Staking allows skilled players without sufficient bankrolls to play higher stakes while investors gain equity in winning players' results. Understanding staking protects both parties.
Staking Basics: A backer provides bankroll for a player (horse) to compete in tournaments or cash games. Profits are split according to agreement, typically 50/50 after returning the original stake.
Why Players Seek Backing: Insufficient bankroll for desired stakes, preferring to avoid personal risk, or wanting to play without bank roll pressure. Backing reduces personal variance.
Why Investors Back Players: Proven winning players offer positive expected value. Backing multiple players creates diversification, reducing variance through portfolio effect.
Mark-Up: Players sell action above face value when they believe they're profitable. 1.2 markup means selling $10,000 of action costs investors $12,000. Players keep 20% automatically, plus their share of profits.
Calculating Fair Markup: Markup should reflect your ROI over large samples. If you average 20% ROI, 1.2 markup is reasonable. Unproven players shouldn't charge markup—investors take enough risk at face value.
Staking Agreements: Written contracts specify stake amount, games covered, profit splits, makeup policy, and duration. Verbal agreements create disputes—always document terms.
Makeup: Makeup refers to losses that must be recovered before future profits are split. If you lose $5,000 in week one, you're $5,000 in makeup. Week two profits first cover makeup, then split.
Lifetime vs. Tournament Makeup: Cash game backing often carries lifetime makeup—all-time losses must clear before splits occur. Tournament backing may reset makeup periodically or per-series.
Finding Backers: Proven results and reputation attract backers. Share your tracking data, tournament results, and references. Poker staking marketplaces like YouStake facilitate connections.
Red Flags for Players: Backers requesting undefined percentages, refusing written contracts, or demanding personal information beyond verification warrant caution. Research backer reputations thoroughly.
Red Flags for Backers: Players with limited track records requesting high markup, players resisting tracking requirements, or players with reputation problems should be avoided.
Tracking Requirements: Backers typically require detailed records of all play—sessions, stakes, results. Transparency builds trust and verifies agreement compliance.
Tax Implications: Staking arrangements have complex tax implications. Consult tax professionals regarding reporting requirements. Both backers and players have tax obligations.
Modern Staking Platforms: Sites like YouStake and PokerStakers facilitate staking by handling contracts, tracking, and payments. These platforms provide structure and dispute resolution.
Selling Pieces: Many players sell small percentages (1-10%) to multiple investors rather than single backers. This approach diversifies relationships and reduces dependence on single investors.
Ethical Considerations: Players must honor agreements scrupulously—playing unstaked on the side, misreporting results, or breaching contracts destroys reputations permanently.
Responsible Gaming: Backing doesn't eliminate gambling risk. Backers can lose their investment; players can damage their reputations and mental health. Approach staking as serious business with appropriate caution.
Remember: Staking relationships require trust, transparency, and clear communication. Both parties should feel the arrangement is fair and beneficial. Poor staking deals benefit no one.