I'm in need of some help as I am considering a staking arrangement for my friend. She is a proven long term winner at live 5-10 ($1500 max) for about $37 an hour at 460 stdv/hr. Due to life issues, she doesn't have the money to play, and needs a stake.


Her proposal is a 70/30 (horse/backer) profit split with makeup, with a $10,000 starting roll.

Do you guys think this split would be fair or is 30% too low for me to be +ev? Essentially, at 30%, she would have to make ~$33k before I am freerolling on my 10k stake.

Also, Is there a way to calculate MY risk of ruin? I tried plugging in $11.1 winrate (30% of $37) into a ror calculator, and it gave me ~25% ror, but this doesn't factor in that the winrate would be the full $37 when in makeup.

She also tried plugging in her numbers, at a full $37/hr winrate, giving her a 5% risk of ruin, but Somehow I dont think that number seems right, since she will be taking 70% of the profit to keep for herself and I will be taking the remaining 30%, meaning none of the profit is re-invested into the roll unless we are in makeup.



Taken to the extreme, if it were a 99/1 split deal, there is no way in hell I could be profitable right? She would have to
make $1million before I would be free-rolling, and the chance of her going on a downswing for $10k before making $1million is far greater.

So basically what you're asking is, will your friend make 33k before she loses 10k? And, if not, what is the highest amount she is likely to make before losing 10k? I feel like this should be in the bankroll management thread.

I feel like the ROR is going to be higher with such a small BR/stake, especially with nothing going back into it. But I do think this is the wrong forum for this question.

There's a chance I would be adding in another 5-10k as needed for a total of 15-20k

Personally if I were staking someone I'd go 50/50. I've never been the backer but I've been the horse and 50/50 was what I was offered and it seemed very fair to me.

Also, a $10K roll is waaaaay too small for 5/10. That's only 10 BIs. Less if she buys in for $1500. All sorts of crazy variance can happen within 10 BI. She could be playing well and still lose $8000.

You need a long term staking deal to ride out any variance, which means you'd need to give her a roll of like $80,000. I'm guessing you probably can't swing that (few and far between could) so I'd think long and hard before making this deal.

Many a mutually beneficial staking deal has been done for less than 8000 bb. That being said, I too have some concerns about such a small stake with nothing being reinvested. However, one glimmer of hope in that regard is that her standard deviation is less than 100bb/100 hands, so that would indicate she doesn't go on downswings often or of great significance.

That deal sounds awful and not to trash your friend but $37/hour with the variance of 5/10 isn't very good. I'm winning more than that at 1/2 and 1/3 and that's more like a decent 2/5 winrate.

Question - do you value your friendship? Will it go south if she busts $10k or $20k? Are you doing this as a friend or for profit? If its profit then then risk isn't worth the reward IMO.

I also don't have much confidence with someone holding $37/hr in 5/10.

I would rather do a loan than staking.

70-30 is a garbage deal.

With 10k roll, And only $37/hr win rate of stick her in 2/5 and do at least 60/40. 50/50 is honestly much more standard.



Put her in 2/5 with 20BI and tell her tough titties if she refuses. She's the one who needs the money. Not you.

Plus why would anyone play to win $11/hr is beyond me, especially at 5/10.

I think it's a recipe for disaster.

Grunch - Seems like a not great WR for 5/10 deepish. If money is an issue why doesn't she just play 2/5 for a few months (other than wanting a staker to take way the worst of it, I mean who wouldn't want that)?

Wow, if you're making more than $37/hr at 1/2 and 1/3 I have to imagine you're the best player there by a mile. I mean that's an astounding win rate at that level...the equivalent of making $80K/year. That's extremely impressive! Is this in casinos or a home game?

Even at 2/5 I would say it's much better than "decent", which to me would be a hourly between $25-30. I feel like $37/hr should put you just below the upper echelon of winning players. Only the best players should be making $50+/ hour...or am I totally off about everything?

3.7BB/hr is definitely not great at 5/10, or at any level, but it's still something considering that 75% of players or more in a poker room are losing players.

@RP
Assuming she maintained a $37/HR winrate, she would be making $26/HR.

@WJ and friends
I also think it's unfair to use high variance predictions of the game when we were given her standard deviation/HR over the period she won $37/hr, and it was actually quite low when compared to live conditions sometimes associated with higher winrates.

Still, If she must make 33k before you're free rolling the stake, think about what that would require, assuming she runs at $37 an hour. If she played 40 hours a week, it would take 23 weeks to make that, about 5 months. So, you're counting on her going 5 months without a 10 buyin downswing just to break even. I don't like the deal. I think you need to either stake her more, take a higher percentage, or have her play 2/5 instead.

