The Ultimate Guide to Poker Staking (2020)

The Ultimate Guide to Poker Staking
This post was written by blackrain79.com guest contributor Roger Marquez

Poker staking has blown up in recent years. In fact, many people are shocked to learn that most high stakes pros these days are staked (i.e. they are not playing on their own money).

Now there are many different staking arrangements these days and many in between cases where a pro still has 50% of his/her own action or 25% or some other amount.

And the reason why staking is so popular is because it allows poker players to hedge their risk and play in high stakes games that they aren't really bankrolled for.

And it also provides a profitable investment (in many cases) for a wealthy backer who wants to invest in them.

So the bottom line though is that staking is here to stay in poker. Here is your ultimate guide to poker staking in 2020.


What is Staking in Poker?


Staking (also referred to as "Backing") is an arrangement between an investor (also known as backer or staker) and a poker player (known as a horse or stakee). 

The backer funds the player's account by providing the necessary bankroll so that he or she can play poker in exchange for a percentage of the profit.

The reason why this is so popular, as mentioned above, is because it lowers the financial risk for the player. And it creates a profitable opportunity for backers.

It's basically a win/win for both parties, assuming that the horse is a long term winning poker player.


But How Does Staking Work Exactly?


Both parties must negotiate and agree on the terms and conditions under which the backing agreement will be regulated until its termination.

These terms and conditions can vary but the vast majority of staking agreement touch these elements at some level:
  • What stakes or buyins is the player/stakee allowed to play (micro, low, mid or high?)
  • What format(s) is the player/stakee allowed to play?
  • Cash games? NLHE? PLO? Mix-Games?
  • Tournaments (MTTs)? Sit&Go's (SNG)? Single Table Tournaments (STTs)? Heads-Up Sit&Go's (HUSNG)?
  • Are turbos and hyper-turbos allowed?
  • Are satellite tournaments allowed? 
  • If a satellite tournament is won, can the stakee play the target tournament?
  • On what poker sites is the player/stakee allowed to play?
  • What are the minimum monthly volume/hours requirements?
  • What are the number and/or frequency of coaching sessions (if applicable)?
  • What are the profit splitting terms?
  • What percentage does each party get?
  • How often are they splitting profits (also known as "profit chops")?
  • What would be the duration of the agreement?
  • Is it going to be based on the total number of hands/games played?
  • Is it going to be based on a period of time? (i.e. X amount of months)?
  • Is it for just one tournament? 
  • Or a series of tournaments?

I think you get the idea by now.

For a proper staking agreement that is likely to succeed, all of the little details need to be ironed out and thoroughly understood by both parties.

Any other elements NOT covered in the agreement must be discussed directly with the investor/backer before the stakee can do anything.


Different Types of Poker Staking Agreements


Staking agreements come in many different forms to suit the needs and interests of both parties involved more effectively.

Let's discuss a few of the more common types of poker staking arrangements below.


One-Time Poker Staking Agreements


These are most common in poker tournaments (both live and online) and they are often valid only for one particular tournament or a set of them as we will see below.

Sometimes they can also be long term deals though that involve cash games and other formats. Let's summarize one-time poker staking agreements into 3 different types:


Package Poker Staking Arrangements (Mostly for SNGs and/or MTTs)


As the title implies, this type of staking agreement is setup for a specific bundle of tournaments. This is perhaps the least and most uncommon form of poker staking.

This is because many backers do not like to invest in packages since they are a small sample of games and that implies a very high risk to them, due to the short term variance of built into the game of poker.

It is just not worth it for them unless there are special conditions in place. 

So, for the most part, no experienced backer is going to give a full stake to someone, and assume 100% of the risk, for a small sample of tournaments.

poker stake backer

But when you do see it, it is normally used when there's a big poker series around the corner like the World Series Of Poker (WSOP).

This can also involve a big online poker tournament series such as the World Championship Of Online Poker (WCOOP).

