Tourney Staking Agreement / Arrangement (3 Viewers)

[chkmte]

I’ve been approached to play in some upcoming tournaments in Kansas City. There is a party that wants to stake my buy-in’s.

Obviously, I’m flattered by the offer, and this would be a first for me. I’ve offered to take 1/3 of tournament profits as my cut, as I hope to establish a long-term partnership.

What else should I know and try and insert into the agreement? How are taxes handled? Does my playing strategy change at all?

- Tim

 

[ekricket]

Does my playing strategy change at all?

I’d have to think your being staked because they like your strategy.

 

[chkmte]

I’d have to think your being staked because they like your strategy.

Yes. But as this is a first time partnership, I’m grappling with “should I try and make the money” or “balls to the wall” for an early win. I guess that’s kinda my thinking.

 

[Broski]

I used to gamble WAY too much on billiards. In that world, stakehorses split the winnings 50/50 with the player. Not saying that is how this should be done, but just context. I think your offer only asking for 33% is more than fair.

 

[LotsOfChips]

1/3 of tournament profits as my cut,

In that world, stakehorses split the winnings 50/50 with the player.

Percentage of winnings vs percentage of profit can be a big deal...

How are taxes handled?

My understanding (I am not an accountant) is that any payout of $5000 or more will have tax deducted by the casino. You will have to provide a tax number, and that will be recorded as income on a tax record with your name attached.

If you are giving away 67% of that amount, you will need to make sure that the backer pays taxes on that 2/3 (not sure who could claim the expense of the buyin, as it would be in your name, but he would be paying for it...)

Best to seek out a good tax accountant that understands the US tax code as it pertains to gambling winnings and expenses/losses.

 

[Broski]

I guess depends on how you look at it. If we are playing pool for 1k a game. I lose 2 then win 4. I/we win 2k (2k profit). 1k each @50/50. Poker buyin $500, place in the money for 2500. Earned 2500. Won/profit 2k.

I guess it's all in how you look at it. I know what you mean though. Just make sure everyone is on the same page before the first event

 

[LotsOfChips]

Won/profit 2k.

My understanding is that you would have won $2500, as far as the casino/IRS is concerned. The profit would be $2000.

Take that up a notch - $10k buy in, $25k payout. Winning $25k, profit $15k

Maybe I'm wrong (wouldn't be the first time)

 

[Broski]

Maybe I'm wrong (wouldn't be the first time)

that makes 2 of us

 

[Broski]

Just ask my wife

 

[NotRealNameNoSir]

I’ve been approached to play in some upcoming tournaments in Kansas City. There is a party that wants to stake my buy-in’s.

Obviously, I’m flattered by the offer, and this would be a first for me. I’ve offered to take 1/3 of tournament profits as my cut, as I hope to establish a long-term partnership.

What else should I know and try and insert into the agreement? How are taxes handled? Does my playing strategy change at all?

- Tim

Great, you're doing something right! Maybe beginner questions, but do your backers understand poker and tournaments? I'd hate to have someone fronting the cash for me not knowing that most times the cash is gone. I hope they know that tournaments are high variance even for good players. If they understand tournaments, like @ekricket said I wouldn't change a thing.

Yes. But as this is a first time partnership, I’m grappling with “should I try and make the money” or “balls to the wall” for an early win. I guess that’s kinda my thinking.

I don't know how much ICM you work on but I loved Dara O'Kearney's book "Endgame Poker Strategy", they talk an awful lot about mincash/going for the win/change of play. I'd try my hardest not to adjust my play; if you start thinking of these tournaments as freerolls it may show in your results. An early win would be sexy and a good start but we know that's rare, consistent results will build foundation of that long-term partnership.

Discuss chops ahead of time, whether they'll allow/support you chopping at a certain point in the tournament. If she wants you to take a chop, usually you do so, but that is something good to speak on before it occurs.

Keep playing profitably, and congratulations!

 

[chkmte]

Great, you're doing something right! Maybe beginner questions, but do your backers understand poker and tournaments? I'd hate to have someone fronting the cash for me not knowing that most times the cash is gone. I hope they know that tournaments are high variance even for good players. If they understand tournaments, like @ekricket said I wouldn't change a thing.



I don't know how much ICM you work on but I loved Dara O'Kearney's book "Endgame Poker Strategy", they talk an awful lot about mincash/going for the win/change of play. I'd try my hardest not to adjust my play; if you start thinking of these tournaments as freerolls it may show in your results. An early win would be sexy and a good start but we know that's rare, consistent results will build foundation of that long-term partnership.

Discuss chops ahead of time, whether they'll allow/support you chopping at a certain point in the tournament. If she wants you to take a chop, usually you do so, but that is something good to speak on before it occurs.

Keep playing profitably, and congratulations!

So the partner is a poker player, which helps quite a bit. And I’ll see if I can find that book. But you’ve provided some good items to consider. We’re working on the details now.

 

[NotRealNameNoSir]

So the partner is a poker player, which helps quite a bit. And I’ll see if I can find that book. But you’ve provided some good items to consider. We’re working on the details now.

oh duh, ignore all my "are they savy" nonsense then lol

 

[allforcharity]

People always worry about collusion between spouses playing at the same table. My observation is that they are usually jonesing to take each other out in the most brutal ways possible. A microcosm of marriage, if you will.

 

[Poker Zombie]

Discuss chops ahead of time, whether they'll allow/support you chopping at a certain point in the tournament. If she wants you to take a chop, usually you do so, but that is something good to speak on before it occurs.

+1 on this. I bought action on a poker player once, and he chopped after he was in the money. He was willing to take less, because he wanted the trophy.

As a backer, I felt this was a shit move. I felt the player should have played it out. I wasn't in it for a double up and a casino photo of him holding the trophy like a champion. I understand that he was entitled to play or chop as he saw fit so I have no recompence. He had to understand I would never, ever back him again, because it left such a foul taste in my mouth.