So i was wondering whats the proper way
if a player is staked and theres no mention of a jackpot
just a percentage split of winnings and he ends up hitting the bad beat jackpot
is it fair game to split that jackpot according to the staking deal
or is the player entitled to all of the jackpot winnings

Agree 100% ^^

Agree with triplesuit

You should also get any tax situation cleared up too. If the Jackpot is in your name, the IRS will assume you owe taxes on 100% of it.

And, before entering into any staking/backing agreement, everything, no matter how remote the possibility or how seemingly trivial, should be discussed and agreed upon. And then put in writing.

ok what about for tax purposes the jackpot is paid out in full
taxes are the winners responsibilities
the staker insists on splitting the full payout before taxes are taken out
would it be fair if the payout is split once taxes are accounted for?

There's a form the IRS has that you submit to indicate when something like this is split. The thing about taxes is that let's say the BBJ was 50k, and you each got 25k pretax. Depending on your other income, deductions, etc one of you could very well pay more taxes because you might have a higher marginal tax rate. For example, if you make 15k a year, and add 25k to that, you pay a certain amount on that additional 25k. But if your staker makes 150k per year, and then adds 25k on top of that, he will end up paying more tax on it because additional income is at a higher rate than you.

So you really should split it pretax, and have each person file his own.

Agree that the staker gets the same share of the jackpot.

Re: Taxes... The staker should pay taxes on the money, but I don't know exactly how that works, how easy or even if it's possible. If the stakee has to pay taxes on the whole thing, then the staker gets that share of post-tax money.

I think if the stake is to play in games that are jackpot eligible than it should be addressed in the contract.
If it hasn't been stated one way or the other, should probably be split evenly.
Maybe if the stake is going well a goodwill gesture from the staker of only taking 1/3.

The form you are supposed to fill out and give to the cashier and the cashier gives it back when done. Note you need your staker's SSN and address

http://www.irs.gov/pub/irs-pdf/f5754.pdf

Instructions to payer (casino) -- they are supposed to issue separate W2-G

http://www.irs.gov/instructions/iw2g/ar02.html#d0e822

I know the guy who hit winning end of bbj at foxwoods a month ago was on a staking deal I think they split it 50/50 not 100% sure though was for $150k

^^^This.

I would say unless you specifically excluded jackpots, they are included in the stake.

Foxwoods will not participate in the IRS document where the winning is split; weather its at the BBJ or in a tyny event.... as a staker, I brought the form to them, went thru all the management steps, and its a no go with them... I've seen some people issue backers a 1099.....

You are paying BBJ rake from the stakers funds so they are eligible for the jackpot hit unless discussed otherwise. Tax implementations would have to be worked out but it should be no different than winning $xx,xxx at the tables one night.

split, no other way would be right

Player can split and divert taxable amount of split after the fact by giving staker a 1099.

It does work out better for the player to divert half the taxable amount to staker, rather than just split after tax winnings. The 25% withheld may not cover all of actual taxes owed, and it benefits the player for the taxable amount to be smaller.

It's a little messy since player will not get refund of taxes paid until he files, and staker won't be forced to come up with taxes until they also file. So say BBJ was 150K. 112.5K after tax. Staker is owed 75k of that 112k. Leaves player with 37.5K, but likely will get decent refund on the 37.5k the casino withheld.

BTW...the staking agreement should have covered how bbj and taxes are to be handled.