All About Staking
It's no secret that a very large number of poker players are staked,
or "backed", by other well-bankrolled players. This is especially the
case in major live tournaments, where the capital needed to hang
around on the scene is very large due to the hefty buy-ins and brutal
variance. In the live tournament scene, players can have years of
losing before it's all erased by a seven-figure score. online poker
468x60 Staking is less common in the world of cash games except in the
high-stakes action. Players are not usually flat-out staked all the
way in high stakes cash games; what's more common is that they sell
pieces of their action to other players. For example, one player could
buy 20% of another player's action in a huge cash game meaning they
must repay 20% of losses or collect 20% of any profit. Of course, it
is important to trust the player being staked as they are in a
position to set up a profitable arbitrage (ie: sell-off 120% of their
action and then purposefully lose). Staking is unbelievably common in
poker. Without it, there would be much less action in the game similar
to the way that there would be much less development in the business
world if taking on debt were not possible. On a personal anecdote, two
years ago in the WSOP Main Event, a player who was backing me had 50%
of my action and only 27% of his own action. We thought it was pretty
ironic that he stood to benefit more from me winning than himself
winning. Because of staking arrangements, that type of scenario is not
rare in poker. How to Stake Someone Almost all long-term staking
arrangements involve what is referred to as "make-up". This means that
the losses of the player being staked are carried over, or must be
"made-up" before they can collect any profit. Suppose a player is
staked for two $10,000 buy-in tournaments. They wash-out of one and
win $20,000 in the other. With make-up, the player simply broke even
and therefore collects no profit. Without make-up, the player would
receive $5,000 (half the profit from the successful tournament)
leaving the backer in the hole for $5,000 despite his player having
broken even. As you can see, make-up is an imperative component to any
sensible staking arrangement. Most staking deals state that the player
can only leave the arrangement in one of three ways: a.) if they are
in the black (ie: up), b.) if the backer ends the relationship, or c.)
if the player refunds the backer for any losses. This protects the
backer from having their player stick them with a loss in the event of
receiving an inheritance or something. So if a player is down $50,000
and receives $1M from their dead Grandma, they would have to give
their backer $50,000 in order to be free to play on their own dime.
Bax and Sheets: Kings of the Staking World Two players notorious for
staking other players are Cliff "johnnybax" Josephy and Eric "sheets"
Haber. Bax and sheets effectively run a staking corporation. At any
given point, they fund the poker careers of between 30-100 broke
degenerates. From my observations, they run a very tight ship. In live
tournaments, players are required to call and leave a message staking
their chip count during each break. This requirement is likely the
product of wanting to ensure that they are not being scammed for
thousands of dollars by players who they do not have a very close
personal relationship with. Staking players has turned into a full
time job for these two players who earned their wealth through careers
in the finance industry. On any given weeknight, they might have as
much as $100,000 in play through their "horses" in online tournaments.
On Sundays, that number might be as high as $250,000. In live
tournaments, particularly during the WSOP, they are in a position to
endure a million dollar swing over the course of the series. This
staking empire has spawned a new term in the poker world: when sharing
details of their financiers, horses of this duo simply say they are
"baxxed". Other players known for financing the careers of their peers
are: Phil Ivey, Erick Lindgren, Haralabos Voulgaris, Steve-Paul
Ambrose and Mike McDonald (joint venture), and James "mig.com" Mackey.
Significant Scores through Staking Players landing a major,
seven-figure payday under the financing of a backer is incredibly
common. It's possible that more than half of the winners on the WPT
were backed by another player. Here are a few examples of major
paydays in which this was the case: - Jimmy "gobboboy" Fricke's 2nd
place finish in the 2007 Aussie Millions for $800,000 (sold 70% of his
action to a conglomerate of players) - Tuan Le's win in the WPT
Championship for $2.8 million (backed by 3rd place finisher Hasan
Habib; controversy arose on suspicion that they were soft-playing each
other) - Ivan Demidov's 2nd place finish in the 2008 WSOP Main Event
for $5.8 million (backed by wealthy Russian guy who maintains a large
stable of poker players) - David Chiu in last year's WPT Championship
for $3.3 million (backed by Daniel Negreanu) - Carter "ckingusc"
King's win for $1.7 million in last year's WCOOP Main Event (baxxed)