Last month I talked about the potential advantages of Flipouts, Full Tilt’s new tourney format. There are some bankroll management issues around them worth considering. If your bankroll dictates it prudent to stick to $30 or less buy-ins, don’t kid yourself into thinking you can enter a $26 Flipout. A $26 Flipout is a lot different from a normal $26 MTT.
If you intend to enter lots (and you should to reduce variance), then what you are doing long term is paying $234 to enter a sit-and-go where the whole field is paid. This is not quite the same as a $234 27-man, but it’s close. Given that you are immediately guaranteed the min cash of $48, it’s basically a sit-and-go where two thirds of the field are paid. All bankroll management calculations need to
be performed on this basis.
SNG to MTT
If players were asked to pay money to enter a tournament that pays all places (without the flipping to get there) most would quickly recognise the redundancy of the min cash. Why not just subtract it from the buy-in? The Flipout format disguises this point but does not negate it. Paying a reg fee on this portion of the buy-in would be ludicrous, something Full Tilt thankfully appears to recognise. They have basically set the reg fee at sit-and-go levels minus the min-cash portion. It’s the fact that recreational players won’t recognise the true nature of Flipouts (and even many regulars may not for a while) that makes them potentially very profitable for those who see them for what they are and know how to adjust.
My generation of online players cut our teeth and built our bankrolls in sit-and-gos. They were an ideal low-variance way to do it. Eventually though, in the face of countless videos, books and strategy discussions all our edges shrunk, and there was a mass exodus to MTTs a few years ago. While there are still grinders who make a living from sit-and-gos, they have to be insanely good to do so (no mistakes tolerated), be willing to play very high volume, and have good rakeback. The sites have allowed these formats to survive by adjusting the rake and rakeback to a level that could be described as ‘just enough to get by’. Some foolish sites never did and saw their sit-and-gos die.
This shift to MTTs has had a number of knock-on effects. Whereas pretty much all of my generation of online players came up through the sit-and-go ranks before moving into MTTs, very few of the following generations went this route. Most jumped straight into MTTs. However, the higher variance makes it much harder to grind up a roll. While it’s still possible to grind your way up from $1 games it’s clearly not the most efficient way to move up the levels. One side effect has been the rise of staking. The most likely route for many young players is to play enough low-stakes games to prove themselves as winning players, then find a backer willing to gamble on them beating higher stakes.
Flippin’ out
Capitalism 101 states that it gets harder to make money from anything as time progresses due to increased competition. The pioneers are the ones who will make the easiest money. It’s no coincidence that most of the backers are drawn from the ranks of my generation. We made our money when the going was soft, and the wise ones reinvested it into staking other winning players. I am sometimes asked why I bother staking players when I am still a profitable player online. There are a number of reasons (not all financial) but the main advantage – besides potential profit – is reducing variance. If I play a big live tournament and keep all my own action, I’m maximising variance. If I sell some pieces or swap with other winning players I’m reducing my variance. Staking other online players similarly means putting my eggs in different baskets. My fortunes are now no longer exclusively tied to my own swings.
Flipouts may be very profitable for a while, but will inevitably become less so over time. Long term edges for the best players will probably bottom out around 15 to 20% – about the same as hyper MTTs.
Kudos to Full Tilt for coming up with the most talked about format in a while. Anything that encourages recreational players is good for the industry. In the short term they could be very profitable for those ahead of the curve who play them optimally. It remains to be seen whether they will go the way of Double or Nothings or hyper sit-and-gos, shark infested waters where regs grind out small edges over huge volume thanks to low rake and high rakeback. Enjoy them while they last!
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