POKER STAKING - WHAT IS POKER STAKING AND IS IT FOR YOU?

Thursday, 05 May 2016

Poker staking is an arrangement between a person usually referred to as a backer who invests money and a staked player (sometimes referred as a stakee or a "horse") who plays tournaments or cash games with the backers money. The terms of these arrangements can vary greatly but the basic principle is quite simple - a backer gives money to the staked player (or players) in order to share the final profit.

Before we delve deeper into the story about what benefit these arrangements could eventually bring to each side involved, let's see what are the important factors one should know about when considering backing or staking deals.

THE ARRANGEMENT - IMPORTANT FACTORS OF STAKING DEALS

The most important thing to know about these kinds of deals is this - you should always arrange every possible detail of the deal in advance, before the actual staking play begins.

Here are the important factors (contract terms) to take into consideration: the size and the details of the investment (rakeback); possible coaching deals;  detailed exit strategy in case of losing; a profit split at the end and makeup and markup arrangements.

There can also be more backers investing in one staked player or a backer who invests in more than one staked player. In any case, a staked player sets a rate or a ratio of his shares, depending on their estimated value. A player with a good reputation can, for example, decide to sell his shares at a 1.2 : 1 rate (markup) which means he will only pay 40% of the package while receiving 50% of the eventual winnings or, for example, a backer can offer to pay 50% of the buy-in money for a tournament while expecting 50% of the eventual profit. 

Makeup is also one of the most important factors to know and consider. It basically refers to the insurance a backer can expect from a player in case of losing. This part of the deal is designed to minimize the backers risk and it means that if a staked player loses a tournament, he is obliged to return a previously agreed sum to the backer. For example, if a staked player receives a 1000$ buy-in for a tournament and loses, he is obliged to pay that money back to the investor. A staked deal without makeup would be extremely risky for any potential backer. So, be careful to evaluate each detail of the deal beforehand and calculate your EV - each side will surely do the same.

IS POKER STAKING FOR YOU?

If you are interested in poker staking, one of the first questions you should ask yourself is: how do you value yourself as a player? The answer to this question should help you find a way to try and present yourself to potential backers and also to create a detailed proposal of the staked agreement.

The backer on the other hand (expecting high returns on his investment) should always invest his time and effort in carefully picking a staked player. While the initial quality of a picked player is hugely important, the backers are sometimes open for the possibility of coaching their staked player throughout the chosen game thus gaining more involvement in the final outcome. This scenario can also be very beneficial for the staked player as he gets an opportunity to learn and expand his game.

Maintaining a good relationship with your backer can be very beneficial for both parties involved and we advise you to be as honest and transparent as you can be. Poker staking can be a great opportunity for both a backer and a staked player. While the backer can obviously profit from the deal without actually playing a hand, a staked player can benefit in a number of ways. Staking is a good way to introduce yourself to the poker community and gain an opportunity to further prove yourself in some hardly accessible conditions (costly tournaments etc.).