It's really none of the above. What it's closer to is subjective.

Regardless, still doesn't address the issue of how it makes sense to have to pay back MU if the business fails. Unless you explained that and I missed it.


Maybe closer to 100% investment by staker. Dividends split.
Staker stills owns the investment - so horse can't play elsewhere.

or

If you invest in a gaswell on my property, you pay 100% costs to drill, once the well runs dry and we both got our royalties in the going concern, you don't get your cost to drill back from me.

Getting off track so I'll stop.

I just went back and reread the arbitrators’ rulings. One says Cate should simply stay on stake indefinitely, and the other says either Cate should stay on stake indefinitely OR the two should agree on a buyout price. It doesn’t seem to me there is quite full agreement between the arbitrators.

Either way, Chad isn’t seeking repayment of the 60k in Cate’s current makeup. Instead, they’re both sliming one another publicly, with the arb ruling, generously construed, as being Cate is still on stake if she plays again.

The quality of the arb rulings is very poor. I can guarantee that if I were to have been asked to arb this dispute, my thoughts would have been substantially deeper and more thoughtful than either of the posts I read.

Lol whippaments

Partaked in some of that way back when. Way negative EV for brain cells though imo

Howard T,

What do you mean by "generously construed"? Arb ruled the deal is in place basically. Do you mean that it's generous because she can choose when to return, rather than have to pay up or agree to a buy out since time of return to play is indefinite?

Well a player shouldn't sign up to the 100% losses pay back unless they have a huge playing edge that will make their own risk v reward profile very attractive, nor should the backer make it 100% IMO unless it is a big edge player.

It differs to the gas drilling analogy in so far as we know for sure that there is unlimited gas in the ground, but might break a few drill bits first getting there!

Important to add is that a player *aware* of the 100% rule can quit earlier, at say -$25K, to limit their downside.

I honestly forgot she existed until this randomly appeared in my timeline tonight.

Whole lot of opinions ITT about how staking agreements should be structured. However all of those opinions including those of the original two parties are 100% irrelevant once we get to the part where both parties mutually agreed to an arbitration process.

The arbitrators came to an agreement. From everything I have read one party (Cate) has accepted and agreed to the arbitration agreement, the other party (Chad) has not understood or accepted that agreement.

What Chad does not seem to get is there are three scenarios possible under what the arbitrators agreed to:

1) Cate never plays another hand of cash poker again.
In this case she owes nothing. Chad has made a $60k bad investment, life sucks for Chad, move on and get over it. Cate has a chance at regaining sobriety, mental health and a new life outside of poker. The odds are against that outcome but good luck to her;

2) Cate comes back to play cash poker sometime in the future.
In this case Chad owns her ass. He has first right of refusal to continue staking her. If he chooses to resume their staking arrangement then he can once again dictate the terms under which she plays and she owes the full $60k makeup figure. Or Chad makes the smart decision and cuts her free before losing any more money beyond the $60k bad investment he has already sunk into her; or

3) They come to some mutually agreed buyout.
They settle on some number, probably much less than $60k and they both go about their own lives with no further obligations to each other. This is probably Chad's best case scenario but honestly Cate has no incentive to do this beyond buying karma points.

Chad seems to think he is entitled to $60k because Cate quit the stake. From my reading of what both arbitrators said in the emails Cate posted to Twitter they agreed he is not entitled to the $60k. His options are the three I outlined.

It is obvious Chad does not see #1 above as part of the arbitrators decision but it is directly implied by #2. He preserves the right to continue the staking agreement in the future by foregoing recovery of the makeup in the present. Best possible case, Cate gets sober, regains a stable mental state and returns to being the midstakes crusher Chad once saw her as, she makes back the $60k plus earns Chad additional profits. The only road to that best case future is if Chad lets the $60k ride until she returns to poker, which includes accepting that may never happen.

Maybe agreeing to arbitration was his only option because she insisted she owed him nothing and her stance was that no legal contract existed. So in those circumstances he may as well go to arbitration as it's a free punt for him.

There is such a thing in the law as appealing a decision because it might be an unjust one or new evidence has come to light etc.

The problem is here. The two arbiters did not totally sync up here.

His arbiter offered the option that she can quit poker and they agree upon a settlement *or* Cate has the option to play off the debt.

Her Arbiter said she can play off the debt *or* quit poker and owe $0.

Exactly.

The portion of both arbitors' decisions that Chad chose not to quote explicitly discuss the scenario where the stakee quits poker. In the scenario, both arbitors agreed that the stakee owes nothing.

Very skinny + mentally unstable = drug addict

Read his arbiter's statement again. He mentioned a buyout if she quits poker. To be fair, both statements were sloppy and unclear. Both arbiters should convene and re-write them more succinctly.

I'm not saying the player should be forced or enslaved into anything. And I know you're not saying I was either. However, and this example is perfect here, the player seems like they can actually make more money not playing poker. Why would they not owe the money back over some period of time as they continue to earn income elsewhere?

Obv the backer should have the "rights" to the players roll when/if they come back, but getting 0 in this spot seems crazy to me.

Again not saying grind 5/10 for the rest of their lives. But slowly pay back as they can.

As an aside, and I say this having never been backed and never owing anything to other poker players, I can not imagine a world where I wouldn't work my ass off if I for some reason owed someone money to pay them back.


Agree get this kinda thing in writing.

Not like this is a surprise opinion, but I agree that the baker is taking the majority of the risk in a spot like this.

I know this is commenting on a small portion of a longer post but, hasn't Kid Dynamite said itt he's washed his hands of the money at this point?

