Poker Staking - The Ultimate Beginners Guide To How Online Poker Staking Works

Everything You Need To Know About Staking In The Poker World

Staking is an established part of the poker economy. As long as the game has existed players have been borrowing money off each other to get into different games or play higher stakes to which they normally do. Since the rise of internet poker has happened many staking operations have become far more professional and now ‘backers’ often support many players in a ‘stable’.

This guide is intended to show you everything you need to get you started staking others or being staked yourself. To begin with is an introduction on what staking actually entails and how deals are typically arranged. Then I look at why players would want to stake others or be staked themselves. The terms ‘make up’ and ‘mark up’ often get misunderstood and confused by new players, so these are addressed individually as they involve two different types of deal. Then if you are interested in getting staked or backing players yourself, I show you where you can do this online.

An Overview Of Staking – What Is Staking?

Staking is when one person (a backer) gives a player (a horse) money to play poker with. These are commonly found in tournament poker although cash game stakes do exist, especially for live games. Stakes can be an informal handshake agreement or one more detailed with terms laid out clearly in a contract. After the play has finished, if the horse is up the backer receives his stake back and profits are split. Traditionally this was a 50/50 split although as staking has progressed and taken variance into greater account, splits can be very wide ranging for each individual deal.

If the horse is down after they finish playing, things are less clear cut than a profitable split. It would be unfair for a backer to just request the funds get given back, as part of the deal the backer has to agree to take a risk - there would be very little point in the horse agreeing a deal if he had the funds to pay back immediately. Therefore two methods, which are covered further down, ‘make up’ and ‘mark up’ are used so that both parties have a degree of protection and know where they stand in the case of a loss.

An Overview Of Staking – Why Stake Or Get Staked?

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Why backers stake is a fairly straightforward concept – they believe a player is profitable and see it as an investment. Many staking groups even take players with limited proven ability, who they see as having potential, with the intention of developing them through coaching. This approach can produce some very profitable and loyal horses for a relatively low initial risk.

Why players look to get staked could be because of several different reasons, all depending on the individual. Commonly there are players without who believe they are good enough to compete at higher levels without the bankrolls to do so. This may be a fairly new player or one that has proven themselves at a high level before damaging their bankroll due to bad variance or bankroll management.

More reliable horses are those that regularly play high buy-in tournaments, especially live events where players cannot multi-table in order to level out the variance. These tend to seek out backing as they even though they believe they have an edge, they realise tournament variance is high and may not be able to see out the long-run by themselves. You will also find horses in this group that wish to reduce variance in their regular online games, especially those with outside bills and commitments.

The final group of players who seek backing usually do so with a coaching deal attached. These players normally do not have enough to pay for ongoing top quality coaching or wish to join a group that coach is attached to in order to accelerate their learning to progress them to higher stakes.

An Overview Of Staking – What Is Make Up

The terms ‘Make Up’ and ‘Mark Up’ can often get mixed up and confuse those new to staking despite being two completely different things.

Make-Up is essentially an IOU which can be reclaimed on future profits the horse makes for the backer. So say the horse and a backer has a 50/50 agreement with make up to play The Sunday Million and the horse loses the $215 on the first attempt. The next week they make the same agreement and the horse makes $1200. Out of these winnings the backer would first receive the $215 stake, then the $215 for the previous week’s loss before the remaining $770 is spilt 50/50 awarding the player $385. As you can see from this example the ‘stakeback’ and make up are both deducted prior to any profit chop occurring.

It may be apparent that if the horse is playing a lot of big or high variance tournaments this make up number can quickly get very large very quickly. Of course this can all be cancelled out by a big win, although until that point is reached a large make up figure can be stressful to both the horse and the backer. A good relationship is therefore needed between the backer and the horse as well as understanding of variance and willingness on the part of the horse to plug potential leaks.

