The subject of staking in poker, or any gambling related business, is tricky. If it’s handled the wrong method, friendships are broken, money is lost, and nobody is happy. If done right, however, it could be a lucrative investment for the backer, and a valuable tool for the one being backed.
Some tips about what a simple poker staking agreement might look like. The Staker will give(stake) the Stakee a certain amount of money to gamble with. By the end of a pre-defined period of time, the Stakee can pay back the Staker the initial “stake”, and also a certain percentage of the profits.
You will find two important parts to this agreement. Both of these issues can lead to one party in the agreement obtaining a bad deal, even when neither party intends to harm the other. The initial part that is important is the amount of time. The second is the percentage of the gains to be paid back.
Many people make the mistake of creating the period of time too short. Poker, and any kind of gambling, involves luck. Even if you are skilled and have a benefit, there is a variable of luck. You won’t always win. Take, for example, the most popular agreement of someone being staked for starters night of play. There’s a $200 no-limit hold’em game. By the end of the night time, the initial stake is paid back, and the profit is split 50/50. The person being staked is a good player, they double their buy-in about 70% of the nights they play, and lose their buy-in only 30% of the nights they play. This might seem just like a good proposition for the Staker, but let’s go through the math https://bola228.world.
70% of that time period, the Stakee will double his buy-in, and have $400 at the end of the night. The Staker would get his original $200 back, plus 50% of the gains, or $100. The Stakee would get the other $100. So, 70% of that time period the Staker profits $100, and 70% of that time period the Stakee profits $100.
30% of that time period, the Stakee will miss his buy-in, and have $0 at the end of the night. The Staker will take the entire $200 loss. So, 30% of that time period, the Staker will miss 200, and the Stakee can have lost nothing.
Since 70% of that time period, the Staker profits $100, and 30% of that time period, the Staker loses $200. His average expected return is (.65)(100)+(.3)(-200) = (65) + (-70) = -5. With this specific deal, even although Stakee is a good player and can beat the game 65% of that time period, the Staker LOSES money!
If they made the exact same deal, but rather of splitting the gains after 1 night, the split the gains after 2 nights, then the offer is much better for the Staker. In the event that you go through the math, you can find 4 possible outcomes. He could win both nights, lose the very first win the 2nd, win the very first lose the 2nd, or lose both. The occasions he wins one night and loses the following, there is no profit or loss, so we are able to ignore that outcome since it’s zero. The percentage chance winning both nights could be .65*.65 = .4225, or just around 42%. The chance of losing both nights could be .35*.35, or just around 12%. The others of that time period, it is break-even win one lose one. So, 42% of that time period, they’ll split $400 in profit 50/50. The staker will get $200 42% of that time period, for an average profit of $84. He will miss $400 about 12% of that time period, for an average loss of $48. His total average expected profit could be $36. So, simply by adding one more day to the time frame, the Staker’s winnings went from -$5 to +$36. The long run a stake, the safer it is for the Staker. The shorter the definition of the stake, the larger percentage of the gains the Staker must replace the loss. There are more in-depth articles and discussions at www.snggrinder.com [http://www.snggrinder.com] regarding staking deals for poker, blackjack, or other gambling games.