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How to Determine Payouts in a Tournament

Tournament payouts should be top-heavy and tiered.
steel trophy image by Paul Moore from Fotolia.com

Tournaments are a lot of fun, but the payout system is sometimes difficult to organize. Tournament payouts are commonly part of a tiered system where the winner always receives the largest payout. However, there are many ways to distribute payouts among second, third and fourth-place participants. For example, a tournament organizer may choose to award the top three winners with a lump sum. An organizer could also award payout to the winner of each tournament round. Fortunately, there are some ways to make payout organization a little bit easier.

Decide which tournament winners will receive payout. Will the top five winners be rewarded? Will the entire payout simply go to the overall winner? Will you provide a prize to the winner of each round?

Count the total amount of prize money that you plan on distributing. If your tournament payout is based on the number of enrollment fees you receive, count the amount of prize money upon the completion of the tournament enrollment period.

Decide whether tournament winners will receive a lump sum or a percentage of the overall payout.

Choose a tiered, top-heavy payout if you plan to reward your players with a lump sum. For example, if the total payout is $1,500, pay the first place winner $750, the second place winner $500 and the third place winner $250.

Calculate the payout percentage for each winner if you choose to award a percentage of the total prize money. Again, if your total payout is $1,500, and you award your first place winner 55 percent, your second place winner 30 percent, and your third place winner 15 percent, the payout would be $825, $450, and $225, respectively.

Inform your tournament participants of the payout rules as soon as reasonably possible.

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