The Bank of Timex
One of our favorites in the poker world since first encountering him in 2008 has been Mike 'timex' McDonald. We interviewed him when he was still a braces-wearing millionaire teenager. Any fan or friend of Mike (we are certainly the former and like to think a little bit the latter) around from when he was crushing online games and live tournaments for ridiculous piles of money as a kid from Canada has watched with appreciation at how he's been Doing It Right ever since. Mike's braces and boyish build are gone. Now he gets all the girls, drives a Lambo, and continues to reel in the dollars in the poker world. You'd have to hate him if he wasn't such a nice guy.
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Mike has made a lot of money in poker both playing it as well as doing a pretty good job of being in the right place at the right time when people seem to run good (not a surprise, the only year he's ever had any percentage of my WSOP Main Event action, I had my best-ever result, 133rd for $55,000; the 5% of that which was went to Mike's bottom line probably only barely went noticed).
Now, Mike has conjured a new way to capture money circulating in poker: instead of backing people, he's betting against them.
The Bank of Timex - How it Works
Yesterday, Mike started a Twitter account dubbed BankOfTimex which already has 1,200 followers. Why so much interest already? Because people are going to want to see how this experiment goes down.
Mike's scheme is to sell action to poker backers (and gamblers) otherwise prone to investing in a player at below market value. His aim is to make lots of bets against pretty much the entirety of the poker world. For Mike, the bidding starts at the top of the pyramid: Phil Ivey. If you want to back Phil Ivey's action in a poker tournament, Mike will be charging a premium so large that Ivey would need a 100% ROI or better (depending on the event) in order for your investment to be profitable.
Just below the Ivey threshold at slightly lower markup levels are two others, Isaac Haxton and Scott Seiver. For most others, the deals just keep getting better and better.
I asked Mike at what rate could I buy my own action in the WSOP Main Event. He tossed out a mark-up of 1.5 meaning I would need to expect to have a 50% ROI in the event or higher in order to justify taking that bet. Mike is willing to bet that I do not. If I took Mike's bet for $1,000 and won $8,000,000 in the Main Event, he would owe me a cool $530k. You could say the guy likes to gamble.
The Bank of Timex even has an affiliate program too: anyone who directs Mike to a client that books a bid against him will receive 0.5% of any proceeds from that bet.
Breaking Down the Bank
As you can imagine, the Bank of Timex is already a villain figure in poker. Poker pro Ari Engel tweeted, "[the Bank of Timex] is bad for poker industry. Instead of sub-par players being put into tourns, timex takes piles of equity out of poker world." Indeed, Mike shouldn't expect to make a ton of friends from his latest venture, but Engel is on the wrong side of history with his stance.
The reason we love Mike's big gamble is that it's inevitable. All he is doing is making a market more efficient. Efficient markets are a good thing. Mike's gamble essentially boils down to a belief that there are plenty of people paying way too much for action in live poker tournaments. Why pay so much when you can pay less through Mike?
If Mike were being blunt, one would suspect that he essentially thinks everyone in poker is overrated. The edge isn't as big as poker backers think it is. Sure, I might be good enough at poker that you can expect me to have an edge in the WSOP Main Event. But you shouldn't pay $10,000 to have 50% of my action. Mike will give it to you for $7,500.
How will this play out? Will one of poker's biggest success stories keep scooping up all the money? Or will that Lambo be needed to pay off a big bet gone bad? History would say the former. But as Mike knows, in gambling, nothing is guaranteed.