In part 1, we talked about the profitability of staking, what to look for in potential horses, and how to get started staking. Today we continue the discussion with topics including scammers, handling long downswings, and player retention.
Q: As a staker, how often are you scammed?
A: First, if you stake long enough, you will definitely get scammed. If you manage to keep the scam rate under 5% (i.e. having any money stolen from you at some point during the stake by one in twenty players you send money to), then you're doing a very good job. If your scam rate is 10% or higher, then you're probably not taking enough precautions.
There are two types of scams: Ones where the player takes the initial bankroll and immediately runs and ones where a longer-term player steals from you.
Q: How can I prevent having stake funds immediately stolen?
A: There are several steps to take to prevent this type of scamming:
- Search for the player on poker/staking forums, particularly the 2+2 Negative Feedback thread.
- Google the player's screenname and real name to see any other online discussion of them.
- See if they have any online presence like a blog or a large number of forum posts.
- Look for red flags, like the player providing inconsistent information or seeming desperate.
- And of course, ask them for references.
The larger the potential investment, the better the references should be. A reputable past backer who speaks highly of the player is ideal. In this case, however, ask the backer and the horse separately why the stake ended previously, and why the two aren't resuming the staking relationship now.
Also very useful are a history of trades and/or selling action with no problems.
Even a good posting history can mean something. Someone who regularly posts decent content on 2+2 or other forums is at least a part of the community and less likely to scam compared to someone with no online presence. For a smaller investment, that might be good enough to start a stake with a winning player who ticks other boxes.
Q: What are some scams you faced, and how could you have prevented them?
Here are two examples of scams I faced, both earlier in my staking career.
Mistake 1: Sending Too Much Money
The first time I got scammed was very soon after I began staking. A Croatian heads-up SNG player applied for a stake. He had great results but no references and only minimal ties to the poker community. I sent him $1,500 to play at $50 HUSNGs. He took the money and ran.
Doing any stake with this player was marginal. But more important, it was a tremendous mistake to send him $1,500. I should have either passed, or asked him to start off at lower stakes and then sent him a much shorter bankroll – at most a few hundred – until trust had been established.
I'll elaborate on this topic in the next question, but it's very important to minimize how much you send an unproven player at the start.
Mistake 2: Lacking Necessary Skepticism
A number of years ago, a player on 2+2 applied for a stake. His 2+2 screenname matched his Stars screenname, which had excellent results. He had his German ex-backer email me a reference. I agreed to put him in the Full Tilt 90-mans. I made the transfer, and he instantly fell out of contact.
This was simply an instance of me being gullible, and seeing what I wanted to see when there was seemingly an opportunity to stake a very winning player. It's easy to create a 2+2 account in the same name as a known player. It's even easier to create an email account and type out a reference for yourself.
Among other things, I should have asked for proof that he owned the Stars account, such as him sharing his screen while logged in to Stars and going to the cashier. And a reference letter from a random email account should have had no influence.
Always ask yourself: “Is it possible that I'm being fooled right now?”
Q: How much money should I send my new horse?
A: Suppose you're staking a player for 180man SNGs up to $15. That player might need a $5,000 bankroll if they were playing on their own roll. Send them $600 or so instead – just enough that they're unlikely to need more during the course of a single bad day. Then you can send them $600 reloads when they need it. Once you have a good relationship with the player, you can increase this base roll, but start with it as low as possible unless you have good reason to trust the player.
Doing so will limit your loss if the player runs, and also free up your funds to invest in other players.
Again, if that $15 180man player has no references or presence in the online poker community, no matter how good their results are, don't send them an amount like $600. You might offer to start them with a $100 roll for the $2.50s, explaining you'll move them up as soon as you have a good relationship with them. If they decline, let them go.
Q: What should I require of the horse in terms of financial reporting?
I suggest requiring, in the contract, a weekly report that has a screenshot of their cashier page; transfer history set to at least 14 days; and an audit going back a month. On Stars at least, the audit is the final proof. I've had players fake screenshots before. But if they're playing high-stakes PLO, transferring to friends, or making unauthorized withdrawals, they can't hide it from an audit.
I don't look through all the audits every week. But if I have a reason to be suspicious – such as a large discrepancy between reported results and Sharkscope results, or abnormally fast losses – I'll go through the player's audit and see for myself. I'll also select a set number to go through at random.
