Backing

Overview

Backing is a common cooperative model in the poker industry. The backer provides the buy-in funds needed for tournaments or cash games to a player (the backed player, known as the Horse), and the player distributes a predetermined percentage of their winnings to the backer. If losses occur, they are typically borne by the backer, but may be deducted from the player's future winnings (the Makeup mechanism).

Common Agreement Structures

• Profit and Loss Distribution: The most common split is 50/50, with profits divided equally. Some agreements adjust the ratio based on factors such as financial risk or the player's skill level—for example, the backer may receive 60% of the winnings.
• Makeup (Loss Recovery): In many backing agreements, if the player incurs a loss, that amount is accumulated against future winnings. The player must first repay the accumulated losses (i.e., makeup) before they can start receiving a share of profits. This mechanism protects the backer's interests.
• Exit Terms: Agreements typically specify how the partnership can be terminated, such as notice periods, settlement conditions, etc.

Advantages and Risks

• For the Player: No need to provide own funds to enter higher buy-in events, offering a chance for greater winnings; however, the player must give up a portion of future profits and may incur debt (if in makeup).
• For the Backer: Invest in another's skill to earn returns, but face risks such as player losses or dishonesty. Backers therefore usually choose only trusted and highly skilled players.

Industry Practices

Backing is common in both online and live poker, especially in tournaments. Many well-known professional poker players received backing early in their careers. Agreements are typically formalized in written contracts specifying profit sharing, makeup methods, fund usage restrictions, and other terms.

Differences

Backing differs from ordinary loans: the backer shares in profits rather than earning fixed interest and generally bears the risk of losses; the player, although not advancing funds, must provide labor (playing) and share the results.