Poker is inherently a betting game. In order to make bets, you need money or something that represents money (usually poker chips).
If you are playing tournaments, chips usually have a value that is not directly tied to a cash value. `If you only have a “cash” set of chips, you could have a $50 or $100 tournament where you issued each player cash chips equal to the buy-in if you wanted to. It is just not the norm. My guess is that when tournaments were first played, casinos wanted to make sure tournament chips were not confused with actual cash-money value chips. They also wanted players to feel they were starting with larger stacks. The reality of the second point is that the blinds were also larger so that was all relative. Tournaments also have an upfront “rake” where the house takes a cut of the entry fee to cover the costs of dealers, floor people, and other overhead and management costs. In a cash game the rakes comes out of each pot, based on the size of the pot. In a tournament that is deemed “unfair”, so the rake comes out up front. By using chips that do not equal actual cash values, it is easier to “hide” the rake.
You can get inexpensive plastic chips at game stores, poker supply websites, garage sales, or Amazon. Many people start with these chips and then upgrade to clay or ceramic chips after playing for a while. If you order from an online poker supply house, many times you can customize the quantity and value of the chips in your set. Chips are usually sold in packs of 25.
Common colors for chip values are white = $1.00, red = $5.00, light blue = $10.00 (if you use them), green = $25.00, black = $100.00, Purple = $500.00, yellow = $1,000, pink = $5,000, orange = $10,000, and brown = $25.000. If you are going to host both cash games and tournaments, you should have two different styles of chips. One will be your cash chips and the other will be your tournament chips. Your other choice is to limit your cash play to green, $25.00, chips and start your tournament chips at black, $100.00 chips.
How many do you need? That depends on how many players and what kind of stakes you are playing. When playing tournaments everyone starts with the same number of chips. Tournaments come in many flavors. “Deep Stack” tournaments start with a higher value of chips than a “regular” or “turbo” tournament. The total number of players, the number of “day ones”, the number & value of each starting stack, and if rebuys or add-ons are available all affect the structure and duration of a tournament.
When I host a tournament, it is usually a “semi-turbo” with a 20,000 starting stack, 15 minute blinds, and blind levels that begin slow but then really accelerate beginning in level 9. We usually have anywhere from 25 to 40 players and it is a “freezeout” (no rebuys or add-ons available) format. I do this because we want to start a cash game as soon as 4 or more players are knocked out. I offer a 10% chip bonus for people that are ready to play on time and the last entry is before the end of round 2. The tournament usually ends in 4 hours or less.
I like to set up initial stacks with the following chips. Each stack will fit in a standard 20-chip tray. Doing it this way ensures you start with enough of an assortment so making change in a pot is easy. Each “on time” starting stack is 22,000. If a player buys in after the start of the game, they receive 20,000 in chips.
You can easily run a 20 person tournament with a 600 piece chip set, if you have the correct mix of denominations. Many pre-packaged chipsets do not have the correct mix as they include chips between $1 and $25 or $50, and mostly the small chips. You will generally need to order a custom set of chips to run a tournament. If you ever get to the point where you are running multiple tournaments at the same time, you will need multiple chip sets, each with a different design. Here is a recommended set to get you started. This will allow you to pull the 100 and 500 value chips when they are no longer needed.
For 40 players, and/or if you are allowing add-ons or rebuys you will need double or triple the chips. I like to have all initial buy-in stacks to have the same configuration. Add-ons and rebuys can easily be 4 chips at 5000 each, 2 chips at 10000 each, or a combination. The initial buy-ins will provide enough change at the table.
For my recommendations on chip sets for cash games, see the “Cash Chips” post.