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Staking Primer.

Posted by Vinay Suchede on 2012-10-19 at 12:00 AM

I just had a discussion with one of my friends who will be getting backed to play the upcoming PGT – October series (and thus the early blog this week before I forget). The backer and my player friend were a bit confused on the terms and how to go about it. This was the same dilemma which myself and my ex-backer had faced.

I had then developed an excel sheet to keep track of account. Though I now play on my own dime, I have refined it slightly and attaching it herewith for people looking to get into staking agreements. This is for make-up type deals for ring games as well as tournaments. See end of blog for the ZIP file.

With more and more people playing poker and as the game gets popular, there will be lots of people getting into deals or into buying/selling action and I think the time is right to put out a general blog on how the thing works. It is also important for people getting into arrangements to put at best the different scenarios that may come up during the term of the deal. This avoids mis-understandings and un-necessary souring of relationships.

There is basically only one type of deal. The one’s with make-up. There are some deals which have expiring make-up which are more for cash games.

The deals with expiring make-up consist of the player playing certain set number of hours or set number of hands like 100K hands online. Any loss at 100K hand mark is absorbed by the backer. Any upside is split between the backer and player as per pre-agreed split ratios. The deal is then reset. The split ratios can be anything here depending on the skill of the player.

The deals for MTT’s and many cash games usually consist of non-expiring makeup. These deals are usually for 50-50 splits. The account is settled at usually end of a tournament series or monthly or weekly as per the pre-decided term period. The backer pays the player’s buy-ins. If the player has lost money over the period i.e. his winnings don’t cover the buy-ins, the lost money is rolled over to the next period/term. This is known as make-up. The losses keep adding to the make-up. Whenever the player wins or cashes above his makeup figure, a cash-out takes place. The cash-out is ‘player wins’ minus ‘the make-up’. That cash-out is then split into 50-50% between the player and the backer. The excel sheet attached has a good example for both cash and ring games.

Before getting into this deal, it is important to clearly state a few terms into the contract. One is the average buy-in with the high and low figures. It is important to keep the difference between high and low to as little as possible. Consider the scenario where a player plays a lot of high-buyin games, goes deep into make-up and then backer says he will reduce the high buy-ins and now asks the player to play more of low buy-ins or low buy-ins only. This way he will never get out of make-up, his/her incentive to play will go and ultimately the deal will go sour.

A player will not be able to get out of the deal unless he is out of make-up. The only way to get out of the deal is to pay 100% make-up to the backer or till the backer stops supporting him. Thus it is very important to put these buy-in figures in place. If backer is not able to support agreed ABI (avg buy in), the deal goes defunct.

Also with regards to support, many times backer’s may be out of funds and may not be able to support the player. Usually this it-self should cause the contract to go defunct but it is better to put in a mutually agreed grace period for such exigencies beyond which it will be player’s prerogative to exercise termination of contract.

For players, always better to go for backers who are adequately rolled up and have understanding of game variance. For best of both worlds, go for backers who are themselves winning players and willing to coach you and review your game from time to time.

Players can also get into short term deals with backers who are not adequately rolled up, but want to take a punt. This is what I advised my friend to get into. These have no make-up. The backer buys 100% action of the player for a set of tournaments with stake-back. Stake-back means cash out to player at agreed splits only happens if the player’s winnings go over the total buy-ins for those set of tournaments. The splits here are again dependant on player skills and how +EV the player is in that field. It could be anything from 20-80 in backers favour to 50-50.

Backers can also buy pieces of many different players. Already there is some good action available to buy for the PGT –October series in the Market Place forum.


Some are available at mark-up and some are available at evens. Mark-up is a premium you pay for buying action into a player who has positive expectation. (For e.g. you can get Danish or Sushant’s 10% action in 66K PGT High Roller for 8K, whereas you can get Mukesh Jethwani’s action at no premium). These are usually dependent on player’s ROI (returns on investment). A player with 40% ROI can easily charge 20% or 1.2 mark-up for similar field tournament. Buyer is still in +ve territory.

It is however important to use open forums for buying/selling action like the Market Place. These provide deterrence to any sort of swindle. If you buy action, post it in the thread. Sellers should keep updating on how much is sold and how much is being sold. A very doable scam is when a player sells 100% of his action at mark-up and will then bust the tournament to pocket the premium. There are also stories of players mistakenly sold more than 100% and suddenly realizing they have to bust outside the money in the tournament to avoid paying out of their pocket.

Buying action from regular +EV sellers can be profitable and exciting fun. Same is true for backing players. Just take the necessary precautions and spell out the terms in as detailed manner as possible.

Till next week then..

Cheers !!

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Vinay Suchede

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