Poker tournaments can be very confusing for those new to the game. Although they’re probably the most popular format out there, new poker fans frequently don’t understand how they work and one very common question they have is: “are poker tournaments played with real money?”
It’s not hard to understand where the confusion comes from as players in big tournaments will often have millions in chips in front of them. So if you are wondering are poker tournaments played with real money the simplest and the most straightforward answer is:
Poker tournaments are not played with real money. When signing up to a tournament, a fixed sum of money is exchanged for chips that can be used to play the game. A player is eliminated from a tournament if they run out of chips and a real-money prize is only awarded if they place within the prize pool.
In poker tournaments, the prize money is created from all the cash paid by the participants and is later distributed to those who perform the best. Tournament chips have no monetary value themselves and are simply used to “keep score”. Once you are out of chips, you’re out of the tournament.
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Poker Tournaments Are played For Real Money But Not With Real Money
The best way to understand how payments work in a poker tournament is by using an example. Let’s say 100 people pay $50 each to play in a tournament. The total prize pool will then be $5,000 (100 x $50) and that’s the total amount of real money the players will be fighting for.
The venue organizing the tournament will decide how this prize pool will be distributed. In a tournament with 100 players, usually those finishing in the top 10 or 20 spots will receive prizes, with those finishing in top spots receiving the biggest share. For example:
- Winner: 10% ($500)
- Runner-up (second place): 6% ($300)
- Third place: 4% ($200)
- Fourth place 2.5% ($125), etc.
So, all the players are playing to win real money, but what’s up with all those massive stacks of chips in front of the players?
Well, the chips are what you play the tournament with i.e. for placing bets/raises and making calls. These chips don’t have any monetary value as such, i.e. you can’t go to a casino cashier and exchange them for money.
In this example, every player could start with a stack of 10,000 chips and by the final table they could grow that stack to 50,000 or 100,000. But no matter how many chips you accumulate in a tournament, the most you can win is the first place prize and only if you win the tournament.
If you decide to get up and leave, you can’t take your chips with you.
Unlike chips in a cash game, which belong to you and you can do with them as you like, tournament chips belong to a casino and are given to you for the duration of the event. If you decide to leave, you’re free to do so, but chips will remain at the table and your stack will get blinded out.
How Much Money Can I Win in a Tournament?
The amount of real money you can win in a tournament is directly connected to the buy-in, i.e. the amount you pay for your seat, and the number of players in an event. The reason why WSOP Main Event winners get multi-million scores is the high buy-in of $10,000 and the fact these tournaments are usually played by thousands of players.
Once again, don’t get confused by the number of chips you receive at the start of a tournament. In theory, even a $10 tournament could start players with 1,000,000 in chips and make it look like the players have huge stacks.
However, when all is said and done and you have all 200,000,000 chips in front of you (from all 200 participants), you can still expect to win something around $200 to $300 in real money.
This is what makes tournaments so appealing in the first place as you often get to play for hours (due to a lot of chips) without risking too much or risking a fixed amount. If you’re a good player or get very lucky (or the combination of both) you can win 10, 20, or even 100 times your buy-in, which is really hard or even impossible to do in cash games.
The Main Differences between Cash Games and Tournaments
Although the same rules of poker apply whether you play in a cash game or a tournament, there are some very important differences between these two formats.
The first and the most important one has already been explained: tournament chips can never be cashed out. So you are going to have to play with your chip stack until you have either lost it all or won the tournament.
Cash games, as the name would suggest, are played with actual money. Most of the time, you are provided with chips which can be directly exchanged for cash however in some special circumstances you are allowed to play with actual wads of cash as was commonly practised on Poker After Dark.
Stemming from the previous point is another significant distinction that will define your strategy in tournaments. In cash games, you want to fight for every pot because every pot is worth exactly the amount of money that it contains.
In poker tournaments, individual pots aren’t as important and the “value” of the chips can change significantly over the course of the competition.
Tournaments are much more about surviving and picking your spots. Your first goal is to “make the money”, i.e. outlast other players and reach the first paying position. Sometimes you’ll be better off folding a really strong hand and waiting it out.
Winning pots in a tournament is important, of course, but not losing them is much more important.
If you lose all of your chips in a tournament, you’re out and you can no longer compete for the prizes. Unlike cash games, where you can simply top up and keep playing, once you bust from the tournament, you’re done.
When Do You Get Paid In A Tournament?
Another common question that comes together with the original one, i.e. “are poker tournaments played with real money” is the one about the bubble and when you actually get paid in a tournament. You’ve probably heard the term many times but it doesn’t really sound like it has much to do with poker, right?
In the poker slang, though, the term “bubble” is used for the player who busts out just before the money.
For example, there are 20 places paid in an event and you finish in the 21st spot. Congratulations, you’ve just earned the unflattering title of the bubble boy or girl.
This is one of the worst feelings for any tournament player out there and you really want to avoid going out near the bubble if at all possible. That’s why you’ll frequently see players in major events nursing a very short stack and refusing to go all in.
They’re waiting for the bubble to burst, i.e. for another player or two to get eliminated to ensure they get paid.
In these scenarios, having even a few blinds can be of great importance.
Let's imagine you are on the bubble in the WSOP main event which typically has a $15,000 minimum payout for those who make the money (with a buy-in of $10,000).
If you have only a single chip, that chip will be worth nothing if you get knocked out on the bubble, but it will be worth at least $15,000 if you make it to the money.
In the first instance, you go home with nothing. In the second instance, you’ll usually receive the money you paid for the tournament back and a very tidy profit.
For more information on playing around the bubble including how to use it to your advantage, read this article over at Splitsuit.com.
Do Tournaments Always Pay Out Real Money?
In general, tournaments are played for real money, especially in live casinos and poker rooms. However, not all tournaments payout real money – sometimes other prizes are there to be won.
Some events will reward top players with entries to a different (more expensive) tournament instead of paying them money. These are what’s known as satellites and are frequently used by players with smaller bankrolls to get into bigger events without risking as much money.
On the other hand, in the online arena (where dealers don't have to be paid), you’ll sometimes find tournaments that are completely free to enter but pay out real money or tournament entries. These are known as freerolls and represent a great way to learn the game and even start your poker bankroll with zero risk involved.
To see the best online poker sites to play freerolls online, check out my post here: https://howtoplaypokerinfo.com/best-online-poker-sites/
Why is there money missing from the tournament prize pool?
In most cases, the organizer will charge the tournament fee (or the rake) from the players. If a tournament has a buy-in of $55, for example, $5 will be kept by the house while the remaining $50 will go into the prize pool.
Is there a way I can cash out my tournament chips?
No there isn’t. Tournament chips have no monetary value of their own and you can’t exchange them for real money under any circumstances.
Who gets money in a poker tournament?
Players finishing in top spots of the tournament receive cash prizes. The exact number of players getting paid and the payout structure differs from one tournament to another.