Wednesday, June 04, 2008

On Staking and Backing

Pauly mentioned this excellent staking thread on 2+2 and that has gotten me on the topic of staking and backing.

As you probably know, I was backed for the first few months of this year in $6/12 and $8/16 limit hold'em at the local casinos. Actually, it wasn't really a backing arrangement, it was more of him taking a piece of my action. Our deal was basic -- he puts in 50% of the cash, and takes 50% of any win or loss.

In a way, this deal was non-standard and screwed me a bit, since the 'standard' deal is the backer puts in 100% of the cash and takes 50-60% of the profit, assuming I make up any losses before I pocket any profit. The important thing was: we suspected I'd be profitable, but no one, especially me, was confident that I would. Plus, not having to worry about make up gave me a nice exit strategy (if I decided LHE wasn't for me, I didn't want to stick him with a big loss).

In the end, I spent 3 months with the deal in $6/12 (and 3/6) and earned my backer $562. Then, for April, we did a one-month deal where only my 8/16 was part of the deal, and I lost him $204. The deal pretty much worked out well for both of us; I turned 6/12 into a 3/6 game so I could afford it, and he made almost $400 by giving me about $500 in cash.

Would I do it again?

I'd prefer not to, but in certain cases (larger tournaments) I feel that my ability outdistances my bankroll. For cash games, though, I don't think that is the case. My cash game wheelhouse based on my BR is $6/12 and $100NL, and that's where I think I should stay for a while. And, of course, if my bankroll dropped too low for $6/12, I'd consider it. Honestly, though, I'd rather keep my +EV for myself whenever possible :)

As for staking other players... well, let's just say I'm not exactly rolling in money right now so it isn't an option. Well, let me restate that; I'd have no trouble staking someone pocket change ($20) if I trusted them.

In the future, if I had a ton of left-over money, I might consider it, but not for large amounts (more than around $1K) unless I suddenly became rich. There's just too many ways for the deal to turn out bad and/or add stress to my life.

The absurd thing is that this 18yo guy, Timex, is staking players and getting down $100K+ to other players. I'd bet that he probably has a million or two tied up in staking arrangements... What the hell kind of parents let a kid loan out that kind of money, even if he did make it gambling online at 16?

Staking arrangements do explain why I see so many players in monster events (like Poker After Dark or $100K tournaments) who don't seem like they should be able to afford the event.

BTW, this post isn't an invitation to ask me to stake you. Not even $5 online. Find someone else...

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