Also, I know you guys are friends and everything, and I'm not privy to the details. However, even if she was my friend and I knew what her "life issues" were, I would be concerned about the veracity or the extent of these issues and how that might affect my investment.

Oops, I read it opposite. Still, $26/hr?

How often does she need to square up?

Assuming she played 100 hours the 1st month, she would make $2600, not even enough for 2 BI.

Assuming she has no bills whatsoever, she would need to win 4 months straight just to build back up to her starting roll of $10,000 or 6BI.

That's assuming best case scenario.

I don't think she even realizes what she's proposing, and that alone tells me that she's not a reliable person.

50/50 is better

Make her play 2/5 deepstack (1k) or standard 2/5 (500) if possible.

Little worried if someone is playing 5/10 on the reg and doesn't have 10k liquid cash. She's your friend so you know her situation best, sounds a little sketch tho.

Anytime I've taken a shot and had a friend take a percentage of 1 or 2 buy ins its always been 50/50 split. 70/30 is too much risk on your end.

**37/hr is pretty good

$37/hour at 5-10 NL with $1500 buy-in? ---, and without a bankroll yet?

I make like $50/hour on 1-2 NL with $300 buy-in when waiting for the bigger game of 5-10 NL at the V on the Strip where I'm good for $200-250/hour

Why don't you do the playing and the winning for yourself?

+1

Although so soon after the Nolan Dalla / Jaclynn Moskow / motor boating controversy, I suggest using a term other then "tough titties."

Also require her to work with a reputable coach to improve her win rate.


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I'd start off with how certain you are about the winrate. If you didn't see a tax return, I'd take any claim of a winrate with a large block of salt. Next, "life issues" is a huge warning light. As Phil Ivey would tell you, lots of horses end up taking their stake because they used it for other purposes, always "intending" to pay it back when they won big.

50/50 is pretty standard. 30/70 is a great deal for the horse and a gift.

This is a bad deal for you under the circumstances you've stated. Now there may be reasons beyond what you stated where you feel obligated to make this deal. At least give her no more than 2 BIs at a time when she arrives at the room and recover them each night before she leaves. If she gives you less, then that's her make up. If she needs more, you'll want to look over the table to see if she still has an edge before giving her more. You may need to pull her from a tough game.

I agree though, your odds are better if she was playing 2/5. If she's a winner at 5/10, she should be able to make $37/hr at 2/5 with a lot less risk.

I make $25/hr at 1/2 and I am confident that I have a similar (likely smaller but still similar) edge at 2/5. $37/hr is completely feasible at 2/5 and far easier to do than at 5/T if that's all shes making.

Quoted for bull****.

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Got some data to back this up?

Also, you might be the only one on the planet who sits 1/2NL while waiting for 5/T.

Don't feed the trolls.

If you are going to do a stake, 70/30 is horrible for the backer unless you trust her skill 100%. The only way i'd ever do a 70/30 is if I had hundreds of hours with the person and saw with my own two eyes that they were worth it.

Also, don't let her keep the first 10k in wins. It goes back into the bankroll. Then you can start chopping up the wins. This way if she goes on a 5k downswing after pulling out profit, you don't get stuck holding the bill.

Serious question are you or are you trying to **** her?

Def stake for 2/5, maybe with a discussion about playing up if the bigger game is juicy. 10k not a big enough roll for that game, and if its playing deep larger buyins can also be much more profitable.

I like the suggestion about putting a % of the profits to bankroll. Or similarly, needs to win 10k before cashing out at the agreed split. As an incentive 10% or so right away is good but 10k isn't even a big roll for 2/5, another game where buying in deeper than 100bb can also be correct.

the one variable you did not mention was your tolerance for risk. you set this at what you are comfortable, its related to confidence interval in statistical analysis

you set your own tolerance risk and use it in the formula. if you want a safe sound investment, you should probably use a 90%

basically you say that you want your stake to double before it goes broke 90% of the time

50/50 cash deal is really bad for the horse and unsustainable unless there is huge rakeback which does not occur live

70/30 sounds way too high tho, I've seen very very good players play for 65%

its also a really bad idea to not pay her as you go, so you can't put all of the money she wins back into the stake. she will get comp money for food but she is still going to need a "salary" against her winnings. I would set aside some of the money for a straight weekly "paycheck". Give her 500 per week against her earnings?

also, you need to not let the arrangement be open-ended, set a number of hours that the stake will last, that is the last piece of the puzzle in figuring out how much roll you need