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Poker staking helps players buy into bigger games, and backers can perhaps turn a profit without playing themselves. In other words, staking in poker is when a backer gives a player money to play (buys action) in return for a share of their winnings. Here’s all you need to know about staking in the poker world and where/how you can participate.
PokerListings AuthorJuly 23, 2024 · 18 minutes to read
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Poker Staking Definition:
The act of putting cash up on behalf of a poker player. With the agreement that the person staking will receive a share of the winning money (cash game) or tournament prize. The one who puts the cash up is the backer, while the backed poker player who receives the stake is referred to as the horse. Staking is an investment. Ref: Poker King & Upswing
This is where a player receives money to play in either games of their choice or ones preferred by the backer. It’s similar to what angel investors do: put money into a prospect they believe will yield a positive return. However, instead of the investment being a company, it’s a poker player.
Early staking deals used to consist of nothing more than a handshake agreement between two people. Whereby someone gave someone else X dollars in return for Y percentage of their winnings. It may have been one professional poker player backing another or a business person supporting a rising star.
Today, it’s more sophisticated. There are still deals based on trust. However, online poker players will often sign contracts that lay out the terms of the deal. Including everything from the time period and specific games to staking taxes and markup. All are agreed on ahead of time. This is because stakers and backers usually don’t know each other.
Anyone can support anyone with dedicated staking sites connecting people wanting to invest with people wanting funds. This made it a lot easier to get backing in poker, but it also increased the risks. That’s why contracts are commonplace. Moreover, it’s why a backer will often have much more input into their horse’s (horse = the person being staked) activities at the felt.
Why would you want to get staked or start staking poker players in cash games and tournaments? The answer is variance - because poker is a swingy game. Even if you’re the best player in the world, there will be times you go on a losing run.
Online and live poker staking help:
Say you’re a winning player at $100 NL but don’t want to risk your poker bankroll to take a shot at $200 NL. High stakes players competing in $100,000 buy-in tournaments usually have a backer or they’ve sold a piece of their action.
The backer’s investment has to be worth the risk - a +EV move to earn money without playing. So, a lot of research usually goes into finding someone to stake. Including a player’s stats, ROI, community opinions, and hands analysis. A player has to be strong enough in all areas if they want to be staked. Likewise, backers need to invest in the right people.
Yes, it’s a great way to earn money if you’re a backer, and great to reduce variance and risk for players. However, both have to work in harmony.
What steps should you take to secure a deal and what will that deal look like?
Step 1: Find a backer/staker. You can do this through dedicated staking sites, real money poker sites like GGPoker, forums, social media, or through friends.
Step 2: Prove your worth. Any poker staking platform or individual will want to see how good you are. This means showing your results and, possibly, running through some hands with a backer to demonstrate your thought process.
Step 3: Agree on terms. Every deal will be different. As a general rule, the profit split will be 50/50. However, the backer might see you as a bigger risk and demand a greater share of the profits. The terms will also include the following:
Step 4: Receiving/Sending your funds. Once the agreement is complete, the backer transfers funds to the player account to play online games or live games.
Step 5: Playing and tracking. Playing outside of these games can nullify the contract and incur financial penalties. There may be scope to play outside of the contract, but this has to be agreed upon with the backer. Finally, the player has to track results and share them with the backer.
The backer and horse (player) agree to a certain split percentage, which depends on the type of games being played. If the deal is for low-stakes online cash games, the backer’s risk is low. However, if the player is competing in a series of $25,000 high-roller tournaments, the risk is high. So, the higher the stakes and risk, the greater the backer’s percentage will be.
Let’s assume the deal is for standard online MTTs with $10-$100 buy-ins, considered a low-medium risk. The backer agrees to stake $2,000 and is happy with a 50/50 split, minus the stake (known as stakeback.) The player and the backer each take 50% of any prize money won. However, because the backer is taking the risk, they also want the stake back. Some deals require the stake to be paid first.
Here are the different scenarios:
Some poker staking deals don’t require the player to pay back the stake instantly. In this scenario, the stake is a floating debt that’s always there. However, anything the player wins will be split according to the agreed terms. The stake only has to be paid back at the end of the deal or within a timeframe the backer decides. The backer always gets their stake back and any profit is split based on an agreed %.
Poker staking makeup is a type of debt - it’s money the player owes a backer because they lost it. If you quit playing poker forever, the debt goes away. Alternatively, you can pay the money out of your own pocket and renegotiate. What many do is continue playing for a backer and try to pay off the debt.
For example, the player gets a $1,000 stake and loses it all, falling into $1,000 worth of makeup. The scenario can play out like this:
As a player, once you’re out of makeup, you have the chance to start earning money for yourself. We suggest not taking any other deals while still in makeup because this is frowned upon and may tarnish your reputation.
Poker markup is where you charge a premium for investments. For example, you could be selling action for a $1,000 tournament. If you were selling at face-value, a 10% stake would cost $100 (10% of $1,000 = $100). However, you’re a strong player with a positive return on investment (ROI). Therefore, you believe you’re a better investment than the average player.
