Let's Make a Deal...

I have been on both sides of the staker-stakee relationship.  In recent years, I have been in the middle - negotiating between both parties to try to find the best solution.

It's not as simple as debating between 50-50 and 60-40.  If the stakee is winning, this is easy to negotiate.  The biggest issues have to do with accepting the realities of poker - mainly:  poker is a Looooong-term game, and the stakee can run bad.  Very bad.

Here are three items on my checklist when I arrange something between a staker and stakee - and I always make sure these are CLEAR BEFORE a single session is played - feel free to add items that you feel are of utmost importance...


1. Make sure the staker accepts the reputation of the stakee.
The basic phrase you are looking for the staker to say here is "I will trust this guy."   TOO MANY times I have had to listen to a staker come to me saying "What the bleep is this guy doing?  I thought he could play?"

Touch-move.  I am very black-and-white with trust.  You can't take it back.  You cannot tell a guy you trust him and then question him later just because he lost.  From day one, I need to make sure that everything about the stakee is on the table for the staker to accept or reject.  Once he accepts, he must trust the stakee.

Sometimes, the condition is "I'm not sure about you, but I'm going to give you a shot" - that's fine as long as that is on the table from the get-go, and a couple of other things are clear...

2. Make sure the expectations regarding the staking duration are crystal clear
A staker can go for a stop-loss/stop-win.  "Here is the roll, you bust that and we are done.  You double that and we are done."

"Done" means "let's re-negotiate."

I prefer roll-conditions to time/volume driven deals.  The end is very simple, and it is very easy to restart.  With a timed-deal, a stakee may go for broke if he is still down and the duration of the deal is nearing the end.  Or he may just stop playing to win and play a deliberate break-even style once he is satisfied with his wins.

If you still prefer a timed-deal, at least make sure the stakee asks for a finite number of sessions and that it is a decent volume - and don't accept any crap about "one month" or "three months" either.  We are talking number of hours or number of sessions.  Thirty sessions?  A hundred thousand hands?  Fifty tournaments?  Five hundred hours?  As long as it is quantifiable.  This can be tough for the staker, since the stakee can be losing huge and not even be halfway through the agreed duration.  Tough, but a deal is a deal - a stakee has to have a shot at reaping the benefits of the variance that is keeping him down.  You can't quit on him too soon, because another staker might benefit when the stakee finally starts running normal.

True story:  I had a guy get staked with no clear conditions to play a live grind.  He started awful and was about 50k in the hole before he turned it around and ended up being 100k up.  The stakee moved him to a bigger game, where he lost it all.  Staker gives up on the stakee.  Stakee moves to another stable and wins wins wins.  Now the previous staker is moaning and groaning to me:  "Now he starts winning?  When it is no longer my money?"

Your fault, staker.

Have a contract duration and stick to it.  It can be a roll-condition, a session-amount, a hybrid, or whatever you feel is creative and productive.  As long as you have a clear-cut end to the engagement.

I am not a fan of open-ended arrangements - the kind where a staker "rides him until he can't ride him no more" or even when a stakee "milks him till I have my own roll"

Too often this turns out to be "I can't let him go because he owes me too much"

The latter situations have been more common in my experience, and more disappointing for me as a professional.  Stakees who enter an agreement "to build my own roll" owe it to their stakers to define the duration they would like to be engaged.  Many stakees I know run well and then unceremoniously ditch their staker "so I keep all my action" - bad stakee, bad bad stakee!  Please appreciate that the staker deserves a premium for getting your careers rolling, give the staker due process and credit please!


3. Make sure you agree on how to deal with losses
Winning stakees are not a big deal.  You just split the winnings and keep going.  It is when they run bad that issues arise, so one of my main goals when mediating between staker and stakee is to make absolutely sure they have an answer to this question:

"WHAT DO WE DO ABOUT MAKE UP?"

How you answer this question will influence how you split the winnings.  You cannot even begin to talk about profit-share until this is crystal clear - after all, 50% OF ZERO IS ZERO.  What about 50% of negative 100k?!?

If a stakee doesn't want to deal with make up, I make sure the staker understands.  This is a motivation issue, and it is not just about the stakee being a selfish prick.  It's about security in a very insecure environment - and the security is mostly provided by the staker, because the talent and execution is provided by the stakee.

Let me play out this scenario, a monthly payout arrangement, and you tell me if it is common:

period one:  Stakee wins 100k, takes home 50k after the split.  Good job, good month.
period two:  Stakee loses 70k.  Is he supposed to give back the 50k he is already paid out?  Of course not.  does he take anything home?  Nada.  Dry month.
period three:  Stakee wins 55k.  This is where it starts to get tricky.  Still 15k down from the last profit-share point, so most of the time, the stakee will be awarded nothing.  Another dry month.
period four:  Stakee just about breaks even, winning 12k.  Still 3k under. Another dry month.  THREE MONTHS he has played his heart out and received nothing for his time.  Is this fair?
period five:  Stakee is up to 40k profit halfway thru and is excited for a payday, then the other half gets coolered and ends the period even.  Still 3k under, so yet another dry month.
period six:  Stakee's game is severely affected by four months of zero income.  Combined with a bit of run-bad, he ends the period losing another 30k.  Dry again.
period seven... The stakee just either disappears or the hole gets deeper.  With no light at the end of the tunnel, it just doesn't make sense for the stakee to continue.  There is no great incentive.  For six months he has wagered all his time.  Meanwhile, the staker has been going about business as usual because the money being played is invested anyway.  So even though the staker is just about even, it's not like he wasted six months of his life.

So what is fair?

No make-up, but 70-30 favoring the staker?  Make-up, but staker takes care of all basic needs (lodging, food)?  Make-up, with smaller payouts for winning periods while the make-up exists?  70-30 favoring the stakee but with black-and-white make-up?  Stop-loss with 50% make-up payable upon closure?

That last one may seem more like a loan that a staking deal, but a deal is a result of a dynamic process of negotiation between two rational creative human beings, so this is still a staking deal in my book.

I'd like to continue, but this is the part where everyone's input needs to be considered first - there are many creative ways to do this, and there are many thresholds for what is fair in the short, mid, and long term.  This has to do with other factors as well - the depth of the relationship between staker and stakee - history, intentions, conditions to provide basic needs, etc...


So what do you guys do about make up?