By the way, if you want to learn how to start crushing major poker tournaments like this, I have already reviewed the #1 advanced poker tournament course available today, taught by the best tourney pros in the world.

In package staking deals for a big tournament series both parties have to discuss the terms and conditions which are not all that different from the ones outlined above.

However, there are some that are typical of this particular type of staking agreement. These terms and conditions will often include:
  • The number of SNGs/MTTs that are included in the package
  • If there are MTTs around the same time that are not included in the package
  • If for some unforeseen reason the player/stakee did not play a tournament what happens? 
  • Can it be replaced with another MTT that wasn't in the initial agreement? 
  • Or is the money from that buy-in to be returned to the backer?
  • Through what media outlet/communication method will the stakee inform/update the backer?
  • How are bonuses, rewards and any other “extra” money going to be distributed?

I am sure there are many other questions and it will be impossible to cover them all as there are many unforeseen situations that can occur that we can't possibly always know in advance.

This is why good communication between a stakee and the backer is absolutely vital to ensuring the success of any type of poker staking agreement.


Long-Term Poker Staking Deals


These are the most common poker staking deals and normally last between 12 and 24 months.

There's a good reason why this type of staking agreement is the most commonly used and it is due to the fact that staking a poker player carries a very high risk.

This is because of the variance involved in poker (routine ups and downs that can sometimes last for months), and therefore many stakers prefers longer agreements to compensate for this.

In other words, when the staking agreement lasts 12 months or more, there is almost no mathematical chance that the stakee can "run bad" over this time period.

Therefore, assuming that the stakee is a long term winning poker player, there is almost no risk involved here for the backer.

Also, if coaching is offered within the agreement, the backers need to compensate for this by extending the agreement for a longer time period.

This helps to recover all the time and resources invested in the development of the player.

Because, at the end of the agreement, the player will leave the partnership as potentially a very solid and consistent big winner, allowing them to continue playing on their own bankroll, while keeping 100% of the profit.

So if the backer helped get them to this level of development via coaching, then there needs to be some sort of compensation agreed on about this before the staking deal begins.

High quality poker coaching isn't free just because you got staked!


Selling Action - Buy-A-Piece (Also Mostly Used for MTTs and SNGs)


This is another type of staking agreement on which the player is looking to sell a portion of his/her “action," also known as Buy-A-Piece.

This means if a player is looking to spend $1,000 in SNG and MTT buy-ins he/she can sell a percentage and partially cover some of that money.

For example, let's say I am putting together a package for the weekend that involves a certain number of tournaments totalling $1,000 in buyins.

I then set a minimum amount others can invest in me specifying at the same time what is the maximum amount I am putting up for sale.

poker stake markup

Continuing with our example above, I can then say something like I am putting up for sale 40% (meaning $400) of this weekend's action for these specific tournaments and the minimum buy is 5% (this would be a piece), meaning $50.

In summary, I can sell up to $400 and if someone wants to invest in my package it would be for a minimum of $50.

If for any reason I can't reach the pre-required amount money I have planned to spend on buyins I need to state that in the terms and conditions of the agreement.

I have the choice of either assume the full risk myself and carry on with the deal or reimburse everybody that decided to participate.

Now, in the event that I end up running good and binking some big tournament scores, all money won will be distributed proportionally based on the percentage people invested.

For example, if someone bought 10% (meaning $100) of the package he's entitled of 10% of the total amount of cashes.

By that same token, if I end up cashing $1,500 in total (remember I spent $1,000 on buyins) then I need to send that person $150.

Selling action is an extremely common type of staking found on many poker forums and on staking arrangement sites like youstake.com for example.

You basically invest in a good poker player over a series of tournaments and even though you do take on a decent amount of risk, you are riding on the coattails of the high level of poker skill possessed by the horse.


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What is Markup in Poker Staking? And Why Do People Charge It?


Markup is an additional percentage good players charge based on their previous results for these same types of tournaments, because it proves how profitable they are in that format.

It's basically calculated by determining the player's Return On Investment (ROI) for these same tournament types.

