Poker Backing Post-Black Friday

With deposited funds still unavailable on some former U.S.-facing online poker sites, the poker world has experienced a financial crunch since Black Friday. While the recent World Series of Poker experienced strong field sizes, those numbers are deceiving. For many, the summer series was merely a last ditch effort to build a substantial bankroll for the future. In the wake of Black Friday, many players have already called it quits. Those who tried and failed are now looking elsewhere for employment.

With players scrambling to find buy-ins, other players shrewd enough to spot reliable talent stood to profit substantially by chipping in… as long as their bankrolls could withstand the dry spells. However, with online poker out of the picture, many backers (a person who pays for another player’s buy-in in exchange for a share of the profits), are finding it harder than ever to justify the variance associated with big, live tournaments. As a result, the number of players who relied on financial backing arrangements to participate in bigger buy-in events has dwindled.

How this will affect tournament attendance in the long run is still to be determined, but many players anticipate a contraction as liquidity in the poker community dries up.
*
Who’s Your Backer?*

The poker world has always been full of financial arrangements made off the felt. Professionals exchange money behind the scenes and it’s not uncommon for multiple people to share portions of a big seven-figure payout. Players are constantly trading percentages with each other, if not buying shares outright.

Skillful players who are currently in the midst of a downswing, those who are risk averse, or those who simply can’t hold onto their winnings due to personal leaks, are often the target of backers. These players are known as horses and they make up a backer’s stable of pros.

Jason Mercier has earned over $7.1 million in his short tournament career, but his stable also accounts for millions more in winnings. However, Mercier understands that finding talent, not flash-in-the-pan results, is the key to being a successful backer.
“The results are kind of secondary to how they are playing,” Mercier said. “The best players in the world can run badly for an extended period of time. For me, it’s more important that my horses are playing well and making the right decisions. If that’s the case, then the good results will eventually follow.”

The deals between the two parties vary widely, but almost always involve makeup, a term that defines the running tally of debt incurred by the stakee. In the world of high-stakes tournament poker, its commonplace to see players accrue over six-figures of makeup before hitting a big score. If those horses are unable to recoup their losses or run through their initial stake, the backer has the choice of dropping them and never seeing their money again, or sticking with them in an effort to get back to square one, even if it is throwing good money in after bad.

Reducing the Variance

The appeal of having a poker tournament stable is that you are always in action and often have a decent sweat when the big money is on the line. Of course, $10,000 buy-ins add up fast, so prior to Black Friday, backers used online poker to offset the variance. It’s easy for a player to fail to cash in a string of 10 live events, but with the variety and multitude of online tournaments once available each day, backers could overcome the financial hit.

It’s for that reason that most backers required portions of online action in exchange for live tournament deals. Chris Moorman, one of the U.K.’s best players and (at the time of writing) fourth place resident in the Player of the Year race, once held a stable of 32 players, but was forced to drop many of them after Black Friday.

“I was basically forced to put all of my American horses’ makeup on hold,” Moorman admitted. “I didn’t want to drop them entirely and lose their action, but I couldn’t really afford to put them through an entire summer of WSOP events either. If they had completely bricked out, then there was no shot of earning it back online. I really had to cut down to the European guys first and only use spare funds for American players.”

Moorman, now a Lock Poker pro after leaving the DoylesRoom Brunson 10, has earned over $4.1 million in his tournament career, including over $1 million at this summer’s WSOP, but even he won’t grant his horses live-only deals.

“All online players are looking for live only deals, but I’ll never do it,” said Moorman. “If they want to play big buy-in live tournaments, then they are going to need to sell their online action as well. The only time I ever even considered it was for Ty Reiman, who obviously did really well by me by finishing second in the 2010 PCA for $1.75 million. Honestly, I didn’t want to deal with the variance. So when someone asks me for a live-only deal, I just tell them that if Ty didn’t get one, then they certainly aren’t going to get one.”

There are, of course, rare cases where a player is good enough to secure a live-only deal, such as David Peters, who has nearly $1.4 million in earnings. Peters sought an arrangement with fellow pro Bryn Kenney to help him cope with the inevitable downswings that can terrorise a bankroll. In an interview last year, Peters explained his reasoning for piecing out this action.

“There are always downswings, but I have never gotten to the point where I have considered not playing anymore,” Peters said. “For the most part, I have always been financially on my own. So, the downswings affect me a little bit more. But, for the past year or so I have been backed by Bryn Kenney for all live tournaments. So that definitely helps with the swings. I wanted a live-only deal, where I could keep my online action. Live buy-ins add up very fast. Finding a live-only deal isn’t easy to do, so I was happy when I found one and just went with it.”

Chasing Big Scores

Tony “Bond18” Dunst, one of the better online multitable tournament players around prior to Black Friday and host of the World Poker Tour’s Raw Deal, is a backed player. Dunst played 27 events over the course of the summer, cashing in zero. After the WSOP was over, the poker pro had accumulated about $210,000 in makeup over the previous 12 months.

“I’ve never completely bricked a summer before,” Dunst said. “If we want to get technical, I’ve come close to bricking an entire year. I have only one live tournament cash in those last 12 months. On one hand it’s easy to shrug off because it’s not actually my money, but on the other I feel the guilt of causing further financial strain on a friend whose summer was as bad as mine.”

