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Poker Staking

by Wesley R. Young

Poker StakingA “stake” in poker terms is a trade of bankroll money or entry into tournaments in exchange for a percentage of the winnings.

There are numerous ways to set up staking arrangements and many things to consider before entering into an agreement. I've listed many of these below, but there are other ways to set a poker staking agreement up. The terms and conditions are only limited by your imagination and what two people can agree on.

Staking Other Poker Players

The two most common forms of staking other players involve “buying” a percentage of future winnings. The first deals with a portion of tournament winnings in exchange for some or all of a buy-in for the tournament. The second is providing a bankroll (or percentage of a total bankroll) for ring game play in exchange for a percentage of winnings measured over set time intervals or at certain increases in total bankroll.

Most poker tournament stakes are on a 100 to 50 ratio. For example, if I put up 100% of your buy-in, I receive 50% of your winnings. Ring game percentages vary, but also generally fall close to a 100 to 50 ratio. Here are a few examples of each.

Staking a Tournament Poker Player

I pay 100% of your entry fee to a tournament. You pay me 50% of whatever you win in the tournament.

I pay 50% of your entry fee to a tournament. You pay me 25% of your winnings for that tournament.

A popular system of staking among professional poker players is to buy a piece of many players in a big tournament. A backer may pay 10% of the entry cost for 10 different players, securing a 5% stake in each of their winnings.

Staking a Ring Game Player

I give you $3,000 to play 5/10 limit Texas holdem. Every 30 days you pay me 50% of your winnings. This example assumes a 300 times the big bet bankroll, where I am staking your entire bankroll. You have the option to buy your stake back after 12 months for $3,000.

You have $1,500 and I give you the other $1,500 to play 5/10 limit holdem. Every 3 months you pay me 25% of your winnings, with the same 12 month option to buy back your stake.

Thomas “Thunder” Keller, who stakes quite a few poker players, always attempts to set up long term staking arrangements with pre-set cash out points and make up contingencies. Long-term agreements tend to favor the backer, assuming the staked player is a winning player, as the backer stands to profit from a long term winning average. There is nothing wrong with this, as the backer is taking all of the risk in a staking agreement.

A pre-set cash out system is one where no money is taken from the bankroll until certain financial levels are reached. For example, if you stake a player $3,000, you may set a level at $4,000. When the bankroll reaches $4,000, you each take $500, and the next cash out comes when the bankroll hits $4,000 again. This way, if the player has a bad session, they have to “make up” the losing session before cashing out any winnings.

Poker Staking Warnings

There are two important things to be clear about when considering a staking arrangement. Only stake players who you completely trust and who have strong and consistent winning records and cover everything in detail before starting. By spelling out every last detail you will prevent hard feelings and possible money disagreements in the future.

Many players who stake other players lose money doing so. To help reduce the possibilities of losing money, try to avoid staking players who are in desperate financial situations. Players in these situations may not be mentally able to play their best game. I realize this may seem like strange advice because if player isn’t in a bad way financially they wouldn’t need a stake. However, many profitable players prefer being staked as a way to further reduce the variance of their bankroll, or to play at a higher limit than their current bankroll allows.

Looking for a Poker Backer

If you are looking for a backer (see poker terms for definition) to fund your poker bankroll, I have included a few guidelines to consider. When you combine the staking information above and these suggestions, you will be well on your way to finding a potential backer.

Keep accurate and detailed records of your play. Potential backers will want to see proof that you are a good investment. The best way to do this is with records. Before you think about leaving off a losing session or two, remember that most backers play a great deal of poker and are well aware that even the best players have losing sessions. It is not a good idea to enter into a business relationship based on lies and false information. These types of things have a way to come back and sour a relationship.

Be honest with potential backers. They will want to know why you need a stake. If you have had a bad run, tell them about it and what you have done to reverse the trend. Do an in-depth study of your game before they ask, so you can have the details ready. When you are looking for a stake to play at higher limits, how do you know you can win at the higher stakes?

The first place to look for potential backers is players who are familiar with your play. If they know you are a winning player, they may be more open to backing you than someone who doesn’t know how you play.

When you consider approaching anyone about potential backing that does not play poker, the detailed records mentioned above will be very important. Assuming you are approaching friends or family, records are the only way to give them assurance that a stake can be profitable for them.

Before accepting a stake from a close friend or family member, make sure you will be able to live with the consequences if the deal does not work out. Poker is a volatile game, and if you lose a stake at the tables, is it worth losing a friendship over?

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