News: Poker Basics – How does poker staking work?

With the WSOP on the horizon, learn how so many players are able to afford to play in big buy-in events.

A staking deal exists between two or more players to share profits

When people are new to poker they assume that all poker players are so rich they can afford those big buy-in tournaments you see on Twitch and TV. That is usually not the case. Most professional poker players use some form of staking to play in the bigger MTTs they enter. 

A staking deal is where a poker player gives another poker player some money to play poker with, in return for a percentage of the profits if they win. If Player A pays for Player B to play in a $100 tournament they might agree a 50% split. If Player B goes on to win $1,000 then they will give Player A their $100 back, then each take $450 of the remaining $900. 

Poker players need staking for a number of reasons. It can be because they have bad money management skills, they have gone broke playing or because they get a mental game boost by not having to play with their own money. The most common reason, however, is to take shots at bigger games while also reducing their variance. 

Reducing variance and taking shots

Most players sell shares in the WSOP Main Event

A $200 MTT grinder might want to take a shot at the $10,000 WSOP Main Event because it is the softest high stakes tournament of the year. They might not want to put $10,000 of their net worth on the line, so instead put $5,000 in themselves and sell the remaining $5,000 to a backer. If they win, they will still secure a very big payday, but if they lose they haven’t lost a whole $10,000. They can also play more comfortably at the tables knowing this. 

Sometimes a player has a long term backer who bankrolls their entire poker play. They will essentially provide them with a bankroll to play poker with and split the profits, usually 50/50. Sometimes these relationships also involve the backer coaching the other player.

If that player loses money for the backer, they are in ‘makeup’ which is the amount they are down by. If a player is $2,000 in makeup, and go on to win $4,000, they do not split the $4,000 equally. The backer first gets their $2,000 makeup amount back, then they split the extra $2,000 equally. Usually when a player is in makeup they are not allowed to get staked by somebody else or leave the deal, unless the backer agrees to it. In some cases the backer provides a ‘wage’ for the player while they are in makeup. 

Set clear rules to avoid disputes

GGPoker has in-client staking with markup

A more common form of staking is when somebody sells shares in an individual event or package of events. They might sell, for example, 20% of their action in the $10,000 WSOP Main Event. Another player can then purchase, say, 10% of that action for $1,000. If that player went on to win $40,000, the backer would win $4,000. If the player loses it was a one time deal and is free to play on without paying the backers back.

If the player is a professional they can sell shares at a premium, known as a markup. In the same example they might sell 10% of their $10,000 Main Event at a 1.2 markup. This means for someone to get 10%, they have to spend $1,200, not $1,000. Markup is a particularly touchy issue in poker as few players can agree what a fair markup is for a good player. 

A final form of staking is swap deals, which is where two players in the same event agree to give each other 5% of their action in the even. This is a way to reduce variance and also usually more of a fun casual deal to give the first player to bust someone to cheer on in the rest of the tournament. 

All of the above is a simplified overview of how staking works in poker. Staking allows the poker economy to run smoothly and is mostly good for the game, but disputes and issues often arise as a result of staking deals, usually when the two parties do not set clear rules for unexpected outlier events. 

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