What Is ICM in Poker?
ICM answers a single question: what is my stack worth in money right now? In a tournament those are not the same thing. Twice the chips get you more money, but not twice as much — and almost everything that separates tournament poker from cash games follows from that one sentence.
The number
Instead of a formula, a real payout table from our library — a tournament with a $670 buy-in, 360 entries and $240,000 in the pool. The top 36 get paid:
| Place | Prize | Share of pool |
|---|---|---|
| 1 | 44.100 $ | 18,4 % |
| 2 | 30.000 $ | 12,5 % |
| 3 | 22.000 $ | 9,2 % |
| 36 (min-cash) | 2.100 $ | 0,9 % |
All 30 tournaments in our library have a table like this. They differ in detail, but they all have the same shape.
Why a strategy follows from it
Look at place 1 and place 2. Whoever ends up with all the chips gets $44,100. Whoever loses at the end gets $30,000 — 68 % of that, holding zero chips. Your opponent’s last chips are worth almost nothing; your first ones were worth almost everything.
That is also why place 1 is only 18.4 % of the pool and not half of it. The pool spreads downwards, and every place you do not lose is cash in hand — even when you never win the thing.
And it is why the jump from $2,100 to $44,100 — 21 times — is not an argument for taking every risk. It is the reason you play tighter on the bubble: $2,100 is on the line there, and one lost all-in means you never see it.
The one sentence to keep
In a cash game every chip you win pays the same. In a tournament it does not. A call that wins chips can still cost money — because it risks a place, and a place is money. That is exactly what ICM computes, and exactly why a good tournament player folds hands that would be a clear call in a cash game.
Where this answer stops
ICM is a model, not a law of nature. It assumes everyone plays equally well and that only stack sizes matter — skill, seat and blind structure do not appear in it. In practice it is still by far the best approximation available, and every spot of ours is solved with it.
Before the money — while nobody is winning anything yet — the effect is small. At a final table it is large.
Read on, then play it
The course asks the same thing as a question: “You double your stack in a tournament — does your expected prize money double too?” The answer there is “more, but less than double”. This article shows how much less, in real money.