When the small blind or big blind are eliminated from a poker tournament, the blinds must be re-positioned to account for the eliminated player. The rules pertaining to this event are referred to as the Dead Button rule or the Moving Button rule. You must decide which one of these two rules you will use before you begin your tournament. Most tournaments use the Dead Button rule. Be warned that using the Moving Button rule can create some unusual scenarios ... so be well prepared.
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(THIS rule is used for our Poker Tourneys)
The big blind is posted by the player due for it, and the small blind and button are positioned accordingly, even if this means the small blind or the button is placed in front of an empty seat, giving the same player the privilege of last action on consecutive hands. Robert's Rules of Poker - Section 4.2b

If the small blind is eliminated and
is not replaced by a player from another table, the button moves to the now
empty seat (the seat vacated by the eliminated small blind). The player who was
the big blind now posts the small blind and the player to his left posts the big
blind. Since the button is now located at an empty seat, the player who was
the button will, in effect, be the button once again.

If the big blind is eliminated and is
not replaced by a player from another table, the button moves to the player who
was the small blind and the player to the left of the eliminated big blind posts
the big blind. There is no small blind for that hand. On the following hand, the
button moves to the now empty seat (the seat vacated by the eliminated big blind
player) and the two players to the left post the normal blinds. Since the button
is now located at an empty seat, the player who was the original
small blind will, in effect, be the button once again.

If both blinds are eliminated and not
replaced by players from another table, the same player will be the button three
hands in a row. The button moves to the empty seat (the seat vacated by the
eliminated small blind player) and the player to the left of the eliminated big
blind posts the big blind. There is no small blind for that hand. On the
following hand, the button moves to the next empty seat (the seat vacated by the
eliminated big blind player) and the two players to the left post the normal
blinds. The button and blinds are placed normally for the following hand.
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The button always moves forward to the next player and the blinds adjust accordingly. There may be more than one big blind. Robert's Rules of Poker - Section 4.2a (NOT used for our Texas Hold Em Tourneys)
Do not use the Moving Button rule unless you know what you are doing. I won't even explain it other than to provide these two examples. To understand the Moving Button rule, keep in mind that the button must move forward and players must post their normal blinds as if no player had busted out. The reason for having multiple big blinds is to keep the big blind followed by small blind pattern.


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When there are only two players remaining in your poker tournament - the small blind is the button and acts first before the flop and last after the flop. The player who does not have the button is dealt the first playing card.
Many players get confused when trying to figure out what happens to the button and blinds when you go down from three players to two players at the end of your tournament. Which one of the two remaining players is the button, and who is the big blind?
The important thing to remember is that no player should have to pay two big blinds in a row, especially towards the end of your tournament when the blinds are extremely large. For this reason, you should forget about who becomes the next button, and instead determine who becomes the next big blind. Once you have determined who the next big blind will be ... the other player is the small blind (and the button!).
Another way to think about it is that the next big blind will be the first non-eliminated player clockwise from the big blind in the previous hand. The other player will be the small blind (and button).

If the dealer is eliminated, the small blind becomes the big blind, and the big blind becomes the small blind and button. Rationale - Player3 just paid the big blind, he should not be the big blind two hands in a row ... so Player2 must be the big blind. Since Player2 is the big blind ... Player3 must be the small blind and button.

If the small blind is eliminated, the dealer becomes the big blind, and the big blind becomes the small blind and button. Rationale - Player3 just paid the big blind, he should not be the big blind two hands in a row ... so Player1 must be the big blind. Since Player 1 is the big blind ... Player3 must be the small blind and button.

If the big blind is eliminated, the dealer becomes the big blind, and the small blind is once again the small blind (and button). Rationale - Player3 just paid the big blind and Player1 would normally have been the next big blind ... so Player1 should be the big blind. Since Player1 is the big blind ... Player2 must be the small blind and button.