Horses - are stables a good thing

[AlexMartin]

Iv been staked for the last 8 years, via various people and the relationship is the most important thing. If you are really struggling a good backer will help you out, its a human industry after all and based heavily on trust. When that trust is established there is way less likelihood of any horses reneging on a deal, not playing optimally and im sure we have all heard of worse. Reputation is ultimately key in this industry, for backers and horses.

[DungBeetle]

What business doesn't carry over losses?

Poor derivatives traders when they move from job to job.  Same score for horses I suppose.  Get in make up and if you can get someone else to back you then losses wiped out. 

No idea how horses can complain - they're being given free options by stables.

[Rexas]

Not sure if my comment will be worth anything (but I'm going to post it anyway)

I've been staked quite a bit, either by selling action or by being part of a stable, and I'm very glad staking is around. As I understand it, in my current deal, my backer can fire me whenever he likes, at which point any make up is written off. I can also quit whenever I want, but if I want to go and do something else then I have to pay back any make up that I am in. This seems very reasonable to me, as I get to play stakes I otherwise wouldn't be able to, and have access to a network which offers coaching and general support whenever it's needed. I don't see this as being backed by some sort of glorified loan shark, I see it is an investment on both sides. My backer is risking his money on me, but at the same time I'm risking whether or not I'm a winning player and betting that I am. By taking on the staking agreement I feel like I accept that if I'm not a long term winner, I have to pay for that. I mean, it's not as if I'll get dropped if I lose for a month or two, if I was to lose for an extended period I would be offered help and would only be dropped as a last resort. To me, this arrangement is mutually beneficial and offers people opportunities that they wouldn't otherwise have.

[AlunB]

What business doesn't carry over losses?

Poor derivatives traders when they move from job to job.  Same score for horses I suppose.  Get in make up and if you can get someone else to back you then losses wiped out. 

No idea how horses can complain - they're being given free options by stables.

Prop trading is actually a really good comparison. I didn't think of that. Aren't most salaried with bonus? Maybe that's the best solution for staked players. Salary plus bonus.

[Simon Galloway]

Ok, a few comments

First of all, for those new in, some previous discussion on it, quite interesting to look back and see what has happened in 3 years or so.

http://blondepoker.com/forum/index.php?topic=58457.0
http://blondepoker.com/forum/index.php?topic=57621.0

Next up, from time to time I get a PM asking me about staking.  In just about every instance, the enquirer has considered themselves to be a staker.  But all they are/were really doing was buying an occasional piece of a package, putting a friend in the SM, etc.  I think most of the serious contributors on this thread would not consider that staking.. that is puntering.

"A bank is an organisation that will lend money to anyone that can prove they don't need it"

Similarly, a backer should be willing to lend money to players to play at a buyin/level where they really shouldn't need it.  This is either going to be a short term rescue package until the horse is solvent again, or as a longer term arrangement, providing that both parties are getting an acceptable bang for their buck from it.  In both cases, both sides have options.  The backer can choose to invest that $ somewhere else and the player can choose to play lower for themself/play staked for someone else/stop playing/whatever.  If you can find terms that make sense to both sides, you may find an equilibrium which allows a mutually beneficial deal to continue for months/years.

Not going to make this war and peace, but some cliffs:

The player
Even as a backer (or particularly as a backer, perhaps) I have the utmost respect for players that decide to play lower for themself asap, grind out a replacement BR and do their own thing.  If I can help them achieve this plan, and both sides know exactly what that plan is, then it more or less IS a loan.  It doesn't come with the same sureities of loans underwritten against property, there is almost certainly no recourse to be had from a court of law and so it is perfectly reasonable to be providing $$ at a higher risk for a higher return then Tesco Bank might be prepared to charge you.  Only we all know Tesco won't approve your loan request to go on a mad spinup, and many players would fail any kind of credit check, even if they did claim they were using it for "home improvements."