To all the people saying obviously she shouldn't be allowed to quit poker/walk away: how would you define that? I've seen deals that specify the horse has to play 20 hours/week and in that case if she isn't playing 20 hours/week obviously the backer would be owed something. But if there's no volume requirement to begin with I don't see how you could possibly argue she owes anything if she wants to quit poker. What's the difference between quitting poker and continuing to play on the stake at 0 hours/week?

Again I mentioned above, I think Cate comes off super scummy and borderline angleshooting the deal, but I don't really see a consistent standard you can apply that doesn't require a volume commitment but then punishes someone for putting in 0 volume aka quitting. I've been out of poker a few years now but when I was playing full-time that was definitely the standard for most staking deals. It seems that Chad has a clause in his deal specifically saying that's not the case, but without defining what quitting poker means that's hard to enforce.

Also I'm sure Chad is better at staking than me but that seems like an awful clause to have in your contracts. If a horse wants to quit poker in mu they're almost definitely going to start punting whether it's malicious (I need to make him drop me so I can quit) or subconscious (I'm in so much mu anyway I need to play super high-variance so I can get out of mu and leave poker and move on with my life). And if they're really quitting poker it's not like their reputation in the poker community matters much to them. It just seems much better to me for both parties if the horse is allowed to quit poker and not owe mu unless they come back again.

Also the horse has been beat enough but getting **** in writing is important. Not even anything that would be legally binding just something that can be looked back on in case one side forgets and in cases like this where there's a disagreement and it could be used in arbitration etc.

People who want to be staked (in live poker 2/5 5/10) are typically degens/ desperate/ broke. These types play long hours at the casino (basically living in the poker room) with mediocre results until they burn out or blow up.

People who run professional stables see the opportunity to use their weakness/ pressure points in the hopes to make a quick, consistent cash flow. It's incredibly unethical / scummy and is a huge net negative on the poker economy as a whole.

From some of the rumors I've heard about the stables in mdl and lv, the stakers are making serious dough for incredibly little work, while their drones (who have almost no shot of successfully leaving the stake) go out and grind 200 hour months and suck the games dry.

Stakers should know full well that a % of staking agreements will end poorly for them. It's comes with the territory of preying on desperate people. That's why they can justify taking such a ridiculous cut of winnings in the first place. Guys like Chad are making money over fist here and they know it. While the horse certainly is a scumbag/ degen, I have no sympathy for the backer crying about losing money on one of presumably many EV investments they have going.

Well it looks like Cate wants to just cut her make-up and keep play, not quit. So basically every comment in this thread so far assuming she is trying to quit poker, is wrong.

https://twitter.com/catehall/status/1042097846994882560

Your statements don't align. First you say players getting stakes are degens and mediocre. Then you say backers are exploiting that fact and making serious dough on these players which doesn't make sense.

Mediocre staked player grinds out $20/hr at 2/5 then fires it a baccarat and loses. Goes back and grinds some more on a stake then fires it on cavs moneyline in the finals. Etc etc.


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Not even that. I doubt anything is left after paying ~50% to the backer and general bills/ necessities. They would have to be crushing the stakes in order to get out of the arrangement and play on their own. It's just not likely considering they needed a stake to play in the first place.

I think he's inferring that because the staked player has to give up a percentage of their profits that they'll only have enough to cover living expenses with what is left so will never be able to build a bank roll big enough to play the game with their own money and are therefore stuck (trapped) at that stake and with being backed.

Eventually they might burn out after say 2 years with ~$20K in make up, but during the time they've been grinding the staker has made ~$60K so is net $40K up.

One arb ruled that the deal is in place OR that the two negotiate a buyout price. The second part of that, after the “or”, isn’t agreed as between the arbitrators. The other arb ruled that she is still on stake, essentially indefinitely. These two rulings taken together are not a final binding ruling that clearly tells the parties what to do.

Oh it seems most people misunderstood
And the main thing here is the buyout amount?
Or it was, that created the drama made her stop playing under stake, Cate did drugs and then she decided to quit poker. But the buyout amount itself when she stays in poker is the dispute issue here?

I'm 100% on her side then if Chad wants the full 60k and not that multiplied by Cate's action whether it was 50 or 2/3rd. And the arbitration didn't seem to cover that

Chad desperately needs a written contract, even if it's not legally binding. Doing this type of stuff over the phone is pretty ridiculous. The fact he's done is 40 times before is even more mind boggling, although I guess because it kept working he thought it would continue to work.

My first reaction was that he wasn't staking her, he was buying her action, which would mean he was owed 50% of the 60k... but then she said she was his horse and also referred to the staking agreement so I guess she was being staked.

This means that they should refer to their agreement, (which is almost never 100%, but also often not 0%) but since there's no written contract to refer to...I guess arbitration was the best idea.




As far as staking itself goes: it's not a good idea to put a horse into a game where they can lose 20-30 buy ins in one sitting. If they're aren't rolled for the losses at the smaller game then clearly they can't handle these losses. When faced with the prospect of grinding 60 buy ins at the agreed upon stake level in order to be even (once again really bizarre because it sounds like she almost never played this stake, so it was more like Chad was just buying her action, but whatever) or to just walk away from the deal it's no wonder she chose what she did. If someone wants to play this high out of their comfort zone then it should be done aside from the stake for obvious reasons. Or he should have a very good contract with them.

That's what I'm talking about
She's his horse she's staked but that should be the same as buying action and pay her cut of the losses not 100%

It'd make no sense to get staked otherwise ever and the backers forcing people into these agreements are straight up predatory prying on gamblers because if you are able to pay 100% losses there's no reason why you'd not play with your own money - you're getting 100% of the downside and 50% of the profits? That's not how this should work