In this topic, I will go to the basics of the main online poker sites, and how you can use these sites to conclude unprofitable staking agreements. If you think about making deals like investing in a business, a player who is good enough to charge a supplement is someone who is less risky as an investment, but a little more expensive. Poker staking explained Staking – also commonly referred to as backing – is a relatively simple concept. In basic terms, staking is an arrangement between a player and a staker in which the staker provides some or all of the player’s bankroll in exchange for some amount of the player’s winnings. The ‘Staking’ tab is found in the tournament lobby of all eligible events. After registering for a tournament, Sellers (players selling their action) must set the percentage of their action for sale as well as the mark-up that they are selling it for. You may value your action as you see fit.

In another article here on TopPokerSites.com, I talked about what staking is and how it’s beneficial for horses to be staked. What I didn’t mention though, is how to get started. So that’s what I’ll focus on now.

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Finding a backer isn’t difficult. It will coincide with how good you are though. Obviously the better you are, the more willing someone will be to invest in you.

There are a few ways that I know of to find potential backers. One way is by word of mouth. When I was looking for coaching/staking, I asked someone who was currently being staked who their coach/backer was. They passed my name along and shortly after I had an agreement in place, a bankroll and coaching.

Another method is to join a forum such as PartTimePoker or 2+2. Here you can create a thread asking for a backer, or you can apply to other ads where backing is being offered.

A third option is to visit a training site where they offer coaching and backing. They aren’t nearly as popular as the big training sites like DC and Bluefire, but the ones I know of, like SNG Mentors, have solid coaching and they offer backing to qualified students who need it.

Creating a Staking Deal

Creating a staking deal is something you don’t want to take lightly. It’s an agreement that will dictate how many games you need to play, your bankroll, how much money you can keep if you profit, whether you will owe money if you lose it and any coaching you will receive.

Online you’ll find that there are two different kinds of agreements; one that you make privately and one that is made online publicly.

Private Staking Deals

A private staking deal is made with an individual or group of individuals. You make an agreement on a number of things like:

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In the short span that I backed other players with my (old) business partner, I’ve learned a lot about what it takes to successfully run a winning stable and staking poker players long-term.

I’ve dealt with some winners, guys with potential and those that do nothing but waste your time and money. You won’t always avoid the losing deals, but there are things that you can do to reduce the risks you take with your money. I’m going to share a couple of my tips below.

Practice Solid Bankroll Management

It’s no different than playing poker. You need to have a solid bankroll management plan in place. It’s more than worrying about going busto though. If you don’t manage your money well, you might not have enough money to invest into other (winning) players or opportunities.

Unfortunately, I can’t give you an exact formula or amount you need in your bankroll. That said, I would suggest not getting into staking until you have a roll of about $500 or more. Otherwise you won’t be able to invest more than $20-ish into any one player.

Ok, so in terms of investing into individuals (not stables), what I was taught to do was invest in only 15-20 players. No more than this. The reason being is maintenance. The fewer players that you have money in, the fewer players you have to chase for funds, deal with record keeping and messages. Also, the fewer players that you are invested in, the more money you can spread between all your investments.

If you run a stable or will invest in a stable, the bankroll you will need will vary greatly. One thing that you need to keep in mind is that you need to keep enough money on hand to reload players that bust their bankrolls.

Research Your Horses

Investing in stocks, mutual funds or businesses without researching them first would be plain stupid, wouldn’t you agree? So why would you invest into poker players without looking them up first?

This is real simple to do. Take a look at their Sharkscope. But don’t just look at their overall profit and ROI. You should filter the stats down by the games you plan on staking them for. Look at how much money they’ve made and how many games they’ve played. Also be aware of the guys who are asking for lots of money or cuts heavily in their favor because they’ve won money, but all that money came from one big score.

In addition to profits, you want to do as much research as possible into the background of each player you back. This is less of a concern on short term stakes. But players you plan on staking long term, you want to see if you can get some recommendations or history. Are they trustworthy? Have they rolled (ran with money) other investors? Did they cause problems for other investors? These are all things you want to find out beforehand. It can save you a bankroll, not to mention a headache.