For players to want to stay beyond the short term, they should need, and receive, more.  Access to coaching, to like-minded players, to sensible IRL advice, whatever it is that they want.  Yet many players do not seek this, skip free coaching sessions, make continually poor choices away from the tables and effectively perpetuate a situation where they need staking indefinitely.

The backer
There are no real barriers to entry, so if everyone is doing it wrong.. pull out some $$ and offer some stakes.  2+2 and various skype channels are chokka with guys that did exactly that.... and now have a selection of horses available at a generous discount.
Most backers are players, or ex players, themselves.  One major problem is that they mostly have no business accumen, having little exposure to anything other than poker.  Take a look at the cast of High Stakes Poker, just about all of them are doing their niags in lifetime business dealings.
Some backers tried to compete on price, offering golden handshake deals, expiring MU deals, wages, private health care no doubt.  I don't hear much about any of these nowadays, I can only assume there were some rude awakenings.
To be successful, it really does need to be a full time effort, some guys just won a bunch and decided to start staking mates ~ some from Blonde too, and I think a mixture of underestimating how much work was involved as well as overestimating the amount of effort that everyone else would need to put in led them to either knock a serious hole in the budget or otherwise just decide it wasn't worth it.  A USP is never a bad idea.  WHile standard staking deals are fairly ubiquitous, it doesn't hurt to have P5/sharkscope crystal star-type guys for those exact game types as a method to attract and retain good calibre horses.  The lifetime value of the improvements a backer can help give a player are considerable.

The industry

Everyone else writes about how it is for the backer or the player, but not much gets written about the effect on the industry at large.  I readily admit I haven't given it much thought either

[DungBeetle]

What happens when the horse starts off on a heater and then starts losing?  Does the stable claw back cash from the horse?

[arbboy]

Not sure if my comment will be worth anything (but I'm going to post it anyway)

I've been staked quite a bit, either by selling action or by being part of a stable, and I'm very glad staking is around. As I understand it, in my current deal, my backer can fire me whenever he likes, at which point any make up is written off I c.an also quit whenever I want, but if I want to go and do something else then I have to pay back any make up that I am in. This seems very reasonable to me, as I get to play stakes I otherwise wouldn't be able to, and have access to a network which offers coaching and general support whenever it's needed. I don't see this as being backed by some sort of glorified loan shark, I see it is an investment on both sides. My backer is risking his money on me, but at the same time I'm risking whether or not I'm a winning player and betting that I am. By taking on the staking agreement I feel like I accept that if I'm not a long term winner, I have to pay for that. I mean, it's not as if I'll get dropped if I lose for a month or two, if I was to lose for an extended period I would be offered help and would only be dropped as a last resort. To me, this arrangement is mutually beneficial and offers people opportunities that they wouldn't otherwise have.

This is the bit that does make it sound like a loan shark though from an outsiders point of view.  Let's say you are skint and get £20k in the hole in make up from your staker and have just had enough of poker (girlfriend asking you to stop playing because it is ruining your relationship etc or affecting your job) but your staker is going to stake you forever and forever to get his money back.  You have no way of paying the £20k back as you don't have any cash.  What happens then?  If you have to keep playing until you have won it back.  If this agreement is strictly enforced you might as well have got a loan yourself (if you could obviously) as you are still on the hook for the money but you only get to keep 50% of the rewards if you had won.  I think this is where the loan shark idea comes from by the original poster.

[TightEnd]

seperate issues

- where would the poker industry be without staking?

- could or should it be regulated, and how?