If that’s the case, you can charge markup. Instead of selling at face value, you decide to charge a 10% markup. That means the cost of investing is now $110 instead of $100. The formula for calculating this when staking in poker is:
$1,000 buy-in X 10% stake X 10% markup = $10 added to the cost of investing
(1,000 X 0.10 X 0.10 = 10)
Most players use their ROI and expected value (EV) to determine how much markup they charge. For example, if a player has a 10% ROI over 5,000 tournaments (i.e. they’ve made 10% more than they’ve invested), they’ll say their EV is 10% better than the field. Therefore, they’re entitled to charge 10% markup. Of course, other people may not agree. However, this is the general principle players work towards and, in turn, how markup in poker works.
Many cash game and MTT poker staking agreements are one-time affairs. Someone wants to play a specific tournament, someone else offers to cover their entry fee and it’s game on. Yet sometimes, there are long-term deals:
Usually when there’s a big event happening like the World Series of Poker (WSOP). Even players with a world-class poker tournament strategy will ask a backer to cover them for XX amount of money or XX number of events. All the clauses with regards to makeup and paying back the stake apply.
The backer agrees to cover the cost of XX number of games/hours per day/week for a set period. This could be six months, a year, or more.
People that don’t want to enter into formal long-term deals can still get financial help by selling pieces of their action. Selling a piece can be done for single events or, more commonly, a series of events. For example, you want to play 20 MTTs on GGPoker for the online WSOP.
The total cost will be $3,500 and you want to reduce your risk. So, you sell 60% of your action ($2,100 total) split into 10 equal chunks and put in 40% of your own money ($1,400). Each person can buy a piece of you for $210 and get 10% of anything you win.
Yes, you’re trying to get money to move up and play bigger games or offset your risk. But cash game staking doesn’t usually involve standard 50/50 deals.
For example, you’re a winning player at $5/$10 and you want to take a shot at $10/$20, for which a backer offers you a 50/50 split. You’re playing for double the stakes but giving away 50% of your profit. Theoretically, you’re only going to win the same amount of money. Plus, $1/$2 games are likely to be tougher. So it’s not worth having a 50/50 deal with the same earning potential against better players.
It’s better to have a 25/75 split that’s weighted in your favor or sell percentages. So you can control how much risk you have and your potential rewards. You may decide to sell 30% of your action and take 70% of anything you win.
Whatever deal is on the table, the reason poker tournament staking is popular is because of variance. The variance in MTTs is much greater than cash games. The number of players in the running makes a difference. Because 1,000 players is tough to beat; particularly when blinds continually go up and there are bad beats. Of course, the payoff for accepting more variance is the amount of money you can win.
It’s possible to enter a $100 online tournament and win $250,0000. That’s a huge return on your investment. However, the problem is that you may have to play 200 MTTs before you hit a score like that - if ever.
For the backer, it’s a risk vs reward proposition. Is the player good enough and consistent enough? Basically, can a player win more than they lose over a long period? It might take months for a tournament player to recoup their losses and generate a profit. Backers accept this because they know the player/s they’re staking can win in the long run and, moreover, they can hit the jackpot one day.
Staking poker players has become big business in recent years. Investors and successful pros have spotted gaps in the market and created staking poker sites. With a variety of deals and the added benefit of having official contracts.
For investors, these websites and apps allow them to build up poker staking stables. This gives them strength in numbers. The more strong players they back, the more chance they have of making a profit. Basically, backing deals can be good business for all involved. So, here are some of the best poker staking sites:
GGPoker even won an award for its staking innovation which allows you to buy and sell action via its client. Instead of passively watching, you can invest in players at all levels. Or sell your own action at a price you think is fair.
YouStake is a crowd-funding site for poker. You list a package of events you want to play, set the price and decide the markup amount (a premium charge players apply to the package price.) Once you’ve posted your package, people can invest via a secure payment process and legally binding agreement.
ChipMeUp launched in 2008 and allows you to buy and sell action. What’s unique about this poker staking online site is that you can often buy pieces of famous players.
This poker backing website is similar to its peers in that you can buy and sell action for a variety of tournaments. However, what’s unique about PokerShares is that you can also bet on players. This means you can invest in the fortunes of another player without staking them.
Another way to get backing in poker is through forums and social media. For example, if you can prove you’ve got strong results, you may be able to get backing from the PokerListings community or via other online platforms.
Regardless of whether you’re the backer or the player, the numbers have to add up. To guide you in looking for a backer (or a stake) - here are some points to consider.
If you have a negative ROI or can’t show a consistent win rate, no one is going to back you. In most cases, you’ll have to have positive results for at least a year. Anyone can win a big MTT and look like a pro, but can you do it consistently?
A standard split is 50/50, but you may be able to get a bit more. Don’t take up a deal that gives you any less than 50% of your winnings unless it’s under exceptional conditions. For example, if you typically play $100 MTTs but someone is investing in you and putting up $10,000 for an event, 70/30 might be OK. However, if it’s a fairly standard deal, 50/50 is the baseline.
