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Old 11-03-2018, 10:23 AM   #1
SuckMyTilt
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Why Stake?

I keep seeing posts about staking and reading stories about those who've been or been staked.

I keep wondering why anyone actually gets involved in staking? is the risk to reward ratio for those who stake actually worth it?
For those who are getting staked, why bother if your a winning player?

Yes I imagine this has been asked or spoken about several (hundred) times over... But inhavent found any thread as such... So apologies for another.

If your a BE or slightly losing then why even ask for staking? I would imagine that o one would want to?

If your in a stretch of variance slapping you about the the kitchen then why do people then get staked?

In just don't quite see what and why?

Probs very naive or if orang of me tbh...
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Old 11-03-2018, 10:32 AM   #2
Roman
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Re: Why Stake?

if you are breakeven or worse, you can think of it as a lottery ticket at someone elses expense.
If you are winning you could have cash issues for a million different reasons.
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Old 11-03-2018, 10:50 AM   #3
Ten5x
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Re: Why Stake?

Imagine you're a winning player that has a bunch of life expenses come up that drain your bankroll. Now imagine you can get a piece of that winning players action. Now imagine you're a great tournament player, but only have 100k bankroll. Do you think you should put 10k into the main event (probably like a 1 in 10 shot to even cash)? What if you can charge markup? Say put 5k of your own money, and have someone pay $5500 for 50% of the action. That's essentially a risk free $500 "profit", which might come in handy in case you don't get lucky in this tournament. Now what if this guy is a great player and has a 50% ROI long term, wouldn't you want that piece of action for just a 10% markup? There's tons of reasons why it's mutually beneficial.
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Old 11-03-2018, 12:02 PM   #4
jambony
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Re: Why Stake?

Staking, as it should work, is a winning player paying to limit variance/capital required to play and a staker seeking a return on capital.

If a winning player is a $100/hr winner but has a 20% chance to lose money in any given year, presumably they'd given up some amount of that ev to make that 20% into 0. This also frees up their own capital so you can use it for something else - e.g. buying a house, reserves, etc. Sometimes you're in a situation where the price of variance in your income is really high, for example if you have a family and other people depend on you. You don't eliminate variance but you do reduce it by agreeing to a stake.

The staker is making an investment. Say you provide the roll and the winning player offers you half of profits. If they're playing $100/year at 1k hours a year the staker's expectation is $50k but has some risk of loss. This is pretty attractive as an investment. If the average loss is $50k (which is arguably high for a $100/hr winner) there's no investment in the market that offers a 100% return where the risk of wipe out is 20% (you can stop the stake so you can eliminate the tail end of the risk too). This is also a passive investment for the staker - you put your money to work and you just watch over it, it's not a classic partnership. That's why the staker takes 100% of losses and only a portion of the profits.

Realistically the staker should probably receive far less than 50% of profits if the player is actually a $100/hr winner, and the variance estimation is accurate. If this was available to the public, competitive bidders would offer the stakee much lower than 50% because the return is so attractive.

That said, there's a high degree of uncertainty on the staker's side, as there are scams, stakees being losing players, etc, so the market probably settled on 50% to account for the limitations. Even at 50% stakers often end up losing money, which shows how poorly stakers are at choosing horses and/or how well stakees indicate they're winning players when they're not actually. There's also the personal factor in play - you often stake your friends.
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Old 11-03-2018, 12:31 PM   #5
PokerPlayingGamble
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Re: Why Stake?

staking can be highly lucrative. let's say the horse is a 10 bb / 100 winner and plays 3000 hands a day. they require a $1000 bankroll to play $50 buy in games. They are going to win $150 / day, for an ROI of 7.5% per day, and this is an ROI that can compound as they move up. With 7.5% ROI per year being a pretty reasonable return for traditional investment vehicles, you can see that staking people can be very attractive. With a plan to move down in stakes at 50% bankroll loss ROR can be minimized or even altogether eliminated.

The horse would want to be staked if they didn't have the money, or did have the money but would rather earmark it for food and shelter.


Of course, staking people isn't easy. The vast majority of poker players lose, and stake applicants are certainly no exception there. Theft and fraud are issues as well. Even winning players can tilt and become losing players, or a horse might accumulate makeup and then **** off.
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Old 11-03-2018, 02:41 PM   #6
ArtyMcFly
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Re: Why Stake?

