What is Poker ROI
One of the most important stats I feel that a poker player should track is their poker ROI, or poker return on investment. This is a stat that is used for sit n go or tournament players to determine how much money they have earned in profit in relation to how much they have spent to play. In my opinion, ROI is one of the most important stats to keep track of simply because it acts as a leak finder; if your ROI is really low or in the negatives, then you know there is something blatantly wrong with your game and should do some investigative work. On the other hand, if your ROI is rather high then you can possibly look to add tables if you are a multi-tabler or move up in stakes.
But before you can look at your ROI, you first must know how to calculate it. Sure, there are HUDs out there that provide these numbers for you, but I feel that it is good practice to keep your own stats in addition to the stats that a HUD like Poker Tracker or Hold'em Manager give you. That way you can compare numbers to make sure all your records are accurate. And besides, calculating ROI isn't that difficult to do and only takes a few minutes of your time.
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How to Calculate Poker ROI
Calculating your Poker ROI is very simple to do using the following formula:
(Money Won - Buy In) / Buy In x 100 = ROI %
It is important to also remember to add in the rake or fee that room makes you pay when signing up; if it is money out of your account, it needs to be included.
So for example, let's say that you played in a 9 man, $10+$1 sit n go that had a standard 50/30/20 payout structure; first place would be $45, second place would be $27 and third would be $18. If you won second place for $27, what would your ROI be? Let's plug in the numbers and find out.
($27 - $11) / $11 x 100 = 145.5%
An ROI of 145% means that you have made a return of almost 1.5 times your initial buy in which is excellent.
Although this is a great return on your investment, there is a catch to this. This percentage is based off only one game which really isn't enough data to provide a reliable figure. The reason being is that any player can win one game, but can they provide the same results over a larger sample size, say, over 100 games?
For another example, let's assume that you won 25 games out of 100 with you winning first place 10 times, second place 12 times and third place 3 times. What is your ROI then?
($45 x 10) + ($27 x 12) + ($18 x 3) = $828Won
$11 x 100 = $1100 spent in buy ins
($828 - 1,100) / 1,100 x 100 = -20% ROI
As you can see here, cashing in 25 games was simply not enough to win over a 100 game sample size, let alone break even. We actually have lost about 1/5 of our investment that we made playing and now we need to take a step back and re-evaluate our game prior to playing again.
But this example should prove the importance of ROI over a large sample size. As I mentioned earlier, anyone can go on a hot streak and win 10 games but the larger the sample size, the more accurate the figures will be.
So now that we have covered what ROI is and how to calculate it, another question remains; what should my ROI be?
That answer is difficult to answer because there are so many different variables to include. The common consensus is that as high as 20+% is reachable at the micro stakes while as low as 5% is common at the higher stakes. To be quite honest, I feel that your ROI will have a lot to do with what personal goals you have and what you want to achieve.
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Cash Game ROI
As we mentioned above, the ROI formula is used only for sit n go's and tournaments. So, what about cash games; how do you determine how much you are winning there?
The most common way nowadays is using the BB/100 method which is commonly found on HUDs. This tells you how many big blinds you have won times two on for an average of 100 hands. So for example, if you played 100 hands at $.50/$1 no limit hold'em and won $20, then your BB/100 would be 10BB/100 ($20 / ($1bbx2)).
A method I have used without using a HUD is just figuring out your profit per hour similar to a job. For example, if you brought $50 to the table and at the end of an hour you had $100, you would take the $100 and subtract your $50 buy in for a profit of $50. You would then divide the amount of profit by how much time you spent at the table, so in our case 1 hour for a total of $50/hour. If you had the same amount after 3 hours, you would divide $50 by 3 for a total of about $16.60 per hour.
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Calculating Poker ROI - What is Poker ROI
So, hopefully it is plain to see what ROI is, why you should understand it and most importantly, how to calculate it. Knowing your poker return on investment should enable you to find and plug any leaks you have much faster thus allowing you to play better poker and as a result, increase your poker ROI.
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