We often talk about prizes won on the poker circuit as being a "life-changing sum of money". Indeed, a lot of first prizes in EPT/WPT/WSOP events would easily afford you a nice house, a nice car and enough change left over so you could avoid working again for a very long time.
But why is it then that every week we are inundated with stories of players who have won small fortunes at the tables being declared broke, bankrupt, having bad debt, or even doing scummy things in the name of money? Why is poker so rife with riches to rags stories?
I caught up with Mental Game expert and PokerStrategy.com coach Jared Tendler to get some perspective on why this happens so much. Jared is also a licensed mental health counsellor as well as working with poker players on their mental game, so he has some unique insight into this:
"In the US, there is some anecdotal evidence that most lottery winners end up broke, or back to their original net worth, within five years. I am not sure what the actual figures are, because there have never been any formal studies done, but the fact that this happens at all says something."
"One of the reasons people who have sudden big scores go on to lose it is money management. They spend lavishly, give it away, invest badly and don't plan for the future. People who make millions gradually from their own ability also acquire the ability to manage that money along the way. It's a skill, and unless you know it is a skill when you instantly ship a seven-figure score, you will lose a lot of money before you realise how important it is."
Tendler here is talking in terms of lottery winners, but the same can apply to poker players. A lot of big winners have very early success, and although there is usually talent involved, the talent doesn't always reflect the ability and experience associated with the level of achievement. In that regard, early tournament success can be viewed as similar to a lottery win. More skillful but still not in line with the person’s actual ability.
"Overconfidence is the other issue," Jared continues. "Human beings are poor predictors of the future; when they are living on easy street, there is a hidden assumption that is how life is going to be from here on out. Obviously, this goes hand in hand with poor money management."
But it is not just players who have had big wins early that are vulnerable to going broke, players who have been around the circuit a long time are just as likely to throw it all away:
"Good poker players can develop a feeling of invincibility, as though they are destined to dominate. They think they've earned their rightful place, and it's theirs. As if success is a possession that can't be taken away."
"Game selection and bankroll management suddenly don't matter, because they feel as though the can beat anyone - regardless of how little they might make in those games over the long-term. They lose sense of all the work that was put in that got them there, and the dynamic nature of the game. Poker is now an ATM and all they need to do is show up and collect their money."
The point Jared makes about the dynamic nature of the game is key here. Poker is an infinitely tougher game today than it was two years ago, and two years ago it was an infinitely tougher game than it was two years before that. Having interviewed hundreds of the biggest names in poker, the one thing that I have noticed among the players who tend to have continued success, compared to those who spiral into meltdown, is that they maintain an enthusiasm for learning about the game and talking about hands all the time.
But there is of course another big reason why successful poker players end up in the poor house, and that is other gambling vices like sports betting and house games. It is sadly an inevitable part of the game when you consider how much time poker players are forced to spend in casino environments. Jared provides a further context for this:
"With games like craps, I am sure part of it is a combination of loving the action and assuming that their gambling bankroll can be replenished by poker. Just like bad game selection and poor bankroll management, these habits show a loss of long-term perspective and an overconfidence in their own poker skill. Their ability to distinguish skill from variance is so skewed that they don't think bad variance can happen to them."
Of course in some instances we have to remember that a cavalier attitude towards bankroll management and variance is often what got some of the top players where they are today. Many of the best players in poker climbed the ranks by taking shots outside of their bankroll, so it does seem inevitable that they are unable to put on the brakes when they get to the top.
Likewise, many of these players have borrowed or been staked on their way to the top, so not only were they probably not as financially successful as their Hendon Mob ranking would suggest in the first place, they also perhaps have less fear of going broke than most of us, because they know they can get credit from somewhere if they did.
I'll leave the final word for Jared Tendler, to share with us how we should handle success, and how to adapt when we are at risk of going broke:
“After you’ve worked your ass off to get to the top, or to get to a higher limit, take some time to enjoy the victory and then get back to work. You must keep learning and improving because everyone else is, and you now have a target on your back that they are aiming for.”
“If you’re at risk of going broke, don’t fight the reality of what got you in this position. If you deny how you got there, you’ll make it much worse, just like moving too much in quicksand makes you sink faster. You cannot undo how you got in this position; you can only take steps forward to rebuild. Do it methodically, focused fully on the task, and as if your poker life depends on it.”
Barry Carter is the editor of PokerStrategy.com, the world’s largest poker community.