(1/x) A thread on why poker staking has been unsuccessful for the last 10+ years and why under its current model it will never be an option as a business. I spoke about it with @jaimestaples on his podcast and had people message for more info. Feel free to AMA at end of thread
(2/x) first thing to realise is what kind of categories are there of winning poker players. Generally there is 3 main ones. 1) Super top end crushers, top 1% of fields, huge rois, 2) Guys who do well, win in all the tournaments they play, play OK volume and study hard and
(3/x) very high volume players who win at 7+% roi. All three player types on the outside seem very attractive to stake, but all three player types are virtually impossible to stake for a lot of reasons. Let’s go through them one by one
(4/x) Player 1. They crush, are very good and generally will want to play high stakes. First of all, how do you know they are good? You have to be extremely qualified, there is no data that is reliable to show they are a winner today. 3 years volume means nothing and
(5/x) because the game moved on and small samples like 6 months means nothing because the variance is so huge in mtts you’re very likely to be running good or bad. You need to be the best player in the game they play to be able to fully critique them, which leads to big problems
(6/x) you have two options. Either you’re the huge crusher, but then you have to spend significant hours most likely going over dozens of full hand histories a month which if you’re a crusher spending that hourly time will swallow all the ev of the stake and you need to work too
(7/x) or you hire somebody else to do it. Good people are very expensive, then spending the required time makes it -ev. Becuase this player type will play highest stakes you cannot afford to allow them to play because they will lose for thousands of games before you realise they
(8/x) have turned into a losing player in the games. And historically 99% of crushers have turned into loser in their games. It will happen and you lose a lot. Let’s take “Jimmy” he makes you $500k and then loses 100k, by the data he is still up a lot and variance happens
(9/x) dropping him makes no sense and it’s unfair on him. He keeps playing whilst being / loser (unknown to you) he loses another 100k and whilst still being a 300k winner you end up +50k over say 3 years with infinite time spent + hours on coaching, allocation of funds etc
(10/x) so player 1 unless you’re somehow a high stakes player with infinite time is virtually impossible to stake. Next player 2. Player 2 profile, good player, works super hard, good roi, completely honest. Sounds perfect right? Not so much..
(11/x) the big problem again is it’s impossible to track when he turns from winner to loser and when you do it’s too late it’s ate previous profits. There is an even bigger problem this time though. Let’s assume he stays a winning player, it’s virtually impossible for him to not
(12/x) go on a significant downswing. I consider significant downswing = 1 year + ev. So $60k year ev guