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Here's how I handle it. From my written House Rules ver 31d:
106. If a player is eliminated, the blind positions will be determined using the using the dead button method. With two players the SB is always on the button and the other player is the BB.
When the action is at least 4 handed:
1. When the small blind busts
- the UTG becomes the big blind
- the big blind becomes the small blind
- the button stays the button
2. When the big blind busts
- the UTG becomes the big blind
- the small blind becomes the button
- there is no small blind posted
- the button stays in the same spot for the next hand when blinds return to normal structure
When the action is 3 handed:
1. When the button busts
- the big blind becomes the small blind and gets the button
- the small blind becomes the big blind
2. When the small blind busts
- the big blind becomes the small blind and gets the button
- the button becomes the big blind
3. When the big blind busts
- the small blind stays the small blind and gets the button
- the button becomes the big blind
When both blinds bust (Greater than 4 players):
The first hand
- the UTG becomes the big blind
- the button stays the button
- there is no small blind posted
The next hand
- the current UTG becomes the big blind
- the current big blind (who was the UTG when the blinds busted) becomes the small blind
- the button stays the button until the next hand
When both blinds bust when the action is 4 handed:
- the UTG becomes the big blind
- the button stays the button and becomes the small blind
I give every player a copy of the rules electronicly and have hard copies available for anyone to read. Never a complaint.
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