This is the first in a new series on finances and variance in poker from pro player and Solve For Why instructor, Matt Hunt.
If you’ve been active on poker Twitter over the past month or so, you’ve probably borne witness to a seemingly endless series of heads-up challenges being issued between various pros and high-profile amateurs with money to burn. From Matt Berkey and Nik Airball, to Doug Polk and Bill Perkins, to Eric Persson and… well, almost anyone, the community is awash with potential high-stakes showdowns.
It’s natural that these matchups would attract a lot of attention from casual poker fans - people want to see big action, big pots and heated rivalries. But there’s a certain dynamic surrounding the financial aspects of these events that bears a little more discussion - the issue of whether or not the players involved, specifically the pros, are 'playing with their own money'.
Of course, what people are referring to when they say this, is the issue of whether or not players are selling a percentage of their action to their friends or investors, to offset the high level of variance involved with such small sample sizes of extremely high-stakes gambling. There seems to be a perception - among the poker public, but also among some of the aforementioned wealthy recreational heads-up challengers - that selling action is some kind of a cop-out, or that a 'real pro' would take all of their own action if they really believed themselves to be such a big favorite to win in such a contest.
On some level, it’s understandable that people think this way - after all, if you’re a casual poker fan whose interest in the game was piqued by representations of poker in the media, it might be somewhat deflating to learn that the sums of money being exchanged in these high-stakes contests aren’t quite what they seem.
Personally, I got into poker after seeing the movie Casino Royale, and while my enjoyment of the movie’s poker scenes wasn’t diminished by knowing that James Bond was being staked by the British government, that probably had more to do with the life-or-death consequences for the players involved than anything else.
Staking keeps the big games going
In reality, though - as mundane as it may sound - staking and ‘action selling’ are integral to the continued existence of poker and its ability to thrive at high stakes, in the same way that the ability for businesses to receive investment and capital from external sources is pivotal to the wider economy.
A surprisingly big portion of the money in the poker economy comes from what you might call ‘angel investors’ - people with a casual interest in poker, who perhaps don’t have the time or inclination to play consistently themselves, but who have enough money to recognize the potential profit involved with buying action from successful players.
Without the ability to draw investment from outside the existing poker economy - or, indeed, without the ability for successful poker players to invest in each other, or to support players who are lower down on the ladder of success than themselves - the poker economy would be severely hampered.
The harsh reality of the game is that these types of high-stakes environments with millions of dollars on the table can - with maybe a few exceptions - only really exist if the players involved are able to parse out their action to offset the massive level of variance involved.
Businesses take outside investment – why not poker players?
The super high roller MTT scene is a great example - even with an ROI of 10% in these events (which probably no player in the world has), a player would need roughly a $10million bankroll to be somewhat comfortable playing them consistently, and nobody in poker has that kind of cash lying around. If everyone playing those events was forced to play without accepting staking, nobody would play!
To claim that a poker pro’s achievements are somehow less valid, or they have lower credibility as a gambler, because they accept staking is a little bit like invalidating someone’s success as an entrepreneur because you don’t think they should have accepted outside investment as a startup.
It would be ridiculous to say, “you’re not a real entrepreneur, real entrepreneurs don’t take anyone else’s money!” Similarly, it would be ridiculous for an entrepreneur to open a business with the mindset of, “if we don’t have a good first month, then I guess we’re just going to have to close up shop.” This is the business equivalent of playing high-stakes poker with 100% of your own action, for anyone who’s not already extremely wealthy. If you lose a few big pots or have a couple of losing sessions, you’re out of the game, which is a bad business decision in the long run.
Selling action can kickstart your poker career
For me personally, staking and outside investment have been a huge part of my success as a player. I wouldn’t have had the time and space to focus on getting better at the game without the three separate online backing deals I had during the early years of my career, and I wouldn’t have had the bankroll to start playing a higher volume of live events at the WSOP once I moved to Las Vegas in 2017.
Any pro poker player needs to be willing to sell action when it’s a profitable opportunity – a chance to grow your own personal poker business and reach higher levels than before. It’s understandable that this process might not necessarily be understood by external observers, but we should embrace the reality of the game.
Sites like StakeKings and PocketFives, which enable players to sell action to supporters, fans and other investors, are a great addition to the poker landscape - we should normalize the idea that selling action doesn’t take away from the significance of gambling for large amounts of money, nor does it somehow invalidate a player’s achievements if they don’t take home 100% of what they win.
I hope for a poker future in which the casual observer isn’t quite so concerned by trying to figure out exactly how much money everyone really has in their pocket, and we can all get back to appreciating players’ willingness to gamble for high stakes - especially those who are willing to do it publicly, on live streams or in high-profile televised games. After all, the highs and lows are what we’re all here for. The dollar amounts are just how we keep score.
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Images: World Poker Tour