For example, let's assume I have played around 4,000 of these same tournaments from my package and I have sustained a 20% ROI.

This would mean that I have an EV (expected value) of $1,200 so, it is normal to charge up to 20% markup or 1.2 markup.

This means that the entire package value is now set at $1,200, and NOT $1,000, because we added the markup in.

So, if someone wants to invest in the package at the minimum buy of 5% WITH markup this would be $60 instead of $50.


What is a Standard Staking Deal? What Should I as a Player Expect?


In my many years of experience under a staking agreement, I can say for sure that the most common terms and conditions for any staking agreement regardless of the format you're playing are:

1. At least a 50/50 deal for both sides

Obviously the more the better, but this would depend on your experience, past results and your reputation in the poker community.

2. Weekly coaching sessions

This can be either 1-on-1 type of sessions or as a group. 

Normally they last for 1 hour and during that time the coach will utilize a hand replayer going through the hands of a tournament and/or any hands marked by another player on the team.

Nowadays it is common for many stables to offer training videos, accessible through a forum or private section of their website where only team members can access them with a username and password.

By the way, if you want to know where to find the best poker training sites available online today, taught by world class elite pros, I have created the ultimate guide for you right here.


Poker Coaching Videos for the Stable (Horses)


These videos vary in terms of content but in general, they are grouped in:

1) Theoretical videos

2) Live sessions or Live Sweats (where a coach has recorded himself playing while commenting on their reasoning and the decision making behind each decision)

BlackRain79 did this recently with his NL2 Mastery Course for example. You get to watch him play live and explain his decisions as he crushes the games.

3) Hand history reviews. It can be an isolated hand a player has some doubts about or it can be an entire tournament.

4) Technical videos (where the use of any software programs used in poker to evaluate and analyze decision making is taught, for example, PokerTracker which is widely used by serious online poker players.)

5) Psychological videos that touch on the mental aspect of the game which is so often underestimated yet it's easily one of the most crucial elements of any winning poker player.


Makeup in Poker Staking


Makeup is another common concept in poker staking. Basically it is the amount owed to the backer and it has to be cleared before chopping any profit.

For example, let's say I hit a downswing and lose $200. And on the next session, I end up with +$1,500 in profit and I request a profit chop.

I need to first deduct the $200 from the $1,500 and chop the difference.


What Are Backers Looking For in a Potential Stakee?


I hate to state the obvious but backers are mostly looking for a player that can generate consistent profit at the poker tables without having to invest that much time and money in developing their skills.

You should be clearly versed in the fundamentals of winning poker strategy for example.

Because this of course is the entire point of the staking arrangement for the backer. Just like somebody investing in the stock market, they are doing it to make a profit.

So this usually means that the player:
  • Has a proven winning track record at the stakes he or she is requesting to get staked for
  • Has a solid reputation in the poker community
  • Has a positive attitude, willing to work with groups, and help other players
  • Has no problem following guidelines and schedules


Why Are Winning Poker Players Looking to Get Staked in the First Place?


So why do winning poker players even need a stake anyways? Well, there are a few reasons why.

Firstly, these deals make sense for both the player and the backer and I can summarize why in one simple word: 

Variance!

Variance once again are the natural ups and downs in the game of poker that can last months or even years in some extreme cases with tournaments in particular.

poker stake horse stable coaching

Staking arrangements help reduce the impact of variance tremendously for the player being staked in particular. The financial support allows them to simply focus on what they do best, playing good poker.

Additionally, the vast majority of staking agreements are for MTTs and for one good reason also. Many tournament poker players do not have the discipline to apply the basic concepts of bankroll management (BRM).

Because when you use proper bankroll management it can actually to take your risk of ruin (RoR) to a minimum, almost zero. The rules are there for a reason!

Why don't many tournament poker players exercise proper bankroll management? This is due mostly to playing outside their limits.

And more precisely entering tournaments at higher stakes than they should. In other words, taking shots in tournaments that are well above their average buy-in (ABI).

