The only way I've seen this handled (from my extensive B&M cash game experience) is the "Moving Button" method:
(From "Robert's Rules of Poker")
- § 4, ¶ 2: Each round every player must get an opportunity for the button, and meet the total amount of the blind obligations. Either of the following methods of button and blind placement may be designated to do this:
(a) Moving button – The button always moves forward to the next player and the blinds adjust accordingly. There may be more than one big blind .
(b) Dead button – 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.
§ 16: Poker tradition has a lot to do with the fact that both of these methods are in widespread use, but neither method is superior in all situations. The moving button makes sure no player gets the advantage of last action twice on a round (a big advantage at no-limit or pot-limit play). On the other hand, a player may get to post a blind when on the button, which is more advantageous than posting in front of the button. The moving button creates a situation where two big blinds may be posted on a deal, which speeds up the action. At tournament play this speed-up can be undesirable, as when dealing is being done hand-for-hand to balance the pace of play between two remaining tables. A cardroom may either decide for the sake of simplicity to use only one method, or decide to tailor the method to the game and situation.
Now, how to put it into practice? Here's the setup for my example Scenarios:
Hand 1: Player A is SB, Player B is BB, Player C is UTG, Player D is CO, Player E is Dealer.
Scenario A: On Hand 1, SB (Player A) busts-out.
- Hand 2: Move the button past the vacated seat to Player B, who posts his Small Blind "on the button". Player C and Player D both post a Big Blind.
- Hand 3: Move the button to Player C. Player C and Player D both post a Small Blind. Player E posts a Big Blind.
- Hand 4: Move the button to Player D. Blinds are posted as normal.
Scenario B: On Hand 1, BB (Player B) busts-out.
- Hand 2: Move the button as normal to Player A. Player C and player D both post a Big Blind.
- Hand 3: Move the button to Player C. Player C posts a Small Blind "on the button", and Player D posts a Small Blind. Player E posts a Big Blind.
- Hand 4: Move the button to Player D. Blinds are posted as normal.
Scenario C: On Hand 1, UTG (Player C) busts-out.
- Hand 2: Move the button as normal to Player A. Simply ignore the fact that Player C even existed; blinds are posted as normal--Player B posts his Small Blind, Player D posts a Big Blind.
