​​What is Staking in Poker?

Staking in poker refers to an individual or entity financially supporting a player by paying all or part of their Buy-Ins for tournaments or cash games.

In exchange, the payer receives a share of the player’s earnings. The percentage of profits the player pays back is agreed upon beforehand.

It is a popular agreement in which the investor is known as the “backer,” while the player is called the “horse.”

Staking is common in tournaments with expensive Buy-Ins and unpredictable returns. It allows talented players to enter games they might not be able to afford independently.

Consequently, it is a way for backers to diversify their investments across multiple players.

Understanding Poker Staking Agreements

A poker staking agreement is a contract between a backer and a player (horse) that outlines the terms of their staking arrangement. It can be formal or informal.

This agreement sets the foundation for how the partnership functions and ensures clarity and fairness.

Below is a look at how a poker staking agreement works:

Revenue Sharing

The player and the investor decide how the winnings will be divided. A common practice is to split the payout 50/50 after subtracting the Buy-In amount.

Let’s say a backer pays ₹1,000 as Buy-In on behalf of a player in a tournament. After it ends, the player wins ₹10,000 as the payout.

First, the backer will get back their ₹1,000 (Buy-In). The remaining payout (₹10,000 – ₹1,000 = ₹9,000) will be split 50/50.

So, each party receives ₹9,000/2 = ₹4,500.

The revenue-sharing ratio may not always be 50/50. The backer can demand more if they take more risk, such as a 60/40 ratio.

Makeup Clauses

A makeup clause is an arrangement where a player must pay back losses from previous tournaments before splitting any profits.

Let’s say the player lost the tournament with₹1,000 Buy-In and incurred a total loss of ₹1,500.

In the next tournament, they must pay back the whole ₹1,500 to the backer before profits are split.

Makeup clauses balance risks and rewards for long-term staking agreements.

Payment Terms

• Frequency: Payment of profits is usually done immediately after the tournament or cash game ends.
• Method: Agreements may specify payment via cash, bank transfer, or online payment platforms.
• Expenses: Some agreements account for travel, lodging, and food expenses. These are subtracted from the payout, like the Buy-In, before dividing profits.
• Term of agreement: The agreement can be for a single event or cover multiple ones. Some parties form yearly agreements with complex terms and makeup clauses.

Rules for Backer Involvement

A backer may impose conditions on the player in exchange for their financial support. They may mandate rules on game selection, bankroll management, or strategy to ensure responsible use of their funds.

Why Clear Terms Are Essential

Transparency goes a long way to ensure a fair deal for both parties. It is also important for several reasons, such as:

• Avoiding misunderstandings: Ambiguous agreements can lead to disputes, especially when significant sums of money are involved.
• Building trust: Transparency fosters trust between the backer and the player. It helps build a smooth and professional relationship.
• Legal protection: Many staking agreements are informal. However, writing down terms provides a reference point in case of disagreements.

Benefits of Staking in Poker

Staking in poker is a mutually beneficial agreement that creates opportunities for players and backers.

Advantages for Players (Horses)

Benefits for players include:

Reduced Financial Risk

Staking allows players to participate in tournaments or cash games without risking their own money. They can focus on playing the game without the tension of losing personal funds.

Access to Higher Stakes

Financial support enables players to participate in games they may not be able to afford and provides them with an opportunity to win big payouts.

Career Growth

Playing higher-stakes games can improve players’ skills, exposure, and experience. Consistent performance can attract sponsorships or long-term staking arrangements.

Mentorship

Many backers are experienced players or investors. They can provide strategic advice and guidance to help players improve their decision-making and bankroll management.

Benefits for Backers

Backers stand to get several advantages, such as:

Profit Potential

Skilled players with consistent success provide backers with generous returns on their investments. Backers can earn a share of profits without playing.

Investment Diversification

Staking allows backers to fund multiple players and spread their risk across games and events. It also helps them increase the likelihood of earning more profits.

Low Time Commitment

Backers don’t need to dedicate time to developing skills or participating in tournaments. They only pay the Buy-In and focus on other interests or investments.

Engagement in the Poker Community

Many retired players become backers once they quit poker. It allows them to stay connected to the poker world and keep enjoying the thrill.

Risks and Challenges of Poker Staking

Staking in poker does not come without risks and challenges. Below are the potential pitfalls investors and players may experience.

Risks for Backers

Common challenges faced by backers include:

Financial Losses

The primary risk in staking for an investor is the risk of losing their money. Poker is unpredictable, and even skilled players can experience losing streaks.

Player Underperformance or Dishonesty

A player may fail to perform due to several reasons, such as lack of focus, overconfidence, or personal issues. They may also be dishonest and misuse funds or report winnings inaccurately.

Lack of Transparency

Disputes can occur over profit-sharing, expenses, or playing schedules, especially without a clear agreement. Backers may struggle to track if the player is fulfilling their promises.

