Definition of Poker Staking
The term poker staking, or simply staking, refers to the act of putting cash up on behalf of a poker player in the hopes that he or she wins. The person who puts the cash up is the backer. The backed poker player is the horse.
Staking is an investment. Prior to play, the backer and the horse negotiate a percentage, and then the backer takes that percentage of all winnings, which can be quite lucrative in high-profile tournaments and high-dollar ring games.
The split is usually high, at least 50 percent but sometimes higher, because the backer is assuming all of the risk. The risk is considerable; buy-ins for major tournaments top $10,000, and ring games often require much more.
In modern staking scenarios, the participants often use a rule of thumb: the winnings percentage is equal to half the percentage of the backing paid. If the backer backs 100%, then he gets 50%; if he backs 50%, he only gets 25%.
In addition to the percentage of winnings due, the horse, sometimes called the “stakee,” must pay the stake back to the backer in full. The order in which the horse pays the stake and figures the winnings is extremely important.
Consider a scenario with a 50/50 split, a $1,000 buy-in and $2,000 in winnings:
In the standard scenario, the horse pays the $1,000 stake back to the backer. He then figures the winnings: There is $1,000 remaining, so the backer gets $500, and the horse gets $500, an equal share of the winnings for each.
Backers sometimes demand “stakeback,” which means that the winnings are figured first. In other words, the backer gets his $1,000 share of the winnings and the $1,000 stake while the players walks away with nothing at all.
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