Poker Staking and Backing

What is Poker Staking?

Poker staking is a financial arrangement where an investor (called a "backer" or "stable") provides the capital for a skilled player to compete in poker tournaments or cash games. In exchange, the backer receives a percentage of any profits the player generates. This business model allows talented players to compete at higher stakes than their bankroll would permit while giving investors exposure to poker's potential returns.

According to research published by The Journal of Economic Behavior & Organization, staking arrangements have become a fundamental part of professional poker economics. The high variance inherent in poker—even winning players experience significant swings—makes bankroll requirements prohibitive for many skilled players. Staking bridges this gap by providing capital access while distributing risk across multiple investors or a single well-capitalized backer.

The practice has existed since poker's early days but became institutionalized with the poker boom of the 2000s. Today, staking is ubiquitous at all levels from small online tournaments to the World Series of Poker Main Event, where many final tablists compete with backing arrangements. Understanding staking is essential for any player considering playing professionally or anyone interested in poker as an investment opportunity.

Types of Staking Arrangements

Full Staking

In a full staking arrangement, the backer provides 100% of the buy-ins and assumes all financial risk. The player contributes their time, skill, and effort. Profits are split according to agreed terms—typically 50/50 for unproven players or 60/40 to 70/30 in favor of the player for established winners. Full staking is common for players who lack personal bankroll but have demonstrable skill.

Partial Staking (Co-Investment)

Some arrangements involve the player purchasing a portion of their own action. A player might be "70% staked" meaning the backer covers 70% of buy-ins and receives 70% of profits, while the player covers 30% and keeps 30% of profits independently. This structure aligns incentives more closely and demonstrates player confidence in their edge.

Selling Action

Rather than formal staking relationships, players can sell percentages of individual tournaments. Before a $10,000 event, a player might sell 50% of their action to various investors, keeping 50% for themselves. This is typically done at markup (premium above face value), rewarding the player's skill edge. Selling action is popular for one-off high-stakes events. Proper bankroll management principles still apply when deciding how much personal action to keep.

Stable Arrangements

A "stable" is a group of players backed by the same individual or organization. Stables often provide coaching, database access, strategy support, and community alongside capital. Players typically receive worse profit splits than independent backing but gain valuable development resources. Many successful professionals started in stables before going independent.

Cash Game Backing

While less common than tournament staking, cash game backing involves a backer bankrolling a player's cash game sessions. These arrangements require more trust due to less verifiable results—tournaments have clear entry fees and payouts, while cash game wins can be harder to confirm. Cash game backing typically involves daily session reporting and longer evaluation periods.

Understanding Markup

What is Markup?

Markup is the premium charged above face value when selling tournament action. If a $10,000 buy-in event is sold at 1.2 markup, investors pay $12,000 for $10,000 worth of action (a 20% premium). The extra $2,000 represents compensation for the player's edge—their expected positive return that makes the investment worthwhile.

How Markup Works

Consider a player selling 50% of a $5,000 tournament at 1.3 markup:

• Face value of 50%: $2,500 (half of $5,000 buy-in)
• Markup price: $2,500 × 1.3 = $3,250
• If player cashes $20,000: Investors receive 50% = $10,000, netting $6,750 profit on $3,250 investment
• If player loses: Investors lose their $3,250; player loses their 50% ($2,500) plus keeps zero from sold action

Fair Markup Levels

Markup should reflect expected ROI. A player with 30% average tournament ROI might reasonably charge 1.20-1.30 markup, as investors still receive positive expected value. Excessively high markup relative to actual edge is considered unethical in the poker community and damages reputation.

The Markup Controversy

Markup remains controversial. Critics argue it's difficult for investors to accurately assess a player's true edge, leading to information asymmetry exploitation. The PokerNews community has extensively debated fair markup standards. The general consensus: markup should never exceed reasonable estimates of expected ROI, and players should be transparent about their historical results.

Understanding Makeup

What is Makeup?

Makeup (sometimes called "make-up" or "MU") is accumulated losses that must be recovered before profit sharing begins. In a staking arrangement with makeup, if the backer invests $50,000 over a period and the player loses $20,000, the player carries -$20,000 makeup. Future profits first eliminate this makeup debt before any split occurs.