Makeup Clauses

Makeup clauses can become complicated. Backers might feel trapped in a losing arrangement, forced to fund players without expected returns.

Risks for Players

The primary risks for players are:

Pressure to Perform

Playing with borrowed funds might make players feel stressed and lead to poor decisions. The pressure can become more intense in high-stakes games.

Limited Earnings

Players must split profits with backers based on the staking agreement. They don’t get to keep the whole payout.

Even a significant win might feel inadequate after splitting proceeds.

Restricted Freedom

Backers may force conditions, such as limiting a player’s ability to play or participate in tournaments. This lack of independence may frustrate players who prefer to stay flexible.

Additionally, they may feel trapped by makeup clauses.

Types of Staking in Poker

An investor can cover the Buy-Ins of a player in several forms. The primary ones are:

Full Staking

In full staking, the backer pays 100% of the Buy-Ins and any expenses for the player. Apart from individuals, companies provide full staking to professional players.

The player doesn’t need to pay for anything in the games.

The profits are shared after deducting the Buy-In amount and expenses. Makeup clauses are often part of full staking agreements.

Example:

A backer funds a player for a ₹5,000 tournament. The player wins ₹50,000.

The lodging and food expenses of the player amount to ₹2,000.

So, profit is ₹50,000 – (₹5,000 + ₹2,000) = ₹43,000.

Profits are split 50/50. So, each person gets ₹21,500.

Partial Staking

In partial staking, the backer pays only a part of the player’s Buy-Ins. The player or another investor covers the rest.

It is an excellent arrangement to distribute financial risk between two parties.

Profits are shared based on the proportion of contribution each person makes for the Buy-In.

Example:

Let’s say a tournament has a Buy-In of ₹1,000.

• The backer funds ₹700 (70%)
• The player covers the rest ₹300 (30)%

So, the profit-sharing ratio is 70/30. The player wins ₹10,000.

• The backer gets ₹7,000 (70%)
• The player takes home ₹3,000 (30%).

One-Time Staking

This is a short-term arrangement in which the backer covers the Buy-In for a single tournament or game. It is ideal for players looking to participate in a particular event without a long-term commitment.

The profit is shared similarly to full or partial staking based on each party’s contribution towards the Buy-In.

Long-Term Staking

Long-term staking involves supporting a player over multiple tournaments or a predefined period. It comes with detailed agreements covering expenses, makeup clauses, and performance expectations.

Profits and losses are calculated in total for the entire staking period.

Tips for Players Seeking Staking

Are you looking for someone to support you financially in playing poker?

Below are actionable strategies to improve your chances of finding a backer.

Build a Strong Poker Resume

Your track record speaks for you. Showcase your experience, skills, and results.

• Include key metrics like tournament cash, ROI (return on investment), and win rates.
• Show variance awareness by explaining how you manage the ups and downs of poker.
• Use online tools to create personal poker statistics and provide reliable performance data.

Establish a Positive Reputation

Poker staking is built on trust. Therefore, develop a reputation for being an honest and reliable player.

• Be professional and handle all interactions with courtesy and respect.
• Honour agreements and stick to staking terms without exceptions.
• Attend poker events, participate in forums, and engage in online communities to build your presence.

Use Social Media

Players get many staking deals online. Therefore, social media and the internet can be used to gain exposure.

• Explore Facebook groups, Discord channels, and poker-staking forums.
• Build a professional profile on staking platforms and highlight your skills and experience.
• Share your successes and failures honestly to build credibility.

Maintain Transparency and Communication

Backers prefer to support players who are open and can communicate effectively.

• Share game results and progress promptly. Always keep your backer updated.
• If you fail to perform, explain the reasons honestly.
• Maintain a detailed record of all tournaments, stakes, and outcomes.

Be Realistic and Fair

Don’t promise too much or ask for unrealistic terms when you begin your staking career.

• Accept reasonable splits. Backers take more risk and deserve proper returns.
• Expect less favourable terms if you’re new. Don’t compare yourself with seasoned players.

Tips for Backers in Poker Staking

Backing players in poker can be rewarding. However, it is not without risks.

Below are a few actionable tips to keep in mind.

Evaluate Players Thoroughly

Choosing the right player is crucial to ensure success.

• Analyse track records. Look for consistent results, ROI, and win rates.
• Review playing style. Ensure the player’s style aligns with profitable and proven poker strategies.
• Research the player’s reputation in the poker community, including online forums and reviews.
• Speak to former backers or players’ peers and ask about their experience.

Understand Variance in Poker

Learn to accept that even pro players in poker go through ups and downs in their careers.

• Accept that losses are a part of the game. Moreover, don’t panic when the player doesn’t perform.
• Diversify your investments. Distribute risk by supporting multiple players.
• Analyse bankroll management. Ensure the player is disciplined in handling Buy-Ins.

Set Clear Staking Terms

The best way to avoid disputes is to agree and document all terms.

• Clearly define how profits will be divided. Always agree upon a ratio.
• Decide how you will handle losses. Define clear makeup clauses.
• Specify the tournaments or games the player is allowed to enter.
• Agree on when and how the player will pay the profit share.

Draft a Staking Agreement

A written agreement provides reference and protects both parties.

• Outline stakes, splits, makeup, and other rules.
• Specify how players will report their results and manage bankrolls.

Manage Risk Wisely

Poker staking comes with financial risk and needs backers to be strategic.

• Start small if it’s your first time. Invest a small amount or support a single player.
• Stake funds that you can afford to lose. Don’t go overboard and risk your finances.
• Support players across playing styles and game formats to spread your investments.

Monitor Performance Regularly

Track a player’s performance to make informed decisions.

• Seek regular reports on matches and results. Ensure proper usage of funds.
• Look for signs of overconfidence or deviation from agreement terms.
• Reconsider your investment if a player continuously underperforms or breaks agreements.
• Know when to walk away and stop throwing away your money on a losing venture.

Examples of Successful Staking in Poker

Let’s explore real-life success stories that showcase the importance of trust, skill, and strategy in poker staking.

Chris Moneymaker’s 2003 WSOP Main Event Win

Chris Moneymaker entered the 2003 WSOP Main Event through an online satellite he entered for $86. A friend and part-time backer contributed a portion of his Buy-In and staked him in the tournament.

Moneymaker made history by winning the Main Event and a $2.5 million prize.

It shows that trust in a player’s skills can bring extraordinary returns, even for lower-stakes Buy-Ins.

The Bryn Kenney Syndicate

Bryn Kenney is one of the top poker money earners of all time. He has built a reputation for staking other players, managing staking syndicates and supporting multiple players at a time.

Some of Kenney’s staked players have gone on to win millions. A few notable names among them are:

• Nick Petrangelo
• Stephen Chidwick
• Jason Koon
• Fedor Holz

Kenney showed how diversifying investments across multiple players can reduce risk and increase returns.

The 2017 WSOP Success of John Hesp

John Hesp was a recreational player who wanted to play in the WSOP to fulfil his bucket list wish. His friends pooled in and supported him financially for the 2017 WSOP.

Hesp finished fourth and earned $2.6 million. His backers walked away with a sizable share of the winnings.

The incident shows that even skilled recreational players can be a good choice for staking.

Erik Seidel and Supporting the Next Generation

Poker legend Erik Seidel has always loved staking new and upcoming players. His mentorship and financial support have helped launch the careers of several poker pros, such as:

• David Peters
• Nick Petrangelo
• Stephen Chidwick

Erik’s initiative proves how mentorship and guidance can enhance the value of staking relationships.

Is Poker Staking Legal?

Poker staking is legal in many countries, while it operates in a grey area in other regions. The legality of poker staking largely depends on the laws and regulations of the specific country or state.

Here’s a closer look:

United States

Poker staking is generally legal in the US in regulated environments like casinos or licensed online platforms.

However, challenges may occur in states with strict anti-gambling laws. In these places, staking could be interpreted as an illegal gambling activity.

Europe

Staking is widely accepted in most European countries. It is regularly practised in well-established poker markets like the UK, Germany, and Spain.

However, licensing requirements and gambling laws are to be respected.

Asia

Staking is common in live games in countries like Macau. However, some Asian countries like China and Indonesia have stringent anti-gambling laws.

Supporting a poker player financially can become problematic.

Australia and New Zealand

Staking is a common practice in regulated environments. However, it may invite scrutiny outside official venues.

Acceptance in Regulated Poker Markets

Live tournaments like the WSOP or EPT view staking as legal. Players and backers openly arrange deals before or during events.

Reputable online platforms allow staking through integrated features. They always ensure compliance with gambling regulations.

Potential Legal Concerns

• Staking in unregulated games or using unofficial channels may lead to legal issues, especially in disputes.
• In some jurisdictions, staking may be perceived as a form of illegal gambling or financial arrangement.
• Backers and players may face tax liabilities on winnings in some jurisdictions.
• Informal agreements without written terms may lead to misunderstandings and disputes.

FAQs on Staking in Poker

What is staking in poker?

Staking in poker is an arrangement where a person covers the Buy-Ins of a player for a share of the profits. The revenue-sharing ratio is often predetermined.

How does a staking deal work?

The backer (the investor) pays full or a part of the Buy-In for the player. In return, they get a share of the payout won by the player after deducting the Buy-In amount. The player must pay back any losses if they fail to perform in the next event. The agreement can have other terms dictated by the two parties.

Can players reject makeup clauses?

A player may negotiate or reject makeup clauses if the backer agrees. Staking is not a legal contract, and the two parties are free to decide on the terms. However, both need to agree to the stated terms in the agreement.

What are the benefits of being a backer?

A backer can receive a share of the profits won by the player without participating in the game. Additionally, they can support a player and inspire their career.