Q: My horse asked me for a loan. What do I do?
A: Decline. A large percentage of loans will never be repaid. After all, doing so requires not just that the player get their finances on track for day-to-day living, but get far enough ahead that they can start making loan repayments.
It's fine to let players who are working hard chop profits while they're in makeup. But I recommend avoiding outright loans.
Q: I have a great horse who wants to end the stake. What should I do?
A: While it may be inevitable that your player leaves, you should begin by talking with them about why they want to go. Doing so may allow you to save the stake by offering a better split (if that's worth it to you), adding another game type, or providing a perk like coaching that the player wants.
Also, ask yourself the question: Is it really in my player's best interest to stay on the stake? If you think the answer is “Yes,” then by all means try to talk them into staying. But if the answer to that question is “No,” such as if they have a good IRL job offer, then let them go – so long as there's no makeup.
Q: What do I do if one of my players keeps losing … should I just keep on reloading him?
A: Begin by assessing if the downswing has one of these two causes.
Ask yourself if something with the player has changed. A player can of course stop winning when they move up in buy-in or switched formats. They can also stop winning if they're playing more tables, changed their schedule, are having IRL problems (financial, relationship), etc.
You want to be completely convinced the player isn't withdrawing from the account, transferring, or playing unauthorized games. Fortunately, this is relatively easy to make sure of with the audit.
If you're confident that no important change has occurred, and that the horse isn't stealing from you, then you may be left with a difficult decision. Some naturally lean one way or another. A very common thing I hear from stakers is about how important it is to limit losses. The idea being, for example, that a stake that ended in a $10,000 write-off might have ended at $5,000 instead if the staker had only been more vigilant.
It's an appealing idea, and one that definitely has merit in a lot of situations. But natural downswings can last a long time. If you end a stake just to “limit your losses,” and the player is still a solid winner having a really bad run, then you miss out on both a full recovery – not having to take any write-off at all – as well as the full future earning potential of the player.
My own approach is to look hard at possible change/theft reasons for the loss. If I can't find any, and the player's games continue to look strong when I review them, then I tend to continue further than most with a stake. That tendency has resulted in some large write-offs where others would have lost much less money. It's also resulted in some full recoveries where others may have taken a significant write-off instead.
Q: My player wants to move up. Should I let him?
A: Players winning at one buy-in will often not be winning at a higher buy-in. And if they do stop winning, the makeup will be higher when you take the write-off because of the increased stakes. So before agreeing to do this, make sure that they have a very consistent record beating their current level, and that you're confident their game is strong enough.
A good first step is often to have them shot-take the higher buy-in game at times when they're doing well and in profit. Even if they don't get in a large sample that way, it can still give both you and the player some indication of whether they're ready before it becomes part of what they normally play.
If you're still unsure whether your player is ready for the higher level, then decline their request, even if it means they leave the stake.
Q: My horse is losing. Can I make him play lower?
A: You can put anything you like in the contract, and let players choose if they want to sign. But I believe that if you let a player get into makeup playing one buy-in, it's not fair to force them to grind out of it at lower buy-ins. It can take a very long time to grind out of a deep hole, particularly when you have to play lower to do that.
My belief is that if you really think your horse should drop down despite him being allowed to play higher previously, then you need his agreement. The best way to get this is usually a deal that allows them to devote a certain amount of their “profits” at the lower buy-in to makeup, and then chop the rest, so that they get regular money from the stake despite being in makeup.
Q: What can I do to be a good backer to my players?
A: This question might not qualify as an FAQ, but anyway … glad you asked!
While there are definitely bad horses (and backers) out there, it's important to remember that most of your players are working hard to make both you and them money. They need to make a living, pay bills, and support families just like you do.
So try to look at things from their perspective. For example, if a long-time horse is on a big downswing, your focus can easily be that you're losing money every week. But it's likely a very difficult time for your horse too.
If they want to talk with you about anything, they should be able to contact you easily over Skype or email. Fulfill reload requests quickly. If they reach out to you for help with their game or any type of advice, do your best to get them what they need.
Be there for your players and support them when they need it.I think we've now covered most of the important topics for getting started as a backer. I hope you've enjoyed this two-part series and good luck in your staking.