Poker Tournament ROI vs. Cashing Percentage

by Jeremy

One question that a lot of beginning poker tournament players have is whether they should focus on their rate of return (ROI) or their cashing percentage. And the first place that we should begin this discussion is with the definitions of both of these terms:

Rate of Return - This refers to how much money you’re getting back in return based on the buy-in money you’re paying. And the formula for calculating ROI is: (winnings - buy-ins) / buy-ins x 100 = ROI. So if you earned $120 in total poker tournament winnings after spending $110, your formula would be: ($120 - $110) / 110 x 100 = 9.09%.

Cashing Percentage - It’s not hard to explain cashing percentage because this is simply what percentage of times you’re able to cash based on all of the tournaments you’ve played. For instance, if you played in 100 poker tournaments and cashed in 20 of them, your cashing percentage would be 20%.

Get a 100% match deposit bonus up to $1,000 at Americas Cardroom - US players welcome

Now comes the big question of which statistic is more useful for measuring your overall poker performance. As for the majority of the poker community’s opinion, ROI is the only thing that really matters here.

Sure it’s nice to cash in a lot of poker tournaments, but this doesn’t really measure your profitability. For example, let’s say that you play in 100 tourneys with an $11 buy-in, and your cashing percentage is 20%; however, you only average $40 with each cash. Based on these numbers, you would be spending $1,100 in total buy-ins, yet making only $800 back, which is a -27.3% ROI.

On the other hand, assume that your cashing percentage is just 15%, but your average cash in 100 poker tournaments with an $11 buy-in is $90. You’ve made $1,350 total against $1,100 in buy-ins, which comes out to a 22.7% ROI. Although your cashing percentage if 5% lower, you are a far more profitable player based on ROI.

Relating this to poker tournament strategy as a whole, your goal should be to finish high up in a tourney, rather than to simply make the money. That said, don’t play tight-passive towards the bubble just so you can earn a min-cash. Instead, be aggressive in the later stages of poker tournaments, and go for the win!