Tournament Backing

It’s World Series of Poker time and that means a few things. First, it means that I always have a tab open to wsop.com. I can’t help it, even when I’m not playing that many events, I still follow the action to see who is doing well. Second, it means the cash games in the Los Angeles area are much slower than normal. Third, it means that the people at my local casino are asking me lots of questions about tournaments.

Most people just ask me about which tournaments I’m planning on playing. The quick answer to that one is that I’m playing the main event and we’ll see what else depending on how that tournament goes. It’s hard getting to Vegas for lots of tournaments when you have three kids and your wife works full time. The next most popular question is do you have a backer, which is often followed up by a barrage of questions about how backing works.

As is often the case in poker, the honest answer to that question is it depends. Long term deals are different from one time event backing which is different from short term package backing.

Let’s start with my type of deal which is a long term backing deal with makeup. My backer pays for the buy-ins to every tournament that he feels comfortable with me playing. I tell him which upcoming events I’m looking to play and he says yes or no to each individual one. As soon as I enter the tournament, the buy-in gets added to the running total of buy-ins that I’ve accrued since the last time we took profits out of the deal, called makeup. If I don’t cash, neither of us gets any money. If I cash, the amount goes to my backer until the makeup is at $0. Anything above that $0 figure at the end of the current month gets evenly split between he and I.

I know that’s a little complicated so I’ll give you an example of a theoretical World Series of Poker. Let’s say that going into the series, I’m carrying $50,000 in previous makeup. Then, I play a $1,500 and two $3,000 tournaments that I don’t cash in. My makeup would stand at $57,500. Then I play another $1,500 buy-in tournament that I cash for $15,000 in. Now my makeup would be $57,500+$1,500-$15,000=$44,000. My last event of this hypothetical year is the main event which costs $10,000 to enter, putting my makeup at $54,000. I go on a deep run in the main event and cash for $150,000. That means I’m now out of makeup completely and we have $150,000-$54,000=$96,000 to split between us evenly so, of the $150,000 I cashed for, I would give my backer $54,000+$48,000=$102,000 and keep the other $48,000. If we were to continue our backing arrangement after that, my makeup would stand at $0 and we would proceed in the same way.

A much more simple backing arrangement would be one where someone puts another player into just one specific event. Usually in this type of situation, the two work out a percentage that they feel comfortable with, the backer pays for the buy-ins, and any money is split at said percentage. For instance, I put player A into a $500 tournament and I tell them that they will get 20 percent of the total cashed for. If player A doesn’t cash, nobody gets anything. If they cash for $10,000, I would get $8,000 and they would get $2,000.

The final type of backing arrangement is one that is most seen by the public. Players often post to their Twitter accounts that they’re selling action to a package of tournaments either direct to consumers or through a third-party backing site. In this type of backing deal, a player decides which upcoming tournaments they would like to play and groups them together into a package. These are tournaments that they feel they would be profitable in, but the buy-ins are too big for them to absorb on their own. They then decide how much of the action they would like to put up for themselves and they sell the rest to other investors, almost always at a markup.

For instance, let’s say that Player B is interested in playing some World Series of Poker events. He looks at the schedule and sees tournaments totaling $50,000 in buy-ins. She feels confident that she’s very profitable in these tournaments and decides to charge a markup of 20 percent on all of them. This means that the package is now worth $50,000*1.2=$60,000 and each 1 percent that someone would like to buy costs $600. Player B also decides that she would like to keep 40 percent of her action. She sells out the 60 percent that she put up to the public for a total of $60,000*.6=$36,000. She takes that $36,000 plus the remaining $14,000 to play in the World Series events. Let’s say she cashes for $35,000 throughout the series. That means each person who invested in her for the series gets $350 for each percentage that they bought. She pays out $35,000*.6=$21,000 to her investors and keeps the remaining $14,000. As you can see with this format and the previous one, it’s possible for the backers to lose money while the player breaks even or makes money.

During the WSOP, a large portion of players are playing for less than 100 percent of their own action through some combination of the above different types of backing deals. If you come across friends or professionals that you admire offering some of their action for sale, make sure they are trustworthy and transparent with how much they are charging before you enter into any deals that you might try to make and always remember that tournaments are a risky investment, especially over the short term so make sure you’re investing money that you can afford to lose. ♠

Gavin Griffin was the first poker player to capture a World Series of Poker, European Poker Tour and World Poker Tour title and has amassed nearly $5 million in lifetime tournament winnings. Griffin is sponsored by HeroPoker.com. You can follow him on Twitter @NHGG