Hi,

there was an agreement between Stakee and Staker; full staking & splitting profits 60/40; avg buyin $100-$200 online & live, also shot taking; lasts about two years

After a real bad downswing makeup was ~80k; Staker ended the deal

Several months later both parties want to try again. What could be a new agreement that is somehow fair to both sites and also takes into account the previous makeup?

Any advice on how to continue? Thanks in advance

I assume that over the period of your previous agreement you had a positive win rate because if your win rate was negative, your staker would be an idiot to try again.

If you had a positive win rate, but you owe money to your staker in make-up, then it's apparent that your previous deal was wrongly structured. The mistake was to pay out profit to the player, who then spent it. Presumably, profit was paid out on a regular schedule, perhaps monthly. In a correctly structured staking agreement, the player is never paid out.

It sounds like you and your staker need to think more deeply about how staking should work. Sorry, but I won't spell it out here.

For clarity, let me point out that profit is naturally credited to the player's account. The player needs to ring-fence whatever amount is due to his staker (who will be paid out in due course), and the remainder is available to the player.

I'll just make one more point.

When a player pays himself his share of profit regularly, with an agreement that any subsequent loss will be labelled "make-up" to be repaid from future profits, that's a scam. The player holds up his hands, explains that he had rent to pay, and can't repay the make-up.

If several months later, the player goes back to his staker and tries to negotiate forgiveness of some or all of the make-up, while persuading the staker to enter again into a similar agreement, then the player is a scammer and the staker is a damn fool.

Sorry if that sounds harsh!

Some good points by Rummy. I don't see it working out at all, considering the horse was dropped in MU you guys should be considered square. If you are square why would the horse if he is a winning / good player ever have incentives to do a new deal with same backer where he would recieve less money of his winnings? Speaking from experience if both parties dont have the same incentives / or super close incentives a deal just never works out. It's also why big MU become a issue because the further the horse is in the hole the more incentives he has to take a lot of risk to get out of MU or get dropped.

I assumed that the player in question was you, Mr. Fabulous, but that may not be the case. Perhaps you're the staker or just a mutual friend of both parties.

My advice, for what it's worth, is that repayment of the outstanding make-up should be the subject of a binding loan agreement, separate from any future staking deal. And any future staking deal should be correctly structured, with no provision for make-up.

Both are mutual friends and both are also befriended eachother.

Stakee is/should be a winning player but ended in a brutal downswing. Staker decided to end the deal/dropped the Stakee.

Now they find together once again and want to start "new". Because of the friendship Stakee feels obliged to win it back instead of finding a new Staker. There was no pay out before because Stakee would only be paid after profit. As there was no profit, there was no payout.

Baiscally 80k in MU would mean, he has to win 80k back, before any profits would split (60/40) again. As winning 80k back is huge, they want to find a new deal that acknowledges the 80k MU but also rewards the Stakee immediately (incentives).

There was a proposal: MU gets fully dropped to 0; future profits are split 70/30 until Staker has +40k back, then split goes back to 60/40 or deal ends/new negotiation.

Can do monthly profit chop while in makeup.

If in profit on the month, 50% to makeup, 25% to staker and 25% to player. Something like that. In this case, player does not get an unfair advantage since staker also takes money off the table in profitable months.

"Can do monthly profit chop while in makeup."

There is only profit or loss, a simple reality obscured by the dubious concept of "makeup".

For clarity, you should say "Can do monthly profit chop while in loss."

Introducing a monthly settlement is the trick that allows a losing player to pay himself from non-existent profit, at the staker's expense.

There is no profit without both the stable's financing and the horse's skillset and time.
IMO, your view undervalues the player's time/ability. If a horse plays winning poker and runs below EV for 2k games, then happens to score to breakeven for the stake, the stable can easily cut ties at the expense of the horse's time.

