in potential interest on their payouts as a result of having to wait nearly four months between Day 7 and Day 8.  This is the richest "sporting" event in the world, after all, and the prize pool is pretty hefty.

I’m going to base the calculations on last year’s field, because that means the full payout information is readily available and there’s no reason to assume there will be wildly different numbers this year.

In 2007 there were 6,358 entrants, each paying $10,000 to play.  There’s a total 6% taken from the prize pool for the house and tournament staff which, accoording to my calculator, is about twenty grand more than the $59,784,954 prize pool published.  I have no idea how this number could end in anything other than two zeros.  It’s must be just good old-fashioned skimming.

Just over a third of the total prize pool is given to the top 9 spots – $22,019,901 in total.

This year, once the final table has been determined, each of the remaining players will be given 9th place money straight away and when they return in November they’ll be playing for the difference.  9th place last year was worth $525,934, so, based on last year’s numbers, that would be a further $4,733,406 paid out in July.

Therefore the amount of the prize pool left unpaid during the hiatus is $17,286,495.  A cool seventeen million – or about $1.9m per player – still to play for.

The interest rates for savings on the US Dollar are far from great at the moment.  However, after a quick shop around the net I found a certificate of deposit product that offers 3.3% APY, but over a four month fixed term.  That’s almost a perfect example – the delay before the final table is 117 days.

I just plugged these numbers into an online interest rate calculator and the answer comes in at round about $180,000.

That’s 18 Main Event buy-ins.  Or, it’s twice as much as the nine remaining players will have paid for their seats in the first place.  Although it pales in comparison to the $3.8m total rake taken out of the prize pool for this tournament, $180,000 is hardly insignficant.

Quite what it’s worth to Harrah’s for hanging on to it for the same amount of time I couldn’t really say.  $17m is probably just a drop in the ocean to the world’s largest gaming corporation, but nevertheless it’s money that doesn’t belong to them, yet they know that they will have custody of it for a fixed – and reasonably long – period of time.  It’s certainly investable, one way or another.

Suddenly the offer of an all expenses paid trip for two for each of the finalists to return to Las Vegas in November to play out the end of the Main Event doesn’t seem quite quite as generous.  Even I can get a free suite at the Rio!