If you were an entrepreneur starting a new business, or trying to expand one, wouldn't you consider taking a bank loan if it helped you increase your potential profit?
If you were a banker, wouldn't you lend money to people if they had a chance to pay you back with interest?
That's basically how the staking business works. If you can make money without getting involved in the business, you can go it alone, but the poker world is pretty hard to beat on your own, hence there are people offering "loans", and other people taking them.
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Old 11-03-2018, 03:38 PM   #7
Alexo
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Re: Why Stake?

Besides points already raised, for me the most important one was the coaching aspect. I am currently staked by bitb and wouldn't consider getting staked by a different stable, as the reason I chose bitb was their very extensive video library and high quality coaching. So it looked to me like giving up half my profits for x amount of time would be beneficial as I would improve significantly as a player at a very high speed, something unachievable from studying alone, while also getting involved with and talking with some very talented and skilled individuals. I haven't regretted that choice for a moment.
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Old 11-03-2018, 07:06 PM   #8
BigBananas
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Re: Why Stake?

I used to live with some dude who was constantly getting staked in donkaments. He plays so ****ing bad i always thought to myself why the **** would anyone stake this guy.

After a few months of living with him he had changed his backer like 4 times. He had changed his pokerstars SN once then would sometimes use other peoples accounts for other sites like UB and FTP etc...basically when the makeup got too big he would just change backers and use other accounts to hide his identity.

Eventually he quit poker. I guess got too hard to find a stake when all your accs have a terrible record. I just always assumed after living with this dude that the staking world was just full of degens and losers.

The funny thing now is that guy is now a business man and he makes more money than 99% of ppl on 2p2, myself inc.
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Old 11-03-2018, 08:50 PM   #9
SuckMyTilt
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Re: Why Stake?

Quote:
Originally Posted by Alexo View Post
Besides points already raised, for me the most important one was the coaching aspect. I am currently staked by bitb and wouldn't consider getting staked by a different stable, as the reason I chose bitb was their very extensive video library and high quality coaching. So it looked to me like giving up half my profits for x amount of time would be beneficial as I would improve significantly as a player at a very high speed, something unachievable from studying alone, while also getting involved with and talking with some very talented and skilled individuals. I haven't regretted that choice for a moment.
That actually seems pretty decent!
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Old 11-03-2018, 08:51 PM   #10
SuckMyTilt
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Re: Why Stake?

Quote:
Originally Posted by BigBananas View Post
I used to live with some dude who was constantly getting staked in donkaments. He plays so ****ing bad i always thought to myself why the **** would anyone stake this guy.

After a few months of living with him he had changed his backer like 4 times. He had changed his pokerstars SN once then would sometimes use other peoples accounts for other sites like UB and FTP etc...basically when the makeup got too big he would just change backers and use other accounts to hide his identity.

Eventually he quit poker. I guess got too hard to find a stake when all your accs have a terrible record. I just always assumed after living with this dude that the staking world was just full of degens and losers.

The funny thing now is that guy is now a business man and he makes more money than 99% of ppl on 2p2, myself inc.
These are the things or sort of things rather that I can only find to read.. Which obviously you've gotta wonder why the he'll would staking be a thing with so many out there like it
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Old 11-04-2018, 02:26 AM   #11
Sir Huntington
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Re: Why Stake?

I can see it for ultra high stakes. There was a HU PLO player that was up millions and played on a stake, it makes sense to do so if you're at risk of easily going on a 2 milly downswing. Other than that it does seems like a -EV proposition.


I used to play COD with players MMT players that got staked pre black friday. For the most part they were just making maybe some beer money between winnings and paying the staker. Seems dumb.



I'm sure it's makes stakers tons of money.....
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Old 11-04-2018, 09:01 AM   #12
KT_Purple
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Re: Why Stake?

there have been thousands upon thousands of successful staking deals. we only hear about the ones that go sour, no one ever reports the positive experiences in NVG
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Old 11-04-2018, 11:52 AM   #13
PTLou
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Re: Why Stake?

Quote:
Originally Posted by KT_Purple View Post
there have been thousands upon thousands of successful staking deals. we only hear about the ones that go sour, no one ever reports the positive experiences in NVG
good point.

also Arty's analogy to bank loans is good one. Post 2008 financial meltdown in USA, banks now typically loan money only to people who can prove they don't REALLY need it. Yet, people still get loans for all sorts of reasons.

Seems to be same deal with horses. The ones that don't REALLY need it, but do it for various reasons can provide a predictable ROI for stakers.

