Sunday, June 26, 2016 | 2 a.m.
First-place payouts in many World Series of Poker events are more than $500,000, and the winner of the Main Event has taken home at least $7 million for 11 straight years. The figures are astronomical, but they don’t always change winners’ lives.
That’s because the pursuit of professional poker is expensive for the players making up large portions of WSOP fields. The chance to win millions is often offset by the cost of flights, hotels and entry fees needed to compete across the world. In order to stay afloat, many pro players have investors who cover some, or all, of their tournament buy-ins in exchange for a share of the winnings.
“It’s good to acquire a backer to take the pressure off having to play with money you need for paying the bills,” said one-time WSOP winner Anthony Zinno.
The most common deal is “50-50 plus make-up.” This means a backer pays the full cost of a player’s tournament entry, in exchange for 50 percent of the profit. So if the buy-in costs $1,000 and the player wins $10,000, the backer gets $1,000 straight back, and they split $9,000.
But a player on a losing streak may rack up a string of buy-in debts. “We refer to it as ‘make-up,’ because the player has to make that amount back up before they get paid out,” said Dara O’Kearney, a long-term backer. So if a player goes without cashing for several tournaments in a row, and ends up $50,000 in make-up, the player would need to win $60,000 to take just $5,000 home; $50,000 would go straight to the backer, and the $10,000 profit would be split between them.
“There were times I won large scores and collected little to none of it,” said Darryll Fish, who has $2.2 million in tournament winnings and made a final table in a WSOP event this summer. “It’s emotionally hard to manage when friends, family and even strangers congratulate you, not knowing you didn’t get any of it.”
It’s not all bad for the players, commonly known as “horses” to their backers. Ari Engel, who won more than $1 million at this year’s Aussie Poker Millions event alone, kick-started his career with a backer, and at one point he assembled a stable of as many as 15 horses of his own.
“Imagine the first tournament I play for my backer, we split $100,000,” Engel explained. “I take my $50,000 and I never invest it back into poker; I do whatever I want with it. Then I go on a $300,000 losing streak. My backer runs out of money to back me, so our deal’s over. My backer has a net loss of $300,000, and I got $50,000 out of it that I never have to give back.”
So what’s in it for the backer? One thing is “the sweat,” the vicarious thrill of following a player’s tournament action. Zack Wilson is a recreational player who runs an investment portfolio, but the majority of his income comes from poker backing.
“It’s a roller coaster watching your player’s stacks go up and down,” Wilson said. “You’re following along, giving your support. Sometimes you watch online, or stand on the rails at a live tournament. Other times you read how it went in a WhatsApp message. Every hand you’re like, ‘Ugh!’ or ‘Good job!’ It’s a lot of fun for me — other people go insane.”
Wilson and O’Kearney agree that temperament trumps attitude when deciding on a player to back. “It’s important that they’re willing to learn, and that they have discipline and work ethic,” O’Kearney said. “Also that they’re able to take long periods when nothing seems to go right. If you don’t have the mental fortitude, you won’t make it no matter how technically good you are at the game.”
Of course, skill is a deciding factor, which might be why so many backers tend to be players.
Stewart Newman, who once backed Fish, has a background in both finance and poker that he uses to inform his investment decisions. He acknowledges “no one’s fool-proof,” having turned down an opportunity to back Zinno right before he went on a winning streak that included three World Poker Tour titles in two months for more than $1.5 million. “He wanted to play big buy-in tournaments, and I didn’t know him.”
Newman doesn’t beat himself up, as he’s a believer in “the butterfly effect” and that Zinno’s performance may not have played out the same with his backing.
Engel had a similar experience, declining a chance to back someone who then came in second in a WSOP event. “There’s a few ways you can try to console yourself,” he said. “One is, anything that changes, changes things. I make my decisions, I’m fine with it. Don’t let results influence you. Be happy with your decision at the time, given what you knew.”
Long-term backing is not the only way to invest. Many poker players buy and sell pieces of tournament action in percentages. Typically, they make these exchanges among themselves, but brothers Frank and Nick DeGeorge recently combined forces with Scott Hansbury to form YouStake.com. With more than 5,000 users internationally, YouStake gives backers the opportunity to buy a stake in their favorite players, such as WSOP bracelet winner Todd Brunson and WSOP Main Event winner Greg “Fossilman” Raymer. Players like Brunson and Raymer may not need to sell action, but it allows their fans some extra rooting interest.
Most backers have horror stories of players disappearing with money, or attempting to bill them for the buy-ins to tournaments they didn’t enter. Hansbury says YouStake reduces that risk. “Staking’s been around since poker began, but it’s all been back-room handshake deals, so a lot of people lost money. That doesn’t happen on our site; it’s all paid up front.”
While staking deals may be fair and square, there may still be disappointment. For players deep in make-up to their backers, winning first place can mean they go home with nothing, despite smiling for photos surrounded by stacks of cash.