Luke Haward joins us for a discussion all about staking in poker. When a player is staked, their buy-ins are provided by a backer, often for a 50/50 split of profits, or some other agreed-upon revenue share. In return, the player who is staked offloads the risk of losing, gets access to a big bankroll, plus they get coaching and oversight that brings out the best in their game. Staking has steadily grown in popularity and Haward is here to break it down.
What is Staking in Poker?
There are a lot of forms of staking. Haward thinks mostly about long-term staking situations, where a player has a backer who stakes them as well as other players. The backer sets up a deal by which they split your profits 50/50 (or some other revenue split). There are usually terms that dictate the player not being able to leave the deal until they are profitable, unless the backer chooses to cut ties. Staking is not a loan, so if the backer cuts ties, no money is owed by the player. Staking is a business relationship. both parties must be scrupulous and make sure they understand the terms of the deal before signing it. But most of the time, the player is obligated to play until they show a profit.
Haward started studying poker in 2010, and got better rapidly by studying and discussing hands in forums and Skype groups. Eventually, a backer offered to stake him for a few games. He was already on the road to being a solid MTT grinder, at least by 2010 standards. Then he was offered a full stake, and from then on he’s played staked on an off. He even played for Fedor Holz when he ran a stable (which is now pretty much wrapped up). Haward was lucky enough to get coaching from Holz. Currently, he is staked by a high stakes cash player, in addition to running a stable of his own, a Spin-and-Go stable called Evolve Staking.
Pros and Cons of Staking
The main con of staking is that, as a player, you pass up 50% of your profit margin (typically). The pros have to be pretty good to outweigh that, and most times they are. Haward reminds us that players who are able to grind their bankroll up to the high stakes on their own deserve lots of credit and respect. However, for many players, ascending to the high stakes and assuming all of the risk that comes with those big swings is often too much, and they’d rather exchange profit for peace of mind, zero financial risk, top-notch coaching and access to bigger games than their bankroll allows. These are the pros of staking, and many a player has found them to outweigh the cons.
As a bonus, most staking opportunities are surrounded by communities of fantastic, winning poker players. And listeners of this podcast will know that being a part of such a community is a key aspect to becoming the biggest winner at your level.
Selling action is similar but no the same as staking, and has become considerably more popular with the advent of online marketplaces where any player can set up a profile to sell action to any event. Selling action is usually one-off staking, so to speak. The player sells a certain percentage of their action, and in return, the backer gets that percentage of profits back, plus markup.
Recreational or new players will not likely be able to charge any markup. But for more advanced players with proven track records of success, markups as high as 100% have been asked for. Haward is skeptical of such large markups, but says it’s standard practice, for example, for a player who can prove a 20% ROI over a long stretch of games to get, for example, a 10% markup.
Staking and Trust
Unsurprisingly, trust is very important in staking. Reputation is everything. Online marketplaces for staking and selling action facilitate this trust by having a system to verify trust in certain ways. But outside of selling action online, real-world staking by stables and other professional backers requires a high degree of trust in the player’s results and reputation.
There is a very small minority of cheaters in the staking world, and they get outed very quickly and permanantely. For example, when an unscrupulous player binks the Sunday million and keeps all the profit, it’s a hit and run kind of thing. They will never be staked again. Backers and players both must put in due dillingence, conduct interviews and research, and each should get a good feel for the kind of person the other is. Moving forward in a respectful, reliable relationship is par for the course, but at the same time, it is a high-risk industry for the backers.
What are Backers Looking For?
Believe it or not, you can be a relative novice in a game as long as you show serious commitment to getting better, putting in volume, and a love of poker and the basic skills to progress. Honesty, reliability and hunger for success are in a way more important than skill level, because stables like Haward’s will supply mental game coaching as well as strategy coaching for rapid improvement. Stables like his are looking for players who will happily commit to 40-50 hours per week of playing plus study. Zero experience is hard to build trust off of — you need to have demonstrated some experience and aptitude. But you need less experience than one might assume.
Haward cautions that players should not just jump at any opportunity to be staked. Asking around, getting references, and doing research on backers is essential to avoiding a commitment to an organization that will not be reliable in their funding or support.
Since many poker players develop first as lone wolves, and then anonymously online in small niche communities, references are not as important as one might assume for backers to have on players. Nonetheless, they do factor in, and even jobs other than poker can provide critical references to build the kind of trust necessary for a backer to invest in a player.
The staking agreement is executed as everything from a handshake to a written contract. It’s good to have a real contract to cover all bases, of course.