How does poker backing work?

 

Poker backing, also known as poker staking, has two common ways it works:

  1.  A player sells pieces for a tournament.  He/she may want to play a $1,000 tournament and decide they only want to risk $500 on this particular tournament.  They can then sell 50% of the action to a buyer, and that person will receive 50% of any profits.
  2. A player decides to enter a deal for many poker tournaments at various splits
      1. The most common is 50/50 + makeup.  The backer puts up 100% of the money for tournaments and both sides ultimately end up with 50% of the profit.  When a player loses, they are given more money and this is added to makeup.  This makeup amount must be repaid from future winnings before any winnings are split.
      2. Less common is something like 90/10 with no makeup.  The backer puts up all of the money and receives 90% of any profits.  If the player loses, they owe nothing to the backer in the future.

At Pocarr we primarily deal with 50/50 + makeup deals.  Here’s how it works:

Mark is given $3,000 to play online poker tournaments.  If he loses $1,500 in his first session, we will send him a reload for $1,500 to get him back to his initial $3k.  He now has $1,500 makeup.  If he loses $1,000 the next session, we again send $1,000 and he now has $2,500 makeup.  Mark wins $10,000 the next day.  The math would look like this:

$10,000 – $3,000 starting funds – $2,500 makeup = $4,500 profit

$2,250 for player to cashout.  He has now profited $2,250.

$2,250 + $2,500 makeup = $4,750 to send to Pocarr.  Pocarr has now profited $2,250 (-$2,500 losses + $4,750 received back = +$2,250).

At this point, Mark is back with his $3,000 initial funds to play with and both sides have profited $2,250–the goal of our 50/50 deal.

Duration of these agreements is decided beforehand (# of games/months) and cannot end until makeup is zero. At that point, the player would return the starting funds.