EPT9 Grand Final Super High Roller: Stake and chips
You might think that €100,000 for a poker tournament is an extravagance too far. And, if so, you wouldn't be alone. At least half of the players in today's field (currently at 37 and counting) would not dream of putting up €100,000 of their own money for a single tournament. And yet there they are, gnawing away.
The reason all of them can play -- and play optimally at that -- is that the current crop of high rolling poker superstars is remarkably smart. There is so much variance in the tournament game that most of them are employed pretty much permanently in the attempt to reduce variance to its bare minimum, both in terms of their play at the tables and their arrangements off of them.
Players these days often make staking arrangements with one another, either swapping percentages of their actions in these tournaments, or selling small pieces of themselves. It means often that players go into tournaments with what amounts to a consortium behind them. There amass their buy in from several others, and then pay out any winnings proportionately.
Isaac Haxton of Team PokerStars Online took some time during a break in this €100,000 Super High Roller event to explain how staking works.
PokerStars Blog: What do poker players mean when they talk about "staking"?
Isaac Haxton: There are fundamentally two ways that staking can work. There are long-term deals and there are deals for individual events.
The individual events are simpler to explain. A backer buys shares in the player for that tournament, maybe at face value, maybe at a mark-up. So say it's a $100 tournament, somebody wants to buy a piece of me, they want to buy 10 per cent, maybe they pay ten dollars for that. Maybe they think I have a big edge in the tournament, so I'm going to sell a 1.2 mark up, so they pay $12 for 10 per cent of me.
Especially for high buy in tournaments, stuff like this (the €100,000 Super High Roller), very often that's what players are doing. A lot of the players in the field will have several different investors who will have bought anywhere from a couple of per cent to 40 or 50 per cent of them in something like this.
The other way staking deals can work are long-term staking deals, where a backer or backers put up all of a player's buy ins and then, after a certain time-period has elapsed, or after a player has made a certain amount of profit, or whatever other conditions you agree on for when the deal terminates, if the player has lost money, all of the losses are the backer's responsibility. If the player has made money, the profits are divided between the back and the player.
Why would a player who has an edge take a staking deal?
Because there's a lot of variance in a tournament. In any individual tournament, you're going to cash somewhere between 10 or 20 per cent of the time depending on what the payouts are. Even if you're better than all the other players in the field, you're not going to cash more than twice as often as average, probably not even one and a half times as average. So it's very easy to go on long downswings playing tournaments. If you're risking more than 100th of your bankroll on a tournament buy in, you're a pretty big favourite to go broke.
How many people do it? What percentage of this field are staked in some way?
Certainly more than half. Swapping percentages are very common too. It's kind of the same as selling action only instead of me paying you $10,000 for ten percent of you, I pay you ten percent of me.
Is this honour-based, or do you draw up contracts?
It's really all done on a handshake basis. I've written up a contract for stuff like this exactly once and he was exactly the only person who ever ended up robbing me. I had a bad feeling about it in the first place that maybe this isn't somebody I knew well enough to do business with, so I wrote up a contract and he stole $7,000 from me. It wasn't worth going to court over. In general it's done on an honour basis.
What other hazards are there?
It's easier to be confident in yourself than in anybody else. It's hard to know for sure how good another player is. I guess it's hard to know how good you are also. Occasionally people buy action in a player and end up regretting it, end up thinking that guy wasn't as good as they originally thought.
Occasionally there are issues with people not paying or somebody either accidentally or deliberately selling more than 100 per cent of their action. If it's on purpose, then they lose on purpose, or if it's by accident, winning and finding themselves owing more than they had. I think a guy who won an EPT had sold more than 100 per cent of himself. He ended up being very honest and up front about it and saying, "Yeah, I made a mistake. I have too much action out." He was left in some debt, but made good on it. I think he's ended up paying everybody back now.
Do backers have a say in things like re-buys or deals?
Typically if you are planning on re-buying in something like this, you will include that in the discussion with the staker in advance.
People often make deals late in the tournament and a staker would potentially have a say in that. But more often than not it's understood that it's up to the player to handle that and that the staker is trusting the player to play that aspect of the tournament in the same way that he trusts the player to play the hands well. But sometimes maybe you would run a deal past somebody who had a big piece of you before you made it.
Don't forget, you can read hand-by-hand action from the tournament floor on the main Super High Roller page from this, the PokerStars and Monte-Carlo® Casino European Poker Tour Grand Final. And there's some bang tidy action going on on EPT Live too. Or follow us on Twitter, if that's your bag. We're @pokerstarsblog.