Quote:
I'm likely that last one on the planet not to understand markup,
Markup is pretty simple. You get X% of action, but you pay Y, where Y = X * markup.
So, if I have a markup of 1.1 (10% markup), and sell $100 of action in a $1000 tournament, you would pay $110 for 10% of my action.
Or, if I have a markup of 1.2 (20% markup), and sell you $100 of action in a $1000 tournament, you would pay $120 for 10% of my action.
In both cases you would get a straight 10% of whatever I cashed. So if I bust, you get nothing. If I cash for $10,000, you get $1,000. If I cash for $500 you get only $50, losing $50 on the deal.
Selling action can be mutually beneficial for both the player and the backer. The backer will benefit if the player's true ROI is greater than the markup charged. The player will benefit because they achieve guaranteed ROI, albeit at a reduced rate, a reduction in variance, and the ability to play more and bigger events.