Often in make up deals a horse will be unable to leave in make up, or it would be showing poor class to do so, which could well affect future staking chances with other parties. It is therefore normally possible for the horse to buy out of such a deal by purchasing their make up, normally at a reduced rate. The backer of course may walk away from their loss at any time should they choose to do so. By doing so they either give up on the make up, agree that it may be redeemed in the future or they may find they can sell the make up onto other backers, again usually at a reduced rate.

For short term or one off deals, backers and players may have no make up arrangements with higher cuts such as 75/25 or even 90/10, in the backers favour. These work in a similar way to make up deals, only if the horse loses the stake there is no way for that backer to recover it in the future.

Make Up works out best for all parties in medium or long-term, high volume deals, normally online. Here a profitable player can in theory last out variance and should be able to return a reasonable profit for both parties.

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An Overview Of Staking – What Is Mark Up

staking in poker explained‘Mark Up’ is a method commonly used in staking for live tournaments, or in situations where players are selling off pieces of their action to several backers. Mark up offers horses the chance to sell some or all of their action for a fee, which is based on how big they believe their edge is. With a mark up deal there are no losses carried over, instead the backer receives a higher cut of the winnings.

If someone was selling a $1000 package they may do so 1.1, they believe their ROI is at least 10% in the event. Backers can then purchase 1% for $11 and the whole package will be sold for $1100. The player will keep the $100 then if he profits these are then split amongst the backers according to whatever % they have purchased. So a backer paying for 10% of the player at $110 and would expect to receive 10% of the player’s funds relating to the stake.

It may be unwise here to deal with a player who has no percentage of himself and is only going to profit by the mark up raised. Backers need to believe the player has something worth playing for, so they play their ‘A-game’ and do not disappear after a big cash. Be careful when investing in mark up stakes, players often grossly overestimate their edge and offer far higher mark ups than is justified or some unscrupulous ones may oversell themselves.

An Overview Of Staking – How To Get Staked Yourself

You can get staked, or stake players in many different ways. The simplest example, like what has occurred in bricks and mortar casinos for years, would be friends helping each other get into different games. With online poker now, staking has become much more advanced.

You can now buy and sell shares on popular forums such as 2+2 or Pocket Fives, alternatively you can seek out specialist staking sites such as Parttimepoker.com or ChipMeUp.com. The advantage to using such as site is that they operate a blacklist of scammers and thieves, so this will provide you with some protection.

Finally you can seek out one of the staking stables online. These groups tend to stake a large number of players and provide ongoing coaching and a community to help their horses develop. You may find the majority of these groups are only interested in long-term deals and may include splitting a players rakeback or FPPs in the deal.

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An Overview Of Staking – In Summary

Staking or investing in player has become very popular in the poker world as backers realise they can increase their own profits by sharing in other. For a player this can give them opportunities they cannot afford on their own, or limits their own variance.

When entering into an agreement the terms and conditions must be clear between the two parties, including whether the deal will include make up or mark up. Finally there are a lot of places to get staked, be it through people you know, on forums or by joining a dedicated stable.

Just remember when embarking into the world of staking you will come across the odd person trying to make an easy buck at your expense. Like any agreement or investment you enter into, whether you are the backer or the horse, do your research first by finding out the history of who it is you are dealing with and ensure the terms are suitable to you before saying ‘yes’.

Staking Resources:

  • Part Time Poker: The biggest staking forum and information portal, worth a look whether you are looking for a stake yourself or looking for horses to back.

  • Pocket Fives Forums: There are staking boards within the biggest poker forum.

  • Team Moshman: SNG-focused stable, where the senior horses mentor new ones.

  • My SNG Course! If you'd like a solid background education before you ask for a stake, then my 'Sit N Go Blueprint' will plug those leaks and get you building that bankroll.

  • Loyalty Rewards Calculator: A widget here at SNG Planet which compares the loyalty rewards available at different poker sites for different combinations of games / volume. This is non-US at the moment, we have a US version in development.

 

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