This article is going to limit discussion to typical backing deals and not go into the more complex ones that can take place. Typically, a person will provide the tournament buy in for a player in return for a set percentage of the winnings (usually 50%) after the entry fee has been returned.
So for example, if you decided to back your buddy into the World Series of Poker and he won five million, he would return the entry fee and you would get half of the profit. Sweet! You’re an instant millionaire! However, if your buddy finished out of the money, you would get nothing in return. You’d be out the whole ten thousand. Not such a good deal there.
There are obvious risks and rewards associated with backing arrangements. The most obvious is what was discussed in the previous paragraph. If your “horse” wins money, you make money. That is the reward. If your “dog” loses money, you get nothing in return. That is the risk. These, however, are not the only issues that can arise.
Complications with taxes, understanding of the agreement that was reached (see Jamie Gold and Crispin Leyser), not receiving payment for your share of the winnings (or underpayment) are just a few of the problems that could arise. If you are going to stake someone it is important that you and the player you are backing are in complete agreement as to the terms of the arrangement. In fact, it is advisable to put the agreement in writing so you have something to fall back on if questions arise later.
The biggest problem with backing itself is that most players that require financial assistance aren’t good enough players or have other problems to deal with in the first place. If they were a great player or handled their money responsibly, why would they need someone to help them? There are some exceptions to the rule.
You could know a great low to mid-limit player who is looking to make the jump up to a big tournament or cash game but the buy in is too much of his bankroll. You could also be dealing with a great player who has gone through one of those inevitable bad runs of a lifetime where they played great for 6 months but could not win anything. Each case will vary but it is important that you understand first why the player is asking for the assistance. If it is because they just need the money, than it’s probably not a good idea.
Even great players have problems that must be investigated before deciding whether to back them. They could have a gambling problem, a drug problem, or some other issue that is causing them financial difficulty. Or they could just want to take advantage of their status as a great player and not have to risk their own money. This is a common occurrence on the poker circuit. It is not uncommon to see great players who had been backed by another player playing in a tournament. They were playing reckless and with great abandon. They didn’t care if they lost. If they did they would just go find some other sucker to back them or buy themselves in (in which case they’d actually probably try hard).
Another area of concern is staking friends. It is hard for people to say no to friends, especially ones they consider to be close. This type of backing is the most common type of agreement that gets made and it has probably ruined more friendships than it has made. Why?
Because when money is involved, people often make irrational decisions or become emotionally involved to the point where lines are crossed. It’s fine to help out a friend, but make sure when you are doing so that you are doing it for the right reasons and that like above, you make sure both sides understand what the agreement consists of. There’s nothing worse than hitting a big score and having it ruined by a fight between friends over who gets what.
When should you as a player want to seek out financial assistance? If you are confident enough in your abilities and have the bankroll, then the answer to that question is obvious… never. Why would you want to give someone half of your winnings when you know the probability of you winning is higher than losing?
Usually if you are an above average player you should not want to be backed. As mentioned above, however, there are a few exceptions. If you are a very good low limit player and want to make a run at a big game but don’t have the bank to do it, seeking out a partner to spread out the risk is probably a good decision.
Let’s say you’ve been playing $1/$2 NLHE cash games for about a year and have turned your bankroll from $500 to $50,000. You know you’re ready for the 50/100 game but you don’t want to risk your entire bankroll. Finding a partner to put up half your buy in could limit your risk and allow you to play your best game since you won’t be as worried about the financial consequences.
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