By contrast, cash games typically have much less variance in comparison to tournaments but it still plays a very significant role.

Cash game players often have to deal with the emotional distress that causes (inevitably) tilt and prolonged downswings.

And, even proven winning players over a large sample, with a healthy bankroll and the right mindset, decide to take on a staking deal for the sole reason to be able to play at higher stakes than usual.

This way they can “taste the water” without risking their own hard-earned money nor falling into the emotional abyss that negative variance can cause.

At the same time, they can work on their game, studying the high level strategy and poker solver theory necessary to crush these games, without all the pressure of bankroll concerns.

There are tons of excellent advanced poker training programs that they can be learning on the side in order to battle the tougher players at higher limits as well.

Lastly, in some rare cases a solid winning player may enter into a staking deal due to an unforeseen personal situation causing them to have to spend a large chunk of their bankroll (medical bills for example).

And a staking agreement can offer him/her the chance to continue playing at the same buyin levels without having to start building up a bankroll from lower stakes again.


The Pros and Cons of Poker Staking


Alright, let's briefly break down the pros and the cons of poker staking starting with the pros:
  • Not having to risk your own money.
  • Chance to play at a higher stake/limit than you normally do.
  • Try a new format/variant of poker you are unfamiliar or inexperienced with.
  • In some cases you will get “free” quality coaching.
  • Network inside a community of serious winning poker players.
  • Just focus on your game, you don't get so emotionally distressed by downswings.

And now let's look at the cons of poker staking:
  • You're not your own boss anymore.
  • The negative mental impact when being under significant makeup.
  • You have to give away a big chunk of your profit.
  • You can't always play the games and formats you want.
  • You have the contractual and moral obligation to fulfil the agreement including volume requirements.
  • The pressure to generate consistent profit.


Should You Consider Get Staked as a Poker Player?


Ultimately this is only something that you can decide for yourself. There are many advantages and disadvantages as I just listed.

At the end of the day though almost all long term successful poker players get staked at some point in their poker career.

[BlackRain79 - I have been staked for higher stakes games at multiple times during my own pro poker career, even though I have rarely discussed it here on my blog].

Sure, it is pretty easy to smash the lower stakes games yourself with a simple proven winning strategy.

But once you make your way to up to the high stakes games, almost everybody is getting at least partially staked these days.

This is something that most casual poker fans don't know. 

All those million dollar tournament wins you see at the WSOP. Very, very few of them are actually taking it all for themselves.

They have to pay their backers back first, because that's why they are playing in that high stakes tournament in the first place.


Where Can You Get a Poker Stake?


Ok, so you have decided that you do want to get staked as a poker player. Where can you actually get a stake these days?

I would say that poker forums are one of the most obvious places to start looking. Most of the big ones like 2+2 have entire sections dedicated to staking.

Additionally there are many websites dedicated to poker staking that can easily found with a quick google search.

But for me personally, relationships are key within the poker industry. If you want to get the best staking opportunities, it is best to start networking among good players.

Social media and forums are usually the best place to do this. Start getting your name known a bit. And more importantly, get some solid results behind you.

If you do this, you won't even have to go looking for a stake. Backers will come knocking on your door.


Should You Consider Becoming a Backer? (Staking Other Poker Players)


Again, this is something that only you can decide for yourself but as an investment opportunity, I think there are some great returns to be made here.

Sure the variance is absolutely through the roof in large scale tournaments for example. But who wouldn't want to have say 10% of Daniel Negreanu in the WSOP Main Event?

This is one of the winningest live tournament poker players of all time and even though he won't even come close to reaching the final table the vast, vast majority of the time, Daniel has a large edge over nearly everyone else in the field.

He even has a new MasterClass poker course showing people how he created more than $40 million dollars in winnings playing tournaments like this.

So therefore, there is no question that this is a highly, highly profitable investment even though you will lose your money and receive nothing the overwhelming majority of the time.

