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POKER COACHING, STAKING & AFFILIATION: A Match Made In Heaven

Friday, 16 February 2018

Online poker has come a long way since its early days. Starting off as yet another pastime for players across various stakes, it has grown to be a serious business with many people earning their living playing the game they love.

These days, there are even numerous staking and coaching groups with dozens (and sometimes even hundreds) of players all sharing in on the bankroll of a single (or several) staking backers.

In addition to having the advantage of playing free of financial worries, players in staking groups usually share in on their knowledge, discuss hands together, and have coaching sessions, often led by someone with a superior knowledge of the game. It is both an individual and a collective effort, always aimed at winning as much money as possible. 

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How Does Staking Really Work?

In its core, the structure of the operation is pretty simple and straightforward - stakers provide the financial backing while the coaches and players do everything they can in order to make the most of every play. That way, they all get to improve their game, leading to better overall profits for all parties involved.

In a nutshell, a player involved in a staking deal agrees to play a certain number of tournaments or for a predefined period of time. Once that time has elapsed, their profits (if any) are shared between the backer and the player. The exact split varies depending on a particular agreement. It can be anything from a 50/50 to 80/20 split in favor of either side.

The backer has the responsibility to provide money for his player(s). They are in charge of the bankroll and distribute it as they seem fit and according to the agreement with the player. Players, on the other hand, commit to playing certain games for a certain period of time and do their best to win.

What if I don’t win?

Of course, nobody always wins. The variance factor in poker can’t be avoided, so it happens from time to time that a player ends up down at the end of his or her contract. When this happens, the player is said to owe the backer a makeup.

What Is a Makeup? Is it the same as straight up Debt?

Those new to staking often don’t understand what makeup is all about and how it works. Even some inexperienced backers tend to see makeup as a debt, but this is not the case. If makeup was a simple debt, there would hardly be any upside for a player to play backed as it would simply mean they borrow money and share their winnings if they win or owe money if they lose.

Instead, makeup can only be recouped through more play.

To make things clearer, here’s a simple example.

  • Player A agrees to play 100 tournaments with a $10 buy-in (Total bankroll: $1,000)
  • Player A finishes all the agreed tournaments with $550 in his bankroll
  • The backer is down $450
  • Player A owes $450 in makeup to the backer

In the given example, if the backer wants to recoup the makeup from Player A, they need to stake them again under a new contract. In this case, makeup would be taken out of any future profits first, and the rest would be shared as agreed. So, if Player A wins $1,000 on his or her next run, $450 is taken out of that total and returned to the backer, while the rest of the profit is shared as agreed by the contract.

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How Does Affiliation Connect To All Of This?

Those new to staking or inexperienced with the business side of poker might wonder what affiliation has to do with staking. At a first glance, there isn’t much that connects the two, but it all makes sense once you think about it a bit harder.

In general, when you sign up a player to play under you as an affiliate, you get a certain percentage of their rake at the end of a billing period (usually a month).

Although it is often a bit more complex than this, for the sake of simplicity, let’s say your player generates $1,000 in rake and you’re on a 30% deal – you’ll get $300 for your player.

Now, let’s consider things from a backer’s point of view. You stake a player or a group of players to play a certain number of games. You and they have a profit sharing agreement, so depending on how well they do at the tables, you might lose or make money.

If your players are playing on a site where they don’t have an affiliate or someone else is their affiliate, you can only rely on whatever they manage to win at the tables. As mentioned, variance can be quite brutal, so even if you have really good players playing for you, there will be some bad months and rough periods where your bankroll will take big hits.

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No Loss Scenario

Instead of this, let’s say you’re staking 10 players on a site where you are an affiliate and they all signed up through you. The situation changes quite drastically. If we stick to the above example, let’s say each of your players plays 100 tournaments in a month at $10+$1 a pop. This means each of them will generate $100 in rake. If you’re just on a 30% deal, you’ll get $300 back on that month straight up.

This may not seem like a lot if you’re spreading a $10,000 bankroll to back your players, but in the end of the day, that’s extra 3% you can have guaranteed each and every month. From a business perspective, you’ll always rather have that money than leave it at the table or let someone else have it. It just makes sense.

Benefits for Your Players

Apart from you having a share in the rake generated by your affiliated players, you’ll often be in a position to offer your players additional incentives. For example, if you’re a bigger affiliate, rooms will often give you special races limited only to those who signed up through you. This will increase your players’ winnings, which, ultimately, translates into better returns for you once again.

