Poker is a relatively unique profession in that many players will borrow money from others in order to continue their careers. The technical term for this is called backing but in reality, those that put up the money for backing are essentially investing in poker players.
There are different ways that this is done. Some players have agreements setup with a specific backer while others will either sell pieces of their action or use backing sites such as YouStake to fund their tournaments.
Personally, I have been on both sides of the coin. I have been a player that has considered getting a backer and I have backed players in the past. I’ve also watched how the backing game has evolved over the years and sometimes I’m amazed at amount of dead money thrown around in the name of backing.
If you are thinking about investing in poker players, whether directly or through a backing site, you need to look at the transaction from all angles. Below are a few things to consider when investing in poker players.
Look at Their Results and Do Research When Possible
If you are considering whether to back a particular player, do your research on their results whenever possible. Some players will come to you and try and sell you on their “tournament history” and when you go to look them up, they have just a couple of cashes in small events.
Common tactics I have seen are players that will hype up their results in small casino tournaments where you have little or no record keeping. If this is the majority of their “success,” be careful.
An exception is if a player can produce records of their wins, such as 1099s or tax returns. If they have records to back up their claims, great. That also speaks a bit to their character as they are doing what they should to pay their taxes. (A good sign they may honor your deal.)
If you can’t verify a player’s “success” in tournaments, you probably want to stay away.
What is Their Reputation?
Poker has their own share of deadbeats when it comes to backing. There’s no need to mention any specific names, but if you do some Google searches, you will find stories about various players.
With that said, if you are considering backing a particular player, check out their reputation, especially if they are an online poker player. If they have a negative reputation, you will usually find out quick. Sadly, those with a good rep don’t get the same hype.
If a player has decent results and there’s no negative information on them, then this is a case where no news may be good news. Maybe you can be the person to give them some positive street cred.
Is Their Only Option for Playing With Your Money?
Another theme that is becoming too common is players that are being backed for everything they play. If they are not backed, they cannot play at all. I can think of examples of several “known” players or pros over the years that could not even play in a $120 buy-in tournament unless someone put them in.
Backing is supposed to reduce variance, not eliminate it. If a player is looking to have you fund their poker career, you need to look at why they are broke. Chances are either they either are not as skilled as they claim or they have leaks that keep them broke.
I much prefer to back a player that lets it be known that they are playing an event regardless and is forced to sometimes prove it. Even if they are being backed for low buy-in events, at least they are willing to risk their own money and are just trying to cut down on their expense rather than freeload off someone else’s bankroll.
Beware the Flash in the Pans
Tournament poker has an abundance of flash in the pan players. They go on an amazing run and win high five, six or even seven figures in an event. After that massive score, they don’t come anywhere close but they are determined to stay in the game and will use that big score as a way to be backed.
Back in 2007, I watched the late Elix Powers use this tactic at the World Series of Poker. I was playing in a Stud 8 satellite and he comes up to one of the guys at our table trying to get the money to play in a Limit Hold’em Satellite.
His main selling point was, “Don’t you know I made TV a few years back?” After a few unsuccessful minutes, he walks away without a stake. As someone pointed out at that table, that TV final table that Elix made was one of only two significant scores in his tournament career. I heard Elix use that on and off over the next couple of years, including trying to get someone to give him $20 to play $1-$2 limit at the Bike in LA.
If the person you are thinking about backing has one massive score from a few years ago and not much since, you’re gambling when you back them. Maybe they will get lucky and lighting will strike twice. More often than not, they will just continue busting or underperforming.
Set a Limit to Start When Investing
You have looked over this player and their results are satisfactory or there are other reasons you want to back them (such as they are a good cash game player that is transitioning to tournaments). Now you have to decide how much you want to invest.
How much you invest is dependant on the level of risk you wish to take and the agreement you have in place. Are you setting up an agreement with the player or are you planning to back them through a site?
If this player has a solid record of performance, you might want to risk more than on a player who doesn’t cash as often. You may only want to back them in events that you feel are best suited for their ability or in series that they have a track record of success.
Regardless of what you decide, consider setting a limit when you first start investing in a player to see how they perform. Think of it as a trial run to see how they are performing. This limit could be a set dollar amount or a set number of tournaments, like 10 to 20. After this initial limit, evaluate their performance and go from there.
Regularly Evaluate and Don’t Get Stuck With an Under-Performer
You pick a player to invest in and during the first year you back them, they hit a couple big scores and you get a sweet ROI. These results may convince you to continue backing them no matter what happens, but that’s the wrong course of action.
Continue to evaluate the players you are investing in and make sure they are worth the investment. Naturally, they won’t continue to make the same returns year-after-year but they should be a positive ROI. If they are not and aren’t showing signs of improvement, you need to consider cutting them lose.
While we get attached to players and want to root them on, investing in poker players is still a business transaction and you can’t get stuck funding an underperforming player. If it is time to let them loose, move on.