Horses that REALLY need it are sort of like the junk bond market or pink sheet stocks. High risk / High reward.
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Old 11-04-2018, 04:29 PM   #14
Gzesh
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Re: Why Stake?

Quote:
Originally Posted by BigBananas View Post
I used to live with some dude who was constantly getting staked in donkaments. He plays so ****ing bad i always thought to myself why the **** would anyone stake this guy.

After a few months of living with him he had changed his backer like 4 times. He had changed his pokerstars SN once then would sometimes use other peoples accounts for other sites like UB and FTP etc...basically when the makeup got too big he would just change backers and use other accounts to hide his identity.

Eventually he quit poker. I guess got too hard to find a stake when all your accs have a terrible record. I just always assumed after living with this dude that the staking world was just full of degens and losers.

The funny thing now is that guy is now a business man and he makes more money than 99% of ppl on 2p2, myself inc.
Was he recently elected POTUS ?
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Old 11-04-2018, 09:41 PM   #15
getmeoffcompletely
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Re: Why Stake?

I think staking only really makes sense at the extremes. If you're a relative beginner playing micro-low stakes you benefit a lot from stable coaching and the amount you pay for it by profit splitting is small. If you're a high stakes crusher and for whatever reason have bankroll problems it makes sense to get staked for a period of time as it would allow you to get back on your feet faster than grinding back up from nothing.

However for the vast majority of players that are not at those extremes, staking at the "industry standard" 50% cut is a terrible proposition. At that level it's easy and quick to grind up a roll on your own and the coaching becomes much less attractive because you end up paying way too much for it.
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Old 11-04-2018, 10:30 PM   #16
PokerPlayingGamble
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Re: Why Stake?

Quote:
However for the vast majority of players that are not at those extremes, staking at the "industry standard" 50% cut is a terrible proposition.
Assuming winrate stays the same at higher levels, which is not always the case of course but can be under certain conditions (in fact higher stakes games could be significantly easier if you move from say a tough NLHE $25 pool online to a soft NLHE $500 pool live), so long as a horse plays games a single level higher their hourly is going to stay at least the same and they will have zero risk of losing money. Given that the certainty equivalent for poker gambling opportunities is probably around 50% even getting staked for a limit you can play on your own is probably worth it. Getting staked to play limits higher or significantly than you can play on your own means you get a higher or much higher hourly with no risk of downswinging.


Staking is win/win. The backer gets access to a very lucrative investment opportunity, and the horse gets into games that they otherwise would not be able to afford.
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Old 11-05-2018, 12:07 AM   #17
ProRailbird
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Re: Why Stake?

The people I know who stake other players are generally people who love to gamble but recognize pit games are a losing bet and aren't good enough at poker themselves to win. Putting a couple horses into a big tournament and watching their progress is a way for them to feel the rush of a gamble with a chance to actually win money over the long run.
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Old 11-06-2018, 05:38 PM   #18
mamelas
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Re: Why Stake?

Quote:
Originally Posted by SuckMyTilt View Post

In just don't quite see what and why?
Likely, the same reason Angel Investors, Venture Capitalists, etc invest in other companies/people.

If you didn't have the money and had an opportunity to play in a bigger game you knew you were +ev in, then wouldn't you want to take the shot available to you?
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Old 11-06-2018, 06:07 PM   #19
A_C_Slater
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Re: Why Stake?

I personally get staked because I'm not rolled for the biggest game in the room and my patrician aspirations require that I not be seen battling with the ham-and-eggers.
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Old 11-07-2018, 04:53 AM   #20
ohmyrage
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Re: Why Stake?

Quote:
Originally Posted by BigBananas View Post
I used to live with some dude who was constantly getting staked in donkaments. He plays so ****ing bad i always thought to myself why the **** would anyone stake this guy.

After a few months of living with him he had changed his backer like 4 times. He had changed his pokerstars SN once then would sometimes use other peoples accounts for other sites like UB and FTP etc...basically when the makeup got too big he would just change backers and use other accounts to hide his identity.

Eventually he quit poker. I guess got too hard to find a stake when all your accs have a terrible record. I just always assumed after living with this dude that the staking world was just full of degens and losers.

The funny thing now is that guy is now a business man and he makes more money than 99% of ppl on 2p2, myself inc.
Is your friend in Sales now?

There's a lot of skill required in getting staked and technical poker ability isn't that high on the list
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