Lee Jones' Journal: "Let's Make a Deal"
About a year ago, PokerStars instituted a policy at its live events that all final table deals must be made at the table. Of course, if you're not sure what a final table deal is or why one cares where it's made, then that first sentence was probably of little use to you.
Perhaps I can help.
What is a final table deal?
First, let's discuss the basics of a final table deal. When a poker tournament kicks off, the tournament sponsors establish a prize structure based on where each player finishes. Let's suppose that the final four pay-outs are the following:
Such a steep pay-out curve is actually quite common in most tournaments. That is, the difference in each step up the ladder increases dramatically in the final few steps. Thus the attractiveness of a deal.
Consider the four players left in our tournament: Alice, Bill, Charlie, and Dave. They each bought in for $5,000 and spent four gruelling days getting down to this point. Of course, each is guaranteed a payday of at least $100,000 - so it will be a good day for all of them. But the difference between $100,000 and $1,000,000 is, let's be honest, life-changing money. Furthermore, all four are aware of the brutal randomness that could cause the chip leader to be out of the tournament in a couple of hands; they've been experiencing it - though always on the winning side - for the last few days.
So rather than leave all that money to the whims of a few correct cards turning, they decide to reduce their variance. They will take some amount of money off of the table and leave some to gamble for.
For instance, Bill might look around the table and say "Hey folks - we are all about equal in chips here. How about we each take $400K, leave $100K for second place, and $300K for first?" Note that the total amount of money ($2 million) is still the same, but Bill is proposing a redistribution that will reduce the ultimate winner's share to guarantee more money to all four.
This is the fundamental nature of a final table deal.
Now, the chips are rarely evenly distributed and so more sophisticated methods are necessary to find a "fair" deal. Two common deal-making algorithms are the "chip chop" and Independent Chip Model (better known as "ICM"). Each algorithm takes in the number of players left, the number of chips each has, and the prize for finishing in each remaining place. The algorithm then produces a "fair" (by its standards) distribution of how the money should be allocated.
Of course, each player remaining in the tournament gets his or her say. Sometimes no deal satisfactory to all can be reached; they go back to playing poker until the dynamic shifts (stacks sizes change, people bust out, players become more exhausted, etc).
Note that many tournaments (including PokerStars-sponsored ones) require the players to leave a meaningful amount of money for first place. That's because if all the money is distributed in the deal, the poker playing instantly becomes awful. I know because in the early days on PokerStars, we didn't require the players to leave anything to "race" for; the results were predictably bad.
Transparency in deal-making
For a long time, poker sites (including PokerStars) felt that deals should not be public. Many people who were new to poker didn't understand what was going on and we feared that they would be confused or even put off by the idea that the players were somehow short-circuiting the tournament. So deals (when they were done) were taken off into a quiet corner, a restroom, whatever. Sometimes you'd hear announcers coyly refer to "an extra-long cigarette break" or some such euphemism when it was clearly apparent to all concerned that a deal was being discussed.
However, we've since come to the (correct, in my opinion) conclusion that transparency serves everybody best. If somebody in the audience wonders why the players are talking about money rather than playing poker, he or she can easily enough ask and find out. It can actually be an intriguing part of the whole experience.
Thus the new rule at PokerStars live events: you can make deals, but you have make them where everybody is involved and the process is transparent to all.
I'll close with a few Q and A's on the subject.
The Final Table Deal FAQ
Q: Is there always a deal at the final table of a tournament?
A: Not at all. Some players, as a matter of policy, refuse to ever deal. And any remaining player has the right to refuse any deal. Sometimes the word "deal" never comes up.
And in fact, in some jurisdictions, the tournament pay-out structure is essentially a legally binding document; the players cannot change it. Of course, in such situations they're forced to simply play it out.
Q: Can a "final table" deal involve more than one table?
A: In theory, it can. Whenever I've seen it done in practice, it was a disaster. PokerStars doesn't permit it.
Q: Do the players vote on doing the deal or does it have to be unanimous?
A: The decision to settle on a particular deal must be unanimous. There are occasionally situations in which the majority will gang up on one or two holdouts, but good tournament staff will prevent that.
Q: Does the tournament clock stop during the deal discussion?
A: This is up to the tournament director. He may choose to stop it for a bit but if he feels that the players aren't converging on a decision, he'll tell them that the clock is starting again. That pretty quickly causes the deal to be consummated or completely abandoned.
Q: Does the tournament organizer handle the new distribution of prize money?
A: In most cases, they do. Depending on the circumstances, the tournament director will get a more or less formal agreement from all the players indicating that they are agreeing to a new distribution of the prize money1. Once that step is taken, the original prize pay-out document is effectively scrapped and the new player-generated one takes its place.
1 PokerStars requires the players to sign a form agreeing to the deal.
Lee Jones is the head of Home Games at PokerStars and has been involved in the professional poker world for over 25 years. You can read his occasional Twitter-bites at @leehjones.