If you do your homework and research as a backer (just like you would when investing in the stock market or crypto for example), then there is no question that becoming a poker backer can be a highly profitable thing to do.

Make no mistake about it. There is big, big money to be made in the poker staking business.

There are many people who have quietly made massive amounts of money backing other high profile poker players. Most of them prefer to remain anonymous or under the radar.

But there are also many well known legendary backers like Cliff "JohnnyBax" Josephy for example. 

Cliff is actually a highly accomplished poker pro himself, famously placing 3rd in the 2016 WSOP Main Event for $3.5 million. He also has numerous large cashes especially online.


Poker Staking Terminology and Glossary


ACTION
This refers to the percentage a player is offering to sell to potential investors.

BACKER / STAKER
Is the person funding a player so he can go and play.

BANKROLL
Normally applies to the amount of money set aside for playing poker.

CUT
Refers to the percentage of the profits an investor is due from the player at a particular time and whenever he/she is in the black.

DEGEN
Alludes to a player who gambles away their money by playing without control and reasoning ability.

ESCROW
Means a third party who is tasked with holding money for two other parties to guarantee a secure transaction for both.

INVESTOR / STAKER / BACKER
Investor is a term used to describe a person who is backing a player.

PACKAGE
When a player puts together a stake that involves more than one tournament it is commonly called a “package.”

PIECE
Having a piece of a player simply means you have a certain percentage of a player’s action.

PLAYER
The “player” refers to the person being staked.

RAIL THREAD
A rail thread is posted at an online poker forum to allow backers and fans to follow along with the player’s progress in their stake.

RESERVE
Is a term used when a potential backer wants to lock-up a certain number of shares in a player’s stake before they officially go on sale.

ROLLED
The term rolled in staking parlance refers to being scammed by a player; typically “rolling” is used when a player absconds with the stake money.

SCAMMER
Scammer refers to any person (backer or player) who has a reputation for underhanded dealings. Scamming can range from non-payment, to running phony stakes, to an investor free-rolling a player.

SHARES
Shares are equal percentages of a player’s stake.

SHARKSCOPE
SharkScope (www.sharkscope.com) is an online poker tracking site that specializes in Sit & Go tournaments. SharkScope is useful to check a player’s track-record, as well as for monitoring their progress in a stake.

STABLE
A Stable refers to the entire contingent of players a backer stakes, and goes along with the term stakehorse.

STAKEHORSE
Stakehorse is an alternative term for the player being staked.

SWAPPING ACTION
Swapping action is when two players exchange percentages of themselves instead of each person paying the other.


Common Acronyms Used in the Staking Business


ITM –In the Money
MTT –Multi-Table Tournament
ROI – Return on Investment
S&G or SNG – Sit & Go tournaments
STT – Single Table Tournament
MU – Makeup
BR – Bankroll
BRM – Bankroll Management
BI – Buy in
ABI – Average Buy in
EV – Expected value


Final Thoughts


I hope this ultimate guide to poker staking gave you a good understanding of this sort of underground economy within the poker world.

Truthfully, poker staking is something that rarely gets talked about openly in the poker world. So much of it is kept hush hush behind the players and the backers.

But it is important that aspiring pros in particular know that staking is a huge part of the game especially once you move up to higher stakes.

Most people would be shocked to learn just how many high stakes pros are at least partially staked. It is an overwhelming majority.

There are many reasons why this is the case. But the most important is to reduce the variance incurred in high stakes games.

Staking is kind of like a match made in heaven for a solid winning player and their backer. Because the player can just focus on the important part, playing good poker.

The backer takes on all (or part of) the short term risk for them but at the same time gets to have a share in the profit of a long term winning poker player.

Lastly, if you want to know the complete poker strategy that BlackRain79 uses as a 10+ year poker pro, make sure you grab a copy of his free poker cheat sheet.

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This article was written by blackrain79.com guest contributor Roger Marquez. Roger is a small stakes semi-pro from Venezuela with a strong understanding of the math side of the game and poker HUDs.

poker staking