Markup is a premium added on to the cost of a package. Usually, players will charge it if they believe they have an edge. You’re aiming to attract investors, so either way, don’t be too overconfident with markup.
For example, Fedor Holz playing a $100 MTT has a huge edge. He may charge 20% extra for a piece of his action. So, if he was selling 50% ($50) to five people, the standard price without markup would be $10 ($10 X 5 = $50). However, because he’s confident, he’s charging a 20% premium. This means someone would have to pay $12 instead of $10.
Backers carry the most risk - So, why then would someone start staking a poker player? Well, the upside can be huge. If a backer puts someone in the $10,000 WSOP Main Event and they win it for $10 million, the backer is going to get a few million dollars.
However, the risk is just as big. They’re putting up the $10,000 and, because there are thousands of players in the Main Event, the odds are that the stakee isn’t going to win. The variance is slightly lower in SNGs and cash games, but still quite high.
Meanwhile, the player has the pressure of performing well and there’s also the issue of makeup. So, while the player doesn’t risk as much, they have commitments to keep.
No risk to your own money.
Someone else is covering the costs, so your bankroll stays intact. Yes, you have to give away some of what you win, but you don’t have to suffer the downside.
You can move up limits.
Staking is a great way to access games that are beyond your budget but, perhaps, not beyond your skill level.
It takes the emotion out of poker.
Losing hurts, but less so if it’s someone else’s money. So you can play poker online or live while, in theory, making better decisions.
Access to coaching and advice.
Most backers will either offer coaching or connect you to a team of coaches. It’s in the backer’s interests to make you the best player possible.
You don’t keep all the winnings.
The biggest reason people don’t like being staked. Although someone covers your costs, they get to take some of the profits when you’ve done all the hard work.
Makeup can sting.
You may be in so much makeup that you’re playing just to pay off your debt. This piles on pressure and takes the fun out of poker.
You have commitments to fulfill.
Agreements come with T&Cs. You have to play a certain number of hands/games per week. Or study/review hands and complete various reporting tasks.
Both backers and stakehorses need to remember there’s a lot of variance in tournaments. The reality is that a lot of the tournament superstars may be in a lot of makeup and not pocketing a lot of profit. So even the best players can go for weeks or months without cashing.
And even then, just because someone has $1 million in MTT earnings, doesn’t mean their bankroll is $1 million, as they may owe a backer $990,000. Therefore, you need to decide whether staking or getting staked is the right thing for you.
But yes, it can be worth it. There are plenty of reasons to get staked, including reducing your risk, costs, accessing bigger games, and much more. It may open up a world of opportunities you didn’t have before.
ACTION
This is the amount of yourself you want to sell i.e. it’s the percentage of your action someone can buy.
BACKER / STAKER
The person/s who puts up the money for you to play is the backer.
BANKROLL
This is the money you have set aside to play poker with friends or people you don’t know. Your bankroll can also be the amount of money a backer gives you to play.
CUT
This is the amount of action a backer takes. It’s their cut of the profit you make and is often set as a percentage.
DEGEN
This is a reckless, often weak player who gambles away their money. Degens are often looking for a stake because they’ve squandered their own money.
ESCROW
Third parties that hold money when an agreement has been made. This can be a person or a company. The escrow is responsible for the safekeeping of the money and its transfer at the end of the contract.
INVESTOR
Another term used to describe a backer. It’s the person investing their money into someone who plays poker.
PACKAGE
Players looking for backing will put together a package that covers a variety of events, typically within a single series.
PIECE
Having a piece of someone means that you own a percentage of their action and, in turn, are entitled to that percentage of their profit.
PLAYER
This is the person who has been staked.
RAIL THREAD
Staked players will often chart their progress online via a forum thread or social media network. It gives backers and fans a chance to monitor their results.
RESERVE
Strong players will often be able to sell a certain percentage of their action under closed conditions before making their package public. This is a way for backers to reserve a piece of strong players before it goes on sale to everyone else.
ROLLED
Rolled is the term used when someone takes a backer's money and is never seen again. In essence, the backer has been rolled over.
SCAMMER
Scammers are dishonest players that will lie and cheat to extort money from people.
SHARES
Shares is another term for pieces of a player. You buy shares in a player and, thus, own a percentage of their earnings.
SHARKSCOPE
Sharkscope is an online tracking site and database for SNG and tournament results. It’s a great way for backers to check a player’s credentials and a player to prove their ROI.
STABLE
Staked players are often called horses because the term “to back” comes from racing. Therefore, a backer with multiple horses is said to have a stable.
STAKEHORSE (Or horse)
Another way of describing a staked player.
SWAPPING ACTION
Players may decide to swap action instead of buying a piece of each other. This means they’re trading a percentage of their winnings for a percentage of another player’s winnings. They both have a piece of each other but no money has changed hands.