[Rexas]

Not sure if my comment will be worth anything (but I'm going to post it anyway)

I've been staked quite a bit, either by selling action or by being part of a stable, and I'm very glad staking is around. As I understand it, in my current deal, my backer can fire me whenever he likes, at which point any make up is written off I c.an also quit whenever I want, but if I want to go and do something else then I have to pay back any make up that I am in. This seems very reasonable to me, as I get to play stakes I otherwise wouldn't be able to, and have access to a network which offers coaching and general support whenever it's needed. I don't see this as being backed by some sort of glorified loan shark, I see it is an investment on both sides. My backer is risking his money on me, but at the same time I'm risking whether or not I'm a winning player and betting that I am. By taking on the staking agreement I feel like I accept that if I'm not a long term winner, I have to pay for that. I mean, it's not as if I'll get dropped if I lose for a month or two, if I was to lose for an extended period I would be offered help and would only be dropped as a last resort. To me, this arrangement is mutually beneficial and offers people opportunities that they wouldn't otherwise have.

This is the bit that does make it sound like a loan shark though from an outsiders point of view.  Let's say you are skint and get £20k in the hole in make up from your staker and have just had enough of poker (girlfriend asking you to stop playing because it is ruining your relationship etc or affecting your job) but your staker is going to stake you forever and forever to get his money back.  You have no way of paying the £20k back as you don't have any cash.  What happens then?  If you have to keep playing until you have won it back.  If this agreement is strictly enforced you might as well have got a loan yourself (if you could obviously) as you are still on the hook for the money but you only get to keep 50% of the rewards if you had won.  I think this is where the loan shark idea comes from by the original poster.

I don't know, because I haven't asked, but I imagine if I wanted to stop playing poker completely then I would be able to do this and the backer would forfeit the make up. Although I imagine if it got to that stage, I would be dropped before it came to that, be it for lack of volume or consistently poor results. I mean, to get to a point where you're in so much make up that there's no way you'll ever be able to pay it back normally and get to the stage where you never, ever want to play again, there have been some failings on the backers part. They won't have managed you correctly, i.e. they will have allowed you to keep on playing to a point where you're basically on permanent tilt and have very little chance of being mentally able to grind it back.

[arbboy]

Not sure if my comment will be worth anything (but I'm going to post it anyway)

I've been staked quite a bit, either by selling action or by being part of a stable, and I'm very glad staking is around. As I understand it, in my current deal, my backer can fire me whenever he likes, at which point any make up is written off I c.an also quit whenever I want, but if I want to go and do something else then I have to pay back any make up that I am in. This seems very reasonable to me, as I get to play stakes I otherwise wouldn't be able to, and have access to a network which offers coaching and general support whenever it's needed. I don't see this as being backed by some sort of glorified loan shark, I see it is an investment on both sides. My backer is risking his money on me, but at the same time I'm risking whether or not I'm a winning player and betting that I am. By taking on the staking agreement I feel like I accept that if I'm not a long term winner, I have to pay for that. I mean, it's not as if I'll get dropped if I lose for a month or two, if I was to lose for an extended period I would be offered help and would only be dropped as a last resort. To me, this arrangement is mutually beneficial and offers people opportunities that they wouldn't otherwise have.

This is the bit that does make it sound like a loan shark though from an outsiders point of view.  Let's say you are skint and get £20k in the hole in make up from your staker and have just had enough of poker (girlfriend asking you to stop playing because it is ruining your relationship etc or affecting your job) but your staker is going to stake you forever and forever to get his money back.  You have no way of paying the £20k back as you don't have any cash.  What happens then?  If you have to keep playing until you have won it back.  If this agreement is strictly enforced you might as well have got a loan yourself (if you could obviously) as you are still on the hook for the money but you only get to keep 50% of the rewards if you had won.  I think this is where the loan shark idea comes from by the original poster.

I don't know, because I haven't asked, but I imagine if I wanted to stop playing poker completely then I would be able to do this and the backer would forfeit the make up. Although I imagine if it got to that stage, I would be dropped before it came to that, be it for lack of volume or consistently poor results. I mean, to get to a point where you're in so much make up that there's no way you'll ever be able to pay it back normally and get to the stage where you never, ever want to play again, there have been some failings on the backers part. They won't have managed you correctly, i.e. they will have allowed you to keep on playing to a point where you're basically on permanent tilt and have very little chance of being mentally able to grind it back.