I agree that monthly settlements benefit the losing players in the immediate term. However, a properly run stable should be able to identify if a horse has the qualities necessary to become enough of a winning player to make up (pun intended) for the initial losses incurred by the novice player's earlier ability before taking them on. If a horse is beating the games so much so that they can produce an auto-profit, then they wouldn't be looking for fringe backing deals and would easily be taken up by any reputable team. The fact that they look for support outside major backing groups is a clear tell of their increased financial risk. Managing this risk is the recruiter's (backer) responsibility, not the applicant's.

"There is no profit without both the stable's financing and the horse's skillset and time."

Profit from financing?

If there is a profit then money flows from the player to the staker and no financing is required.

If the player loses, that's not financing either. It's simply a loss.

It would be financing if the staker handed the player a bankroll. But who, in his right mind, would do that?

A staker is not an investor. (Nor is he an employer, manager or coach.) A staker is an underwriter. He insures the player against losses in exchange for a share of profits. That insurance allows the player to manage his risk of ruin and play in bigger games.

Interesting. The way that reads suggests you are viewing this from a live cash perspective, perhaps live mtts too? In which case, how you see it makes sense, where a player is putting up the money in order to play games and can recoup losses from the stakers. So maybe I am misusing the term "staker" when I really mean backer? Unsure.

My background is in online MTTs, where a bankroll is provided. Thus, the staker/backer is not insuring losses. They are providing the liquidity/financing in order for the machine to go. In this case, it seems reasonable (to me) to call them an "investor." Not really interested in debating semantics though.

Are there really people in the world who lose $80k backing a friend in $100 - $200 poker tournies and then a few months' later think "should give that another go"?

What evidence in the contrary to the $80k loss is there that your friend is actually a winning player, if they are not (and I strongly suspect this is the case) then extending this delusion of another staking agreement is detrimental for all involved.

Isn't that how staking usually works?

All winning players should have a staker. Sharing results with a staker reduces variance so the player can take a shot at a higher limit where he could make more money. It's the rational way to make progress for any player managing a finite bankroll.

It's a sweet deal for the staker. A winning player offers a staker a share of his profit, assuming he continues to perform as he has in the past.

So the staker accepts a risk of loss in exchange for a share of profit. He makes a bet on a proven winner. To make that transaction, it's only necessary that the staker pays up when there is a loss and the player pays out when there is a profit. It's not necessary for the staker to finance a bankroll.

Now, for all I know, there may be stakers who are willing to also finance bankrolls. They say there's one born every minute. I'd be astonished to find one, but if I did and if I had any integrity left, I would feel obliged to explain to the fool that advancing a bankroll is actually lending. I would explain that despite my winning record, past performance is no guarantee of future results, and that if I lose I will be unable to repay the loan.

Since I do still have some integrity I would not solicit a loan that I might not be able to repay.

Anyway, you don't need a bankroll if you're insured against loss.

Maybe it's worth stating explicitly, for any winning player who wants to move up to a higher limit:

You don't need a bankroll. You need insurance against loss.

If you understand that as a first principle, everything else should fall into place.

The confusion I see in this forum is the result of smoke and mirrors. The smoke screen obscures and the mirror inverts.

The smoke is language like bankroll, make-up, stable and horses. A winning player is not a dumb animal, best managed by somebody smarter. He's a skilled professional offering to share his future profits. Have some respect!

Look more closely at 2+2 to see the mirror. We have an "Offering Stakes" forum where players seek; and a "Seeking Stakes" forum where players offer. The very word "stake" is used as a noun when really it's a verb. Where staking is concerned, 2 + 2 = 5.

Mostly, the parties to a bad staking agreement are just confused. But sometimes, seen in clear light, they are scammer and victim. If you're putting money into some elaborate staking scheme while somebody else is taking money out, it's a scam and you're the victim.

As it happens, I'm a winning player who wants to move up to a higher limit. If you like the way that I understand staking, and you're based in Hong Kong or Macau, PM me and let me know why we should meet. I'll gladly explain the terms on which I would share my profits.

Good luck at the tables!