Makeup Example

Consider a 50/50 staking deal with makeup:

• Month 1: Player loses $15,000 → Makeup: -$15,000
• Month 2: Player wins $10,000 → Makeup: -$5,000 (no profit split yet)
• Month 3: Player wins $25,000 → Makeup cleared, $20,000 profit to split → Backer gets $10,000, player gets $10,000

Without makeup, each period would be independent—Month 3's $25,000 win would split $12,500 each regardless of prior losses. Makeup protects backers from players who cherry-pick winning periods.

Makeup-Free Deals

Some arrangements operate without makeup, typically with worse player splits (40% instead of 50%) or shorter evaluation periods. Makeup-free deals favor players during downswings but limit upside during heaters. They're more common for established professionals who can negotiate better terms or players who prefer freedom to exit arrangements without debt.

Makeup Caps

Extended downswings can create crushing makeup burdens. A player with $100,000 makeup might need a year of winning just to reach profit-sharing territory. Many modern arrangements include makeup caps—maximum makeup amounts (often 1-3x monthly buy-in totals) beyond which accumulated losses are forgiven. This prevents unrealistic debt situations that incentivize players to quit.

Variance and Makeup Reality

Understanding poker variance is crucial for makeup arrangements. Tournament poker especially has extreme variance—even elite players experience lengthy losing stretches. Our variance simulator demonstrates that 20-30 buy-in downswings are statistically common. Players must psychologically prepare for potentially long makeup periods, and backers must have sufficient bankroll to weather variance.

Staking Contracts and Agreements

Essential Contract Elements

Formal staking agreements should address:

• Profit split percentage: How winnings are divided between backer and player
• Makeup terms: Whether makeup applies, caps, and carry-forward rules
• Approved games: Specific stakes, formats, and tournament types covered
• Reporting requirements: How results are documented and verified
• Duration: Contract length, renewal terms, and termination conditions
• Expense coverage: Whether travel, hotels, and living expenses are included
• Exit clauses: How either party can end the arrangement and settle
• Dispute resolution: Process for handling disagreements

Written vs Verbal Agreements

While poker's culture historically relied on handshake deals, written contracts are increasingly standard for significant arrangements. Written agreements prevent misunderstandings, provide legal recourse if necessary, and demonstrate professionalism. Even simple email confirmations outlining key terms are better than purely verbal agreements.

Legal Considerations

Staking agreements are generally enforceable contracts, though enforcement can be complicated by poker's legal gray areas in some jurisdictions. As documented by the American Gaming Association, gambling laws vary significantly by region. Major staking deals, especially those involving significant sums or formal stables, should involve legal review to ensure proper structure and tax compliance.

Tax Implications

Staking income has tax implications for both parties. In most jurisdictions, staking profits are taxable income—for backers as investment returns, for players as gambling income. The IRS gambling income guidelines detail US reporting requirements. Players should track all results meticulously and consult tax professionals familiar with poker income.

Finding a Poker Backer

Building a Track Record

Before seeking backing, establish verifiable results. Track tournament cashes using databases like Hendon Mob or PokerNews. For online play, maintain detailed hand histories and tracking software records. Use our session tracker to document results professionally. A transparent, accessible track record is the foundation of any backing pitch.

Where to Find Backers

• Staking websites: Platforms like StakeKings, ChipMeUp, and YouStake connect players with investors
• Poker forums: Two Plus Two's Staking forum is the industry's central marketplace
• Training site communities: Members of poker coaching communities often seek staking relationships
• Live poker networks: Relationships built at live tournaments and card rooms
• Social media: Twitter/X poker community, Discord servers, and Facebook groups
• Direct outreach: Contacting known backers and stables professionally

What Backers Look For

Successful backing applications typically demonstrate:

• Positive expected value: Verifiable winning history with statistical significance
• Game knowledge: Understanding of strategy, demonstrated through discussion or coaching
• Volume capacity: Ability to play sufficient games to generate returns
• Professionalism: Reliable communication, punctual reporting, serious approach
• Mental stability: Emotional control and tilt resistance
• Integrity: Reputation for honesty and fair dealing

Pitching Yourself

A professional staking application should include: comprehensive results history with sample sizes, analysis of your edge sources, proposed terms (stakes, games, split), realistic volume projections, and references from other players or coaches. Be honest about weaknesses—backers appreciate self-awareness. Start with smaller stakes arrangements to build trust before seeking larger backing.

