How could you possibly be +ev playing poker on Ketamine and whippets? My old roommate did both of those and he would fall into the couch. Whippaments itt.

But this assumes that the player is +EV *if*/when they start playing again and that the original backer is in a financial position to afford to back the player again.

I've been backed (sold MTT pieces), and I've backed players on a stake and bought MTT pieces. Everything is so ridiculously heavily slanted in favour of when you are backed compared to being a backer.

To redress the balance, contracts could be improved a lot, esteemed players could get together and formalise backing/staking standards and procedures, and there could even be some indemnity schemes devised for bad debts/bad behaviour.

then that is backers fault. you dont get to freeroll investments.

Thanks for taking the time to answer.

I don't think this answers my question though.

Seems like you're saying something like "just a part of doing business". I'm asking why is that a part of doing business? In what other activity, business, or anything really can you just walk off saying "I'm done, never doing that again" and be free of your obligations? And why would poker players/backers adopt this ever?


Assuming this is standard, can just quit not play ever again, what is stopping any random player with a clean background from taking a huge shot at as big of a game that they can find on a backers dime?

Player wins, great free money. Player loses, great walk away nothing happens.

Who would be dumb enough to enter a staking agreement with someone as deranged as Cate Hall?

That's because she's smart. When you're smart you can just come up with a plan and decide it's all calculated and that you're not an addict. /s

I hope she gets out of poker for her sake. It wont end well continuing down this path. Tbf it's verrrrry tough to do quite well at poker and also have a healthy lifestyle.

She has likely deluded herself into thinking she's a high level player and also that using ketamine/whippets is alright.

Was she the one posting about believing in God recently? I think some humility will do her a lot of good.

Backers don't want a freeroll they just want to be paid their equity from winnings (well known player took ~10 days to contact her backers, including me, after winning huge at the PCA), know that the player has played the comp (player I backed blew the money on his own cash games, never turned up), play the games agreed (player I staked played different games with the money almost from day 1), get honest reports of results (player I staked fabricated results, then went AWOL with any money left).

Backers have 100% of the risk and 90% of the b***$**t.

As the lender of this debt, I would have it in writing as to what percentage of the make-up must be paid to walk away (she has the funds) and I would issue a cancellation of debt and file it with the IRS. this accomplishes two things, lowers my taxes, and raises hers as she now officially takes this as income, which it is.

after all this, however, I think the backer is screwed in how little he protected his interest while staking someone who publicly appeared to be wrestling with their long term choices and ambitions. I'm shocked Cate didnt have a contract, as a lawyer, but in this case it works in her favor.

Leaving poker forever is hardly a freeroll.

If the horse sincerely wants to leave the poker world entirely and is deep in make-up, you can't enslave them to play indefinitely with no possible upside for the horse.

It's one thing to want to leave the stake while in make-up to get a better deal somewhere else. But if someone has decided they can't play anymore under any circumstance, there is no real upside for either party for them to keep playing.

In this situation, a horse who never wants to play poker again but is forced to play by their backer might as well just intentionally lose their backer's money until the backer lets them out.

It's also worth pointing out that Cate lost $30k playing a 25/50/100 game that Chad himself organized and bought her into. Now he expects her to grind all that back playing 5/10? This seems pretty unreasonable.

lol if horses had to pay full amount when they decide to stop playing poker then there would be literally zero risk for the backer, this backer is not the brightest star in the sky

Backing someone to the tune of taking 33 1/3% - 50% of profits is a huge ROI relative to most investments (stocks, bonds, any traditional investment). It also very risky and thus also partly the reason for the higher ROI than “traditional” investments. Oh and not to mention the trust issue as a risk for a backer for his 50% ROI.

Most (if not all but Chad) backers write off MU if the horse quits poker. (If I understand correctly what I’ve read itt.) It becomes a bad debt - a cost of doing business chosen.

From a business perspective this all seems a pretty fair deal for both stakers and horses. High risk/reward for backer – more or less risk free for horse,but giving up big chunk of profit.

Why anyone would agree to pay MU if quit poker is beyond me. Desperation maybe, no other options? (Wasn’t in this case with CH seems, but still.)

If someone quit the stake in MU and goes out on their own or switches backers, then of course they should pay MU. That would indeed be scummy if they did not.

Not sure what some are missing regarding MU in general - thinking if one quits poker he/she should have to pay MU. CH is right in that regard - it's a loan then, not a stake.

Maybe I’m the one confused.

p.s. If it is in essence a loan, maybe that’s why no written agreement. Could it be contrary to any Federal lending laws?

p.p.s Kudos to Chad for being the only staker on record to require payback of MU if one quits poker - and getting horses to agree to it!

It obviously isn't the best deal but it's not as ridiculous as you are making out, because the theory is that the backer is only backing players with an edge.

Therefore the expected range of upside covers a bigger area on the graph than the expected area of downside.

So in the case of Cate Hall, perhaps the expected range over a decent sample of hands played was -$100K /+$250K.

On a 67/33 split in her favour this is a +EV deal of $67K for her if measured at the two extreme points of the range.

Here's why the option of "playing off the debt at an undetermined time in the future at an undetermined volume requirement" is unfair and has hidden negatives most won't consider:

- Inflation starts to make the investment worse and worse and starts to work like a hidden tax as time drags on. Whether she returned to poker in 2 months from now or 2 years from now is a massive difference and it becomes increasingly unfair to the backer. Alternatively, if she settled now at, say $15,000, that's capital he could use now for other investments that could yield higher returns.

