Definition
Risk of Ruin (RoR) is the probability that you will lose your entire bankroll before reaching a profit goal. Even winning players can go broke if under-bankrolled.
Risk of Ruin = Probability of going broke despite being a winner
Why Winners Can Go Broke
| Factor | Impact |
|---|---|
| Variance | Short-term results deviate from EV |
| Underbankrolled | Not enough cushion for swings |
| Win rate too small | Edge isn't big enough |
| Standard deviation | Some games are more volatile |
Risk of Ruin Factors
| Factor | Higher Risk | Lower Risk |
|---|---|---|
| Bankroll | Smaller | Larger |
| Win rate | Lower | Higher |
| Variance | Higher (MTTs) | Lower (cash) |
| Moving up | Aggressive | Conservative |
Approximate Risk of Ruin
Cash Games (3 BB/100 win rate)
| Buy-Ins | Risk of Ruin |
|---|---|
| 10 | ~40% |
| 20 | ~15% |
| 30 | ~5% |
| 40 | ~2% |
| 50 | <1% |
Tournaments (Higher Variance)
| Buy-Ins | Risk of Ruin |
|---|---|
| 50 | ~15-20% |
| 100 | ~5-8% |
| 200 | <2% |
Note: Actual RoR depends on specific win rate and variance.
The Ruin Formula (Simplified)
For those who like math:
RoR ≈ e^(-2 × WR × BR / Variance)
Where:
- WR = Win rate
- BR = Bankroll in buy-ins
- Variance = Standard deviation squared
Reducing Your Risk of Ruin
| Strategy | How It Helps |
|---|---|
| Larger bankroll | More cushion |
| Lower stakes | Less variance |
| Improve win rate | Study more |
| Move down when losing | Preserve bankroll |
| Avoid high-variance formats | Cash > MTTs for stability |
Practical Guidelines
| Goal | Recommendation |
|---|---|
| Never go broke | 40-50 buy-ins |
| Very low risk (<5%) | 30+ buy-ins |
| Acceptable risk | 20-25 buy-ins |
| Shot-taking | 10-15 buy-ins (temporary) |
Example: Shot-Taking Risk
Current: $500 bankroll, crushing $0.05/$0.10 Shot: $0.10/$0.25 ($25 buy-in)
| Buy-Ins at New Level | Risk |
|---|---|
| 20 buy-ins ($500) | Manageable |
| With only 10 BI | High risk of moving back down |
Plan: Take 2-3 buy-in shots, drop down if they fail.
Key Takeaway
Even winning players can go broke with insufficient bankroll. Risk of ruin decreases exponentially with more buy-ins. Use 30+ buy-ins for low risk, move down before you're forced to, and never play stakes that threaten your entire roll.