The Hidden Cost of Late Reg in PKOs

1) PKO Late Registration by Percentage of Field Remaining

In a regular MTT, the prize pool stays fixed until the bubble bursts. Therefore, as players are eliminated, the stacks gain in value. The exact size of your stack matters much less than simply staying alive in the tournament.

In a PKO (and in SKOs), however, money is removed from the bounty prize pool (BPP) with every elimination from the tournament. And because the bounty prize pool is Chip EV and not influenced by ICM like the regular prize pool, the value of the bounties removed from the bounty prize pool as each player is eliminated has a greater, outsized negative impact on the value of late registration stacks than any positive increase in a late registrant’s stack share of the regular prize pool (RPP). A detailed breakdown of the data can be found in one of the sections below called “The Math of PKO Late Registration.”

2) PKO Late Registration and Payout Structures

The regular prize pools in PKOs tend to look similar to the prize pools of non-bounty MTTs in terms of their distributions, with a few notable exceptions. One key exception that influences the value of a late registration stack in PKOs is that, since 50% of the buy-in goes to the bounty prize pool in most PKOs, the regular (placement) payouts tend to be about half of what they would be if there were just one prize pool instead of two.

For example, the min-cash in a regular MTT is typically around 1.5 to 2x the entry fee. However, in a PKO MTT where 50% of the buy-in goes to the bounty prize pool, only half the buy-in can go to the regular prize pool. Thus, it’s common to see PKO structures where a min-cash from the regular prize pool is only .75 to 1x the entry fee.

A big part of the benefit package of max late registering a regular tournament or satellite is the value of a min-cash, since we start the tournament so much closer to the ITM bubble. A common scenario when we enter late is that we are less likely to be a big stack on the bubble and more likely to be below average. The shorter our stack, the greater the value and importance of min-cashing.

But when a min-cash isn’t even as much as the entry fee to the tournament, min-cashing becomes less valuable, as does late registration. A min-cash in a regular MTT might immediately return a minimum of a 50–100% positive ROI in the event, but in a similar PKO, a min-cash with no bounties won is usually going to return a negative ROI.

When a min-cash isn’t even as much as the entry fee to the tournament, min-cashing becomes less valuable, as does late registration.

The Importance of Covering in PKOs

In PKOs, since typically 50% of the prize pool is paid out in bounties, our potential ROI is significantly limited when we don’t cover other players at our table. In the sample $5 + $5 +$1 PKO tournament from a large online poker site that I discussed in my first late reg article, 52/156 players remained at the close of late registration. Five players registered at the last moment with a 100,000-chip starting stack. Below is the actual stack distribution of the tournament at the close of late registration.

The late registrants began their tournament tied for 41–45th place. They covered each other plus 7 other shorter stacks. They were covered by 40 of the 52 remaining players, or about 77% of the field.

With approximately 6 tables left, assuming the operator distributes the late registrants evenly across the remaining tables (the best practice), the most likely table scenario for the late registrants is that they will be the shortest or second shortest stack at their table and rarely (if ever) will they be above the bottom 3 in chips.

It’s not possible to win part of the bounty prize pool if we don’t cover the other players in the pots we play. In this situation, we are far more likely to wind up in pots with players who cover us and who will be incentivized to go after our bounty, which will offer them around a 10–12% equity drop to play versus us at this stage. Conversely, optimal short/covered stack strategy at this stage will usually be to enter pots even less often than in regular MTTs at this stage because of the decreased fold equity they have against covering opponents. This also complicates the search for spots to play pots against the few (if any) stacks the late registrants cover.

Even if we double up the first hand after we enter the tournament, in this PKO MTT, we would still have been covered by 33–34 players, or around 65% of the field. This will continue to make it difficult to win bounties. This downside goes on top of the fact that at least 40% or more of the bounty prize pool will already have been drained by other players who won bounties.

The Math of PKO Late Registration

Most of the time, late registering a PKO will come with an insurmountable ROI disadvantage. While there is still some possibility that a player could register late and then quickly double several times to have a good chance of a positive outcome, that is an unlikely scenario to occur all of the time if a player is frequently entering or re-entering PKO tournaments deep into the late registration period.

The table below demonstrates the negative impact on the value of a late registration stack in a typical PKO where 50% of the buy-in goes to the bounty prize pool (BPP):

On sites where late registration ends with approximately 30–35% of the field remaining, the bounty prize pool will have decreased by 40–45% on average, and a starting stack value will have decreased by approximately -14%. Note that the approximately -14% value of a starting stack in the $5 + $5 + $1 real-world PKO example discussed above and in the previous article, where 33.3% of the field remained at the close of late registration, is roughly the same as what this model predicts.

Conclusion

In regular tournaments, the ICM increase in the value of stacks as the tournament progresses helps to offset the disadvantages of entering a tournament late  (learn more here). However, since only half the prize pool in a standard PKO is impacted by ICM, the risks/rewards of chip accumulation differ significantly.

In PKOs, the chips we win at the early stages of a tournament are more valuable than in regular tournaments because ICM risk premiums are lower overall, and winning bounties at the early stages of the tournament is crucial to profitability and our overall ROI in the tournament. This heavily incentivizes registering PKOs at or before the start of the tournament.