Staking

Overview

Staking is a common practice in both live and online poker, allowing players to compete in events or cash games without risking their own bankroll. The staker provides the capital, while the stakee plays and shares a portion of the winnings. Losses are typically absorbed by the staker, though the stakee may owe future profits until the staker's initial investment is recovered (known as makeup).

Types of Staking

• Full staking: The staker covers 100% of the buy-in and expenses. Profits are split according to a pre-agreed ratio, often 50/50 or 60/40 in favor of the staker.
• Partial staking: The stakee also invests their own money, reducing the staker's risk. Profit shares are negotiated accordingly.
• Backing for a series or period: Common for tournament series (e.g., WSOP) or a set number of cash game sessions. The staker may also cover travel and accommodation.
• One-off staking: Single event, often arranged via staking platforms or private deals.

Key Terms

• Makeup: When a stakee loses, the loss is added to a makeup amount. Future winnings first go toward paying off makeup before profit is split. This protects the staker's initial investment.
• Markup: A premium added to a player's buy-in when selling action. For example, a player selling 50% action at 1.2 markup means backers pay 20% over the buy-in for a share of winnings, reflecting the player's expected edge.
• Horse: The player being staked.
• Backer: The person providing funds.
• Staking contract: A written agreement detailing terms, profit splits, makeup, markup, expenses, and duration.

Advantages and Disadvantages

For the stakee:

• Access to larger tournaments or higher stakes without personal bankroll risk.
• Ability to focus on playing without financial pressure.
• Potential to build a track record and attract future backing.

For the staker:

• Opportunity to profit from a skilled player's performance without playing themselves.
• Diversification across multiple players.

Risks:

• The stakee may underperform or engage in behavior that harms returns (e.g., playing tired, poor game selection).
• Disputes over splits or makeup calculations.
• Staking platforms or private deals can lack transparency.

Example Scenario

A staker agrees to back a player for a $10,000 tournament. The player sells 50% action at 1.2 markup, meaning backers pay $6,000 for 50% of winnings. If the player wins $100,000, the staker's share is 50% × $100,000 = $50,000, while the staker's profit is $44,000 after the initial investment. If the player loses, the staker loses the $6,000 investment (unless makeup applies in ongoing backing).

Staking in Modern Poker

Online platforms like StakeKings and YouStake facilitate staking for tournaments. Social media has also made it easier for players to sell action directly. However, legal considerations vary by jurisdiction. Many professional players use staking to manage bankroll variance and participate in events beyond their personal means.

Staking remains a vital part of the poker ecosystem, enabling talent to compete at the highest levels while allowing backers to invest in players' skills.