Obviously the remarks made weren't specifically about yourself.  Just want to make that clear!  I was talking generally about the whole subject.  I suppose my point is the verbal agreement is worthless then if you can just walk away from it in such a manner even if your staker is willing to keep putting the money up front to get a return on his investment.  The deeper you are in make up the more incentive there is in some ways for the staker to keep punting you because everything you win is his.

[Rexas]

Not sure if my comment will be worth anything (but I'm going to post it anyway)

I've been staked quite a bit, either by selling action or by being part of a stable, and I'm very glad staking is around. As I understand it, in my current deal, my backer can fire me whenever he likes, at which point any make up is written off I c.an also quit whenever I want, but if I want to go and do something else then I have to pay back any make up that I am in. This seems very reasonable to me, as I get to play stakes I otherwise wouldn't be able to, and have access to a network which offers coaching and general support whenever it's needed. I don't see this as being backed by some sort of glorified loan shark, I see it is an investment on both sides. My backer is risking his money on me, but at the same time I'm risking whether or not I'm a winning player and betting that I am. By taking on the staking agreement I feel like I accept that if I'm not a long term winner, I have to pay for that. I mean, it's not as if I'll get dropped if I lose for a month or two, if I was to lose for an extended period I would be offered help and would only be dropped as a last resort. To me, this arrangement is mutually beneficial and offers people opportunities that they wouldn't otherwise have.

This is the bit that does make it sound like a loan shark though from an outsiders point of view.  Let's say you are skint and get £20k in the hole in make up from your staker and have just had enough of poker (girlfriend asking you to stop playing because it is ruining your relationship etc or affecting your job) but your staker is going to stake you forever and forever to get his money back.  You have no way of paying the £20k back as you don't have any cash.  What happens then?  If you have to keep playing until you have won it back.  If this agreement is strictly enforced you might as well have got a loan yourself (if you could obviously) as you are still on the hook for the money but you only get to keep 50% of the rewards if you had won.  I think this is where the loan shark idea comes from by the original poster.

I don't know, because I haven't asked, but I imagine if I wanted to stop playing poker completely then I would be able to do this and the backer would forfeit the make up. Although I imagine if it got to that stage, I would be dropped before it came to that, be it for lack of volume or consistently poor results. I mean, to get to a point where you're in so much make up that there's no way you'll ever be able to pay it back normally and get to the stage where you never, ever want to play again, there have been some failings on the backers part. They won't have managed you correctly, i.e. they will have allowed you to keep on playing to a point where you're basically on permanent tilt and have very little chance of being mentally able to grind it back.

Obviously the remarks made weren't specifically about yourself.  Just want to make that clear!  I was talking generally about the whole subject just to make it clear.

Yh sorry I think I worded that poorly, I know what you meant

[Simon Galloway]

Not sure if my comment will be worth anything (but I'm going to post it anyway)

I've been staked quite a bit, either by selling action or by being part of a stable, and I'm very glad staking is around. As I understand it, in my current deal, my backer can fire me whenever he likes, at which point any make up is written off I c.an also quit whenever I want, but if I want to go and do something else then I have to pay back any make up that I am in. This seems very reasonable to me, as I get to play stakes I otherwise wouldn't be able to, and have access to a network which offers coaching and general support whenever it's needed. I don't see this as being backed by some sort of glorified loan shark, I see it is an investment on both sides. My backer is risking his money on me, but at the same time I'm risking whether or not I'm a winning player and betting that I am. By taking on the staking agreement I feel like I accept that if I'm not a long term winner, I have to pay for that. I mean, it's not as if I'll get dropped if I lose for a month or two, if I was to lose for an extended period I would be offered help and would only be dropped as a last resort. To me, this arrangement is mutually beneficial and offers people opportunities that they wouldn't otherwise have.