Despite Black Friday wiping out a large chunk of the online funds of many in the poker community, it hasn’t really affected the ability of poker’s elite to get into the big buy-in events on the tournament circuit… at least not yet. According to Dunst, the $25,000 World Poker Tour Championship this spring, which saw a slight turnout increase from 2010, was a good example. Dunst said that the game’s top pros are still able to find buyers. The money was also there for the $50,000 Player’s Championship at the WSOP, as the event did not experience a drop off as a result of frozen funds.

This summer, Mercier’s two primary horses, Dan O’Brien and Allen Bari, didn’t run as bad as Dunst did, as both broke through to rack up over $1.2 million in earnings. Even so, that still wasn’t quite enough to get the Floridian pro out of the red.
“Since I’ve gotten into poker, I’ve probably backed about 13 or 14 different players,” Mercier said. “These weren’t random events where I just bought a piece; these were relatively long-term deals that spanned a number of tournaments. Of those players, I’d say I hung on to 5 or 6 of them for more than a year. I’ve been losing money backing players for the last 30 months, so to get almost all of it back in one summer was a great feeling.”

Ari Engel, another one of the most consistent players on the tournament circuit, backs a group of players in Las Vegas for smaller buy-in daily tournaments. Engel said that the absence of online poker creates a bigger barrier to entry for a large number of beginning players. Financial assistance could arguably be more necessary now, in the post-Black Friday era, than ever.

“A big problem right now is that there isn’t a $0.01-$0.02 cash game going on for the micro-stakes player,” Engel said. “It’s harder for people to come in and play in the cash games. Right now the $1-$3 games in Vegas have a buy-in of $300, which is so much bigger than what online was able to offer. The vast majority of professionals in the game right now started off playing really, really small online. I think this is an issue for poker for the time being. Online poker will eventually become regulated, but if we were just stuck with live poker for a long time, that would be devastating for the game.”

How These Relationships Affect Play

With so many players’ finances intertwined, it would be impossible to keep them at separate tables for the entire duration of a tournament. Furthermore, it would be extremely difficult to regulate any soft play between backers and their horses. Accusations have surfaced throughout the years of supposed collusion, but these cases are rarely proven or punished.

To combat this dynamic, players are constantly policing themselves, making existing backing relationships public around the tables.

The recently launched Epic Poker League has gone so far as to include backing in their rules, forcing all players to disclose their deals once the tournament has reached the money. In addition, no player may have a smaller interest in him or herself than he or she has in any other player in the event. Trades are even limited to a maximum of 10 percent. It remains to be seen how enforceable these rules are.
Even leaving a backing relationship isn’t easy, because although a backer can drop a horse at any time, the horse cannot quit unless he is in the black for his stake. Even with one of the best poker résumés in the business, Shaun Deeb found the need to receive backing before the 2009 World Series of Poker. Deeb reached a staking deal with Cliff “JohnnyBax” Josephy and Eric “sheets” Haber, rumored to have a colossal stable of pros. The decision wasn’t out of necessity, but instead out of comfort.
Although Deeb had 100 percent of his action in the first three or four years of his poker career, Josephy and Haber provided stability for a run of big buy-in events and high-stakes cash games. It wasn’t until his victory in event no. 28 in the PokerStars WCOOP in 2010, before Deeb thought it was time to leave the business relationship.
“I’m sure they knew when I was really deep in the WCOOP event, and after I got out of makeup, [that] I was going to leave them,” Deeb said. “I was cutting down my volume and not following their rules — kind of doing my own thing. I did really well for them over the years, and they were really helpful when I needed them. I could always have been on my own. It was a comfort thing. I was just like, alright, you’re not needed anymore, and we parted ways.”

Avoiding the Pitfalls

According to WPT champion Nam Le, the current world of live backing is anything but easy. Le, who has more than $6 million in lifetime earnings, said he has made mistakes before about putting people into events. The poker pro said it can take years for a horse to find his or her way out of the red.

“A few years ago it was easier to show a profit quicker in this type of business deal, however now with the fields being so tough; you have to be willing to go deep before showing a return,” Le said. “It might take a long time to get your money back.”
Moorman, despite finding success by investing in other players, also warned about the potential pitfalls. “Backing is a huge hassle and its way more time consuming than most people realise. Obviously, depending on your horses, it can be incredibly profitable, but there are a lot of factors to consider. You really need to be able to trust your horses and need to stay on top of them, making sure they are playing at their best. Some players also play better on their own money, so you need to take that into consideration as well. Black Friday has made a lot of players desperate, so it’s important to make sure that you aren’t being screwed over. With the current volatility of the poker market, I really can’t recommend anybody getting involved.”
Unless online poker becomes licensed and regulated in the U.S., poker tournament attendance numbers will likely continue to fall as cash entering the industry dries up and fewer players can establish an online bankroll. In addition, not only is there a lack of funds available, but the backers themselves will be more hesitant to offer deals to those looking for a way into the world of high-stakes live poker tournaments. ♠