- She could lose whatever edge she had in the games she was playing. Poker isn't like riding a bike and just hoping back in and/or playing intermittently won't always work, especially when you're playing 5/T+. The game evolves. Not only this, but some other unforeseen things could happen where rake gets dramatically increased, the US economy/dollar collapses, or society in general unravels in some way where live poker as a profession starts to become increasingly impossible. The more time away from the table, the greater this risk increases.

- She could become disabled or die. People rarely consider this in staking arrangements, but there's a reason life insurance becomes more expensive every year you delay getting it and there's a reason businesses take out key man life insurance policies on their employees. Also, Chad has personally already experienced this outcome with a previous horse and it's not like Cate is leading the most healthy lifestyle anyway. The longer she delays coming back to poker or the more time drags on by her putting in low volume, the bigger this risk naturally becomes.

No one is suggesting this. If they leave the stake on their on volition (save some major disability preventing them being able to work again), they eventually owe back that money, or a newly agreed-upon settlement amount. That settlement money will come out of their pocket, savings, or via a payment plan from their next job outside of the poker world. No one is suggesting someone who quits poker should be forced to keep playing.

Literally zero risk huh? Chad (and most other backers) have this re-payment policy with all their horses and routinely get shafted, scummed, scammed, or have to cut off the stake themselves because the horse isn't winning for one of an infinite amount of reasons. It's an extremely risky business and the backer is taking on an enormous amount of risk in an already low-trust scummy industry that is the poker world. To assume it's zero risk is to assume every human being is not only an extremely stable and capable person, but that they are also all genuine and trustworthy. In other words, a completely absurd and ignorant thing to suggest.

If you're over 40 and doing ketamine (elephant tranquilizer) and nitrous (another insane buzz, albeit short), and LSD (totally awesome), then you are either on Phish tour, or hanging out with 22 yr olds in the club scene in sketch places. God bless her.

I will never understand why someone would want to stake or be staked.

If you're not able to play st certain stakes with your own money, then don't play at those stakes. Seems simple enough.

It is not a loan. A loan has a pre-determined repayment schedule and does not waive repayments based on the success of the venture the debtor has using the money, nor does it waive repayment plus pay profits.

Most loans also don't offer additional ad hoc credit, like a backer often does when the player says I need more money to play in a big (higher stakes) juicy game or I need more money because I've lost what you've already given me.

In long term deals you can end up playing much higher with even as high as 90% cut for yourself & spend more freely and live a good life. Some backing deals even have the backer pay for rent/expenses if ever in trouble. With the backer keeping rakeback it can become very lucrative with actual legit horses...Sadly the ratio is about 1 in 50 pros that are trustworthy and solid enough to last forever.

Correct. Staking is much more akin to venture capital investing (think Shark Tank) than it is to a loan. Value is added to the player (coaching, hh review, emotional support, etc), liquidity is granted to keep the operation running, and further cash is injected if the business requires more of it down the road (makeup). In return, the shark/backer gets a percentage of all the profits.

How is it any different than a line of credit (which is a loan)?

Just to be clear, I'm talking about it you have to payback MU if quit (the business fails).

And if the business fails the sharks get their money back from the individuals?

I was speaking more to the overall operation. Within the operation, the sharks can sometimes grant loans which need to be recouped first (Kevin O'Leary always tries to draw up these deals to protect his investment). Whether the business fails or not, these loans within the agreement must be paid back.

Venture capital investing isn't directly comparable (which is why I said "akin") because the businesses carry risk themselves if they fail along with the sharks. Remember the sharks are rarely buying 100% of the business, and therefore are not carrying 100% of the risk and 100% of the expenses like a backer does in poker. The businesses often still have a majority stake of their own operation with their skin still deeply in the game. Because of all of this, there is less of a scamming freeroll incentive equivalent to the poker world where your backer has 100% his money on the table, and you can now just take risk-free super high variance shots at nosebleed games and be completely absolved of the debt if it goes poorly by just "quitting".

Keeping horses on the hook for the makeup money they are in should they choose to quit the stake keeps their skin in the game and protects this freerolling from happening. Furthermore, it makes them carefully consider the consequences of any large shot they want to take and subconsciously keeps them from blasting and digging deeper holes for themselves if the **** starts hitting the fan during a downswing.

Because unlike a loan, it is fluid, the backer injecting funds when needed after playing losses, and both parties paying themselves dividends when the P & L is in the black. Also, the backer is not giving the player 50 buy ins in their account on day one of the deal.

If the player asked to be lent 50 buy ins for $5/$10, $50K, with an agreed interest rate and repayment schedule, then it would be a loan. If incorporated was a sliding scale of increased rates of interest based on good playing results, it would still be a loan.

That's fine. Guess you weren't talking about my point at all then. Which was MU when business fails.

Getting back to the original thread topic. CP ran/set up the high stakes game CH lost in if iirc. I don't think he has an issue per se with her dropping $30k.

Cate and Chad -did- agree on a settlement. That was the point of the binding arbitration: to determine the terms of the settlement.

And part of that arbitration outcome was that Cate could leave poker for an indefinite period of time, and resume the stake (with make-up intact) when and if she returned to poker, but without an obligation to repay the make-up while she was away from poker.

Chad has cherry-picked the decision of the arbiters out of context in this thread to make it sound like that wasn't part of the decision. I understand why that outcome might not be great for the staker. But that's what they agreed to.