This is the bit that does make it sound like a loan shark though from an outsiders point of view.  Let's say you are skint and get £20k in the hole in make up from your staker and have just had enough of poker (girlfriend asking you to stop playing because it is ruining your relationship etc or affecting your job) but your staker is going to stake you forever and forever to get his money back.  You have no way of paying the £20k back as you don't have any cash.  What happens then?  If you have to keep playing until you have won it back.  If this agreement is strictly enforced you might as well have got a loan yourself (if you could obviously) as you are still on the hook for the money but you only get to keep 50% of the rewards if you had won.  I think this is where the loan shark idea comes from by the original poster.

This is where experience comes in.  There are a lot of players that will deliberately start losing, or just playing terrible volume, whilst always at the top of their permitted buyins, hoping they magi-bink out of it, and otherwise laying siege on the backer's bankroll.

Flip side of the coin, there are backers that will blindly try and hold a horse to a schedule that clearly doesn't make sense and clearly isn't going to work out for either side, short of getting very very lucky, which is never the best business plan.  That's where experience suggests that not taking turns to quote the contract to each other might be a good start and agreeing another solution.  When I've been asked to arbitrate in some of these situations, the backer hasn't really helped themselves by not applying any sanity tests to the situation pre agreement.  "so... the applicant is married with 4 kids, lives in Wembley and is playing the $3.50 45 mans for sole source of income?  And you didn't anticipate any problems? OK."

[Rexas]

Well, having asked, apparently if I wanted to leave and not play then I can do that without having to pay back make up. I would like to think there's a fair amount of trust in my particular arrangement, and so I wouldn't ever do that and I think there'd be some sort of intervention before I got into the sort of situation arbboy described, but the fact that the option is there has to make it less loan sharky, right?

That said I think I'm really lucky to be in my situation.

[Simon Galloway]

I don't know, because I haven't asked, but I imagine if I wanted to stop playing poker completely then I would be able to do this and the backer would forfeit the make up. Although I imagine if it got to that stage, I would be dropped before it came to that, be it for lack of volume or consistently poor results. I mean, to get to a point where you're in so much make up that there's no way you'll ever be able to pay it back normally and get to the stage where you never, ever want to play again, there have been some failings on the backers part. They won't have managed you correctly, i.e. they will have allowed you to keep on playing to a point where you're basically on permanent tilt and have very little chance of being mentally able to grind it back.

Yes a smart backer will have anticipated this from a while out and tried to steer the horse into making better choices.  Yet for balance, a lot of horses do seem to have a lemming-esque propensity to send themselves (and their backers) skint by insisting on playing the wrong games.  I'd like £1 for every time I have heard "but you don't understand variance" followed 3 months later by "ok shit, perhaps you understood variance better than me, I'm now broke, can I have a loan"

Obviously the remarks made weren't specifically about yourself.  Just want to make that clear!  I was talking generally about the whole subject.  I suppose my point is the verbal agreement is worthless then if you can just walk away from it in such a manner even if your staker is willing to keep putting the money up front to get a return on his investment.  The deeper you are in make up the more incentive there is in some ways for the staker to keep punting you because everything you win is his.

Deep in MU, ----> 100% of the returns are for the backer, a great mathematical situation for the backer, yet also the reason that many backers get sent spinning.

[shipitgood]

seperate issues

- where would the poker industry be without staking?

- could or should it be regulated, and how?

It would be next to impossible to regulate.

In relation to point one, it would be easy to argue that it's detrimental to the poker ecosystem.

The more and more players getting "staked" is just taking more and more money out of the poker ecosystem at a quicker rate versus if staking did not exist.

Players, if there is decent coaching involved, will also be getting better at a quicker rate. Also the proliferation of staking. to some extent or another, will have sped up the evolution of online poker.

You constantly hear players talking about games getting harder, certainly over the next couple of years this trend will continue, and "staking" will be one of the reasons behind that.