Becoming a Poker Backer

Investment Considerations

Before backing poker players, understand the risk profile. Poker staking is a high-variance investment where even backing winning players involves significant short-term uncertainty. According to financial research, proper portfolio allocation suggests limiting speculative investments like staking to money you can afford to lose entirely. Never stake money needed for living expenses or other obligations.

Evaluating Players

Assess potential players on:

• Sample size: Require statistically significant results (1000+ tournament entries or 100k+ cash game hands minimum)
• Game selection evidence: Proof they choose beatable games at appropriate stakes
• Strategy discussion: Technical poker conversations reveal actual understanding
• References: Contact other backers, coaches, or community members
• Work ethic: Historical volume and consistency
• Communication: How responsive and professional are interactions

Portfolio Approach

Smart backing involves diversification. Backing multiple players across different games and stakes reduces variance compared to backing a single player. Use our tournament ROI calculator to model expected returns, but remember that short-term results will vary significantly from expectations.

Monitoring and Management

Active backing requires oversight. Establish regular reporting schedules, review hand histories periodically (for cash games), verify tournament results against public databases, and maintain open communication. Watch for red flags: declining volume, inconsistent reporting, resistance to strategy discussion, or lifestyle changes suggesting problems.

Swapping Action

What Are Swaps?

Swapping is exchanging percentages between players rather than purchasing action. If two players swap 5% before a tournament, each gives 5% of their potential winnings to the other. Swaps reduce individual variance without monetary investment—both players benefit from diversification while maintaining their own stakes.

Swap Strategy

Swaps are most valuable between players of roughly equal skill. Swapping with a significantly weaker player reduces your expected value; swapping with a stronger player is essentially paying for insurance. Many professionals swap regularly with trusted peer groups, sometimes exchanging 10-20% across multiple tournaments.

Tracking Swaps

Maintain careful records of all swap arrangements. Before tournaments, confirm exact percentages with swap partners. After events, promptly calculate and settle obligations. Disputes over swaps damage reputations—be meticulous about honoring agreements.

Cross-Markup Swaps

When players of different skill levels swap, the stronger player might request "cross-markup"—swapping at adjusted rates. If Player A believes they have 20% more edge than Player B, they might swap 5% at 1.2 markup (receiving 6% of B's action for 5% of their own). Cross-markup swaps require accurate self-assessment and trust in mutual edge evaluation.

Common Staking Mistakes

Ethics and Reputation in Staking

The Importance of Integrity

Poker is a small community where reputation travels fast. Players who cheat backers, misrepresent results, or fail to honor agreements find themselves blacklisted across the industry. Conversely, a reputation for honesty and professionalism opens doors to better backing opportunities, higher stakes, and valuable relationships.

Common Ethical Issues

• Result misrepresentation: Lying about wins/losses or hiding side-game results
• Markup fraud: Charging markup without genuine edge justification
• Ghost-buying: Having others enter tournaments on your behalf without disclosure
• Contract violation: Playing unapproved stakes or games while staked
• Intentional soft-play: Deliberately playing poorly when staked

Building Trust

Establish trust through consistent transparency. Provide detailed reports even when results are negative. Admit mistakes openly. Refer backers to independent result verification. Over time, trustworthiness becomes your most valuable asset in poker's staking ecosystem.

Tools for Staking Analysis

Several of our calculators help analyze staking arrangements:

• Bankroll Calculator – Determine appropriate stakes based on available capital and risk tolerance
• Variance Simulator – Model expected variance over different sample sizes to set realistic expectations
• Tournament ROI Calculator – Analyze tournament profitability and expected value
• Session Tracker – Document results professionally for backing applications
• Expected Value Calculator – Calculate EV for backing decisions
• ICM Calculator – Understand tournament equity for staking valuations

Key Takeaways

Responsible Gambling

Staking involves financial risk for both players and backers. Never enter staking arrangements with money you cannot afford to lose. Players should understand that even positive-expectation poker involves significant variance and potential for extended losing periods. Backers should treat staking as speculative investment with appropriate portfolio allocation. For gambling support resources, contact the National Council on Problem Gambling at 1-800-522-4700.

Frequently Asked Questions

Related Strategy Guides