Thinking Poker: Are Tournament Satellites Alchemy or Fool’s Gold?
You started playing online with a deposit of $500. Through study, hard work, and careful bankroll management, you’ve grown that to $5,000. When playing large-field multi-table tournaments (MTTs), you’ve required yourself to have at least 200 times the buy-in in your bankroll to enter a tournament. That means you’re now playing $20 MTTs on a regular basis and occasionally taking shots with buy-ins as large as $50 if the field is small (you’ll have lower variance in small-field tournaments) or the opportunity especially good.
Meanwhile the regularly scheduled MTTs at your local brick-and-mortar casino are beyond your means, so you haven’t paid them much attention. But you recently received in the mail an advertisement for a special $430+$50 tournament with a guaranteed prize pool of $10,000. It sounds exciting, but it’s so far outside of your bankroll that you can’t seriously consider playing it.
Then you notice that the casino will be running satellites in the weeks running up to the event, including daily $40+$10 events where one out of every 12 players who enter will win a seat in the main event. You’ve taken shots in $50 MTTs before, and you know that these will have far smaller and softer fields than what you encounter online.
Time to start grinding the satellites, right? Not so fast.
Many players are drawn to satellites because they seem to put exciting, high buy-in events within the reach of smaller-stakes players. Like the promises of medieval alchemists to turn water into gold, this seems too good to be true because it is. Satellites enable poker players to deceive themselves about the true cost of entering a tournament, but if you’re trying to be diligent about bankroll management, then you can’t afford to fall for this trap.
When you enter a satellite, you aren’t buying an entry into the target tournament. You are buying a chance at an entry into the target tournament. Here, you can either buy a seat in the main event for $480, or you can buy a 1-in-12 shot at a seat in the main event for $50. A little multiplication ($50 x 12) demonstrates that playing the satellites is functionally equivalent to paying $600 for a seat in the main event. Not only is that far beyond your bankroll, but it’s quite a bit more than you’d pay if you bought in directly. That difference is the 25% rake you’re paying in the satellites.
Now, in actuality, your chances of winning a seat in the satellite are probably better than 1-in-12. Let’s say that you’re so much better than the local competition that you can expect to win a seat in one of every eight satellites you enter. In that case, entering via satellite means you’re paying $400 for your seat — a nice discount compared to buying in directly, but still far more than your bankroll can justify.
The problem with satellites is that when you win, they don’t pay you in cash, they pay you something that is worth much less than cash to you, which is entry in a different poker tournament. How do we know that entry in this tournament is worth less to you than its face value in cash? Because you have $480 in cash, yet you are (wisely) choosing not to exchange it for an entry in the tournament.
Winning $480 in a satellite doesn’t magically make it a good idea for you to buy into a $480 tournament any more than winning $480 in any other tournament (or inheriting $480, for that matter) would. If you win the satellite, your bankroll is $430 bigger than it was before, but still not nearly large enough to justify entering this tournament. The problem is that once you win the seat, you generally have no choice but to enter.
If you’re able to sell the seat at face value, as can be done online or at the World Series of Poker, then it’s a different story. (Technically the tournament lammers used to pay satellite winners at the WSOP are not supposed to be exchanged for cash, but in practice it takes very little effort to sell them for face value.) Playing the satellites themselves could be a good idea, though you still wouldn’t be advised to enter the target tournament. Instead, cash out your seat, rinse, and repeat.
Finally, remember that satellites require time and money that could be invested elsewhere. If you are adequately bankrolled for the $480 tournament, you’d probably be better off buying in directly than playing the satellites, even though you’d have a positive expectation in the satellites. This is because, instead of wasting your time on a $50 MTT, you should be using that time to play larger buy-in tournaments where you’ll have a higher hourly rate.
Satellites don’t create money out of thin air. They are like any other poker tournament except that they structure their payouts in a unique way. If you’re dead set on playing a tournament outside of your bankroll, then play it, but don’t pretend that winning a satellite turns it into a responsible decision.