Have Written/Signed Agreements

If you’re doing a long term agreement I recommend having a written/signed contract in place. I’m not 100% sure what recourse you will have if the deal was to fall through, or if you were to be ripped of, but at the very least you’ll have the agreement for proof. The agreement also reminds both parties what the terms are.

Include anything and everything into this agreement. The number of games to be played, the cut, when the profits should be split, how much coaching there will be (if any) and how many games per day, week or month the player should play. I also suggest getting a driver’s license, phone number, address, etc if possible. That way if the horse runs, you can try to recoup your money.

Focus on Winning Players (Unless You’re Coaching)

A great way to increase your ROI is to focus on players with a proven track record. We dealt with too many players that showed potential only to find out that they were money sucks. Even a larger cut in your favor usually isn’t worth it, just because that’s money that can be used elsewhere (players that will actually make money).

The one exception is if you plan on coaching your players. However, that’s a very small exception, as we’ve taken on players that had potential and coached them, only to find out that they still sucked our money and time – some of them even rolled us.

My opinion is that you’ll be better off focusing on players who have a winning sample of a couple thousand games, and preferably that are up a few thousand dollars. You don’t have to give them that much of a better cut for being good, and you’ll find that a consistent income will more than make up for whatever smaller cut you end up with.

Keep Detailed Records

I’ve used this phrase more times than I can count, but it holds true here:

What gets measured, get’s managed.

In other words, if you keep track of how much you’re making, who you’re profitable horses are, how much you’re spending and your ROI each month, you can make adjustments to improve. In fact, keeping track of your records can simply be the difference between making money and losing it.

When dealing with a stable, you want to keep track of how often players split profits, how much money of yours they have, how many games they’re playing and how much coaching they get.

The more you know about your (side) business, the more optimizing you can do to squeeze the most profits out of it.

Keep the Long Run in Mind

For most intents and purposes, you want to invest with the long run in mind. Think of it like investing for retirement, except a little bit shorter. You could even think about it like playing poker (huh, isn’t that something?).

That means avoiding the short term investments like quick hitters, which is usually an investment into a player’s Sunday action or something short, like 200 games. The problem with these investments is that a Sunday lineup or 200 games is such a short sample. The player can run really good, break even or bad and it won’t be out of the norm at all. The more games you can get action for, the better off you’ll be.

Sample Poker Staking Agreement

My recommendation is at least 1,000 or 2,000 games. Shorter can be OK if you’re doing multiple investments and they don’t take up the majority of your money. Shorter investments should also yield higher cuts in your favor (in most cases).

Take the Makeup Option

Poker Staking Agreements

You should always take or include the makeup option in your investments. What this means for you is that if the player loses your money, they will need to pay you back before they can make money of your investment in the future. In the case of individual investments, this means you’ll need to invest in the player again in the future to make your money back. In the case of a stable, you’ll have to reload the player so that they can try to win your money back.

One word of caution – if you have a stable with players who take more reloads (and go into makeup) more often then they make you a profit, you might be better off in the long run just cutting them. I’ve found that if a player continues to play and is always in debt that they will become frustrated (keep in mind that some of these players play to make money for bills and food) and in my experience they might roll. You can easily get $500, $1,000 or $2,000 or more invested into an individual, just to lose it if they decide they’ve had enough.

The only time that you might not want to take the makeup option is if you invest into higher risk players (individuals, not a stable). Since you have to invest into them again to make your money back, it might be in your best interest to take a higher no makeup cut and invest the lower end of your (bankroll) range into them.

Becoming a Profitable Investor

Poker Staking Agreement

Keep in mind that becoming a profitable investor takes time and money. You should definitely expect to take a loss in the beginning while you learn the ropes. But as time goes on, you’ll gain experience in knowing what to look for in a player and how much to invest. Knocking back steady profits at that point shouldn’t be a problem then – hopefully these tips get you there faster.