Making a deal in poker tournaments is a way for remaining parties to reduce risk. The most common way to calculate variance is known as ICM (independent chip models). By taking note of stack sizes in proportion to payouts, competitors are able to calculate their tournament chip stacks in terms of the underlying currency.

The math behind this can get pretty tricky, which is why there are plenty of ICM calculators  in the market. If you’d like to learn more and see an example of how ICM is calculated, check out this guide.

There’s a key difference when using ICM in tournaments vs. cash games. In cash games, players make decisions strictly on their expectations. For example, in cash games, anytime a player’s equity is greater than his pot odds or breakeven point, he should continue playing the hand.

Such is not the case in tournament poker, especially deep in the money or at final tables where ICM is at play. It’s not enough to merely have a positive chip expectation play, it needs to be positive in terms of ICM expectation (EV). This key distinction is what makes tournament poker strategy so complex and unique.

Playing tournament poker with ICM implications in mind is key to maximizing earnings: To learn more about ICM play, check out the Conscious Poker Membership.

It’s important to note that making a deal based on ICM isn’t mandatory—it’s simply a logical way to calculate chip value.

Are you willing to put it all on the line and gamble?

Do you feel like you’re a stronger player than the rest of the table?

Then ICM may not be the way to go. Of course, it’s in your best interest to maximize profit while minimizing loss.

Use of ICM depends on multiple factors:

• Prize pool (Is this a life-changing amount of money to you?)
• Bankroll (Can you afford the variance?)
• How significant is your edge? (Hint: it’s likely smaller than you’d think, especially in fast structures or when the average stack is 30bb or less).

On the one hand, if  money is a priority, variance is high and EV is low, you should lean toward making a deal.

For instance, when I made back-to-back Final Tables at the Bellagio, first place was roughly $100,000. At the time, I was regularly playing a minimum of $50/$100 NL, so I could afford the variance. I also felt like I had a significant edge in the field, because I was so accustomed to playing short-handed poker from the millions of hands I played online.

I decided against making a deal and opted to play it out. I’m glad I did. I won both events.

On the other hand, if the remaining prize pool is relatively small compared to your bankroll and you feel like you have a significant edge, consider playing the tournament out.

With four people left in the World Poker Tour, first place was over $1,000,000; whereas, fourth place paid roughly $250,000. The variance was insanely high and anything could happen. While making a deal wasn’t an option given the circumstances, I wished it were because I could have locked up over a half-million-dollar payday and ‘gambled’ for an amount that was less significant, as well as the title.

It was unfortunate because I lost a massive flip for the chip lead to the eventual winner and wound up busting in fourth.

Variance in poker is real; it’s more significant than most people think. While it may be intriguing to chase your EV, it might not be the best decision.

Before deciding whether or not to make a deal in tournament poker, ask yourself:
Are you being staked? What does she/he prefer?
Can I lock up a significant amount of money relative to my bankroll or life situation? A good way to think practically about this is to envision what you would do with the money if you won, assuming you made a deal. Then compare that with not making a deal and getting last place. If this gap is significant, chances are you can’t afford the variance and should make a deal.

Typically, I recommend, at the very least, hearing out what the other players are proposing. What do you have to lose?

The worst that can happen is you don’t reach an agreement and decide to play it out, but it’s good to at least know your options.

As you move up in the stakes, it’s likely the caliber of your competitors will improve.

At the highest levels of poker, one’s edge is greatly reduced, especially when stakes are short, as is often the case in late stages of tournament poker.

Poker players tend to overestimate their edge and underestimate variance, so keep this in mind when debating whether or not to make a deal at a tournament final table.

Of course, if a single participant declines the terms, then no deal can take place.

This can give you leverage when negotiating a deal. Remember, there’s no law that says a deal must be based on ICM; but rather, a deal is formed when all parties agree. If you sense that the money is significant to some players and that they’re eager to make a deal, use that edge to your advantage by bargaining for a larger share of the prize pool.

As is almost always the case in negotiating, whoever cares the least, wins.

Now that you understand what goes into making a deal, it’s time to finish the tournament. Typically, even when a deal is made, a small portion of the prize pool is left for the winner. Sometimes this is in the form of an entry to another tournament; whereas, in other situations, it’s a percentage of the prize pool.

I’m a fan of a structure that keeps players’ incentives as high as possible, since it makes the remainder of the tournament more enjoyable: Let’s face it; poker’s more exciting when there’s something to play for.

While deals can be difficult to orchestrate, as all parties will need to agree, a good starting point is to leave 20% of the prize pool in play and make a deal for the remaining 80%.

ICM serves as an excellent guideline for the value of your stack in tournament play, but it’s not the only factor to consider when deciding whether or not to make a deal in tournament poker.

In some cases, you may wish to make a deal when the money is significant, the variance is high and your edge is small. In other cases, when you feel you have a big edge and can afford the risk, you may wish to play it out.

Every tournament is unique. Use good judgment and situational awareness to optimize your expected value.

Do you think deals should be allowed in tournaments?

Have you ever made a deal?

Let us know in the comments!

Alec