The subject of staking in poker, or any gambling related business, is tricky. If it’s handled the wrong way, friendships are broken, money is lost, and nobody is happy. If done right, however, it can be quite a lucrative investment for the backer, and a valuable tool for the one being backed.
This is what a basic poker staking agreement might look like. The Staker will give(stake) the Stakee a certain amount of money to gamble with. By the end of a pre-defined time frame, the Stakee will pay back the Staker the first “stake”, and also a certain percentage of the profits.
You can find two important parts to the agreement. Those two issues can lead to one party in the agreement obtaining a bad deal, even if neither party intends to harm the other. The very first part that is important is the total amount of time. The second is the percentage of the earnings to be paid back.
Some people make the mistake of making the time frame too short. Poker, and any form of gambling, involves luck. Even although you are skilled and have an edge, there is a variable of luck. You won’t always win. Take, for instance, the normal agreement of someone being staked for one nights play. There is a $200 no-limit hold’em game. By the end of the night time, the first stake is paid back, and the profit is split 50/50. The person being staked is a great player, they double their buy-in about 70% of the nights they play, and lose their buy-in only 30% of the nights they play. This might seem such as a good proposition for the Staker, but let’s consider the math.
70% of the time, the Stakee will double his buy-in, and have $400 by the end of the night. The Staker would get his original $200 back, plus 50% of the earnings, or $100. The Stakee would get the other $100. So, 70% of the time the Staker profits $100, and 70% of the time the Stakee profits $100.
30% of the time, the Stakee will lose his buy-in, and have $0 by the end of the night. The Staker can take the total $200 loss. So, 30% of the time, the Staker will lose 200, and the Stakee can have lost nothing https://bola228.world.
Since 70% of the time, the Staker profits $100, and 30% of the time, the Staker loses $200. His average expected return is (.65)(100)+(.3)(-200) = (65) + (-70) = -5. With this particular deal, even although Stakee is a great player and can beat the overall game 65% of the time, the Staker LOSES money!
When they made the same deal, but rather of splitting the earnings after 1 night, the split the earnings after 2 nights, then the offer is much better for the Staker. In the event that you consider the math, you will find 4 possible outcomes. He could win both nights, lose the initial win the next, win the initial lose the next, or lose both. The times he wins one night and loses the following, there is no profit or loss, so we are able to ignore that outcome since it’s zero. The percentage chance winning both nights will be .65*.65 = .4225, or about 42%. The chance of losing both nights will be .35*.35, or about 12%. The others of the time, it’s break-even win one lose one. So, 42% of the time, they will split $400 in profit 50/50. The staker are certain to get $200 42% of the time, for an average profit of $84. He will lose $400 about 12% of the time, for an average lack of $48. His total average expected profit will be $36. So, by simply adding yet another day to enough time frame, the Staker’s winnings went from -$5 to +$36. The long run a stake, the safer it’s for the Staker. The shorter the word the stake, the more expensive percentage of the earnings the Staker needs to replace the loss. There are many in-depth articles and discussions at www.snggrinder.com [http://www.snggrinder.com] regarding staking deals for poker, blackjack, and other gambling games.