Additionally, as an affiliate, you’re in a position to negotiate better rakeback deals for those playing under your link so you can give them even more incentives. This is especially true if you’re looking to stake players to play cash games where rake and rakeback are of the utmost importance.

In the end, if you’re looking at online poker as a business model, it is a good idea to look for each and every way possible to add extra few percentages to your bottom line. If you can also help your players in the process and give them a better deal that creates more money for them as well, all the better. After all, the happier they are, the more motivated they’ll feel to play and rake in the cash. 

Drawbacks of Affiliation in the Staking Game

There are certain downsides that you’ll need to consider when looking to mix staking and affiliation. One of the biggest drawbacks is the fact you won’t be able to put your players in action on just any room out there.

For example, many of those looking to stake for online tournaments prefer to have their players on PokerStars because all the biggest events take place there. However, you’ll hardly find a good player that doesn’t have a PokerStars account already to sign them up under you.

This means that you, as a backer, will need to do some homework and research the online landscape to find a room that fits your needs and that you can also get a decent affiliation deal with. This can take up some time and effort and there are many backers who feel like it’s not worth it for them. They believe these extra few percentages aren’t worth their time.

However, if you’re serious about backing and plan on having more than one or two occasional players staked, you need to think long-term. If you invest some time in finding the perfect room for your players to play at, those few percentages will add up nicely over time. It may not seem like a lot every individual month, but if you end the year up a few extra grand, it’s nothing to sneeze at.

Cash Games vs. Tournaments

The same question that applies to poker in general applies to staking as well. Is it better to put your players on cash tables or have them grind tournaments? Unfortunately, this isn’t a question with a simple and clear answer. Like so many other things in poker, it all depends.

However, if you’re looking to take full advantage of your affiliation deals as a part of your staking agenda, staking players for cash games is probably the way to go. There are several reasons for this:

  • It is easier to find good cash games on smaller rooms
  • Cash games are better rake generators
  • If you have a good lineup, variance isn’t as brutal with cash games
  • It is easier to move your players up and down the stakes

Cash game tables at smaller sites can often be very lucrative and are populated with casual players not well-versed with the game. This will directly impact your players’ hourly and BB/100, meaning they’ll earn more money for you and themselves straight up.

If you also have a good affiliation deal that you signed up your players under, you’ll also get a nice chunk of money from their play. The rake adds up quickly on cash tables and if your stakees put in serious hours, you’re looking at tidy returns every month.

If you’re feeling really generous, you can even share some of those profits with your players to give them more motivation to play or to reward them for their efforts.

Furthermore, as someone looking to maximize returns and minimize losses, you want as much flexibility as possible and this is much more obtainable with cash games. If one of your players is really good, you want them to play as high as possible and it will be much easier to move them up. Conversely, if one of your players is struggling with their current stake, you can easily move them down for a while, limiting your losses and giving them an opportunity to regain their confidence and fix any leaks they might have.

Reinvesting Your Affiliation Profits

If you’re someone with a really long-term plan looking to build a serious staking business, you can use your affiliation proceeds as means to improve your business and make your group the best it can be.

For example, you could invest a part or all of your affiliation profits into hiring coaches to regularly work with your players. Since this is extra income as it is, you can probably afford to give it up and invest it into helping your players become better. Having a good coach who is a proven winner in the games your players are playing is guaranteed to improve their knowledge and abilities, which will eventually translate into more money for you.

Of course, if you’re doing this, you need to be careful, because you’ll be giving up on a fair bit of money to build your team. You don’t want your players to become better and then bail out. Make sure there are clear contracts and mutual understanding about your plans and future goals and ensure everyone in your group is aware of them. 

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Should I Try It?

Staking is a serious business that involves risks and there are no guarantees. You need to have a good enough bankroll to make it work and you need to be able to pick the right players. If you aren’t that knowledgeable about poker, hire someone who is, because your entire success will depend on the players you stake.

That said, if you’re looking to get involved with the staking game, you should definitely try your hardest to combine it with a good affiliation deal for all the reasons we explained in this article. It will boost your profits, help soften the variance, and give you some additional cash you can reinvest into making your staking operation better and more profitable.

This isn’t a decision you should rush into. You can start slowly by first taking look into various affiliation deals available to you and figuring out which one would be best-suited for what you’d like to achieve. Once you have that figured out, presuming you have a big enough bankroll, you can start looking for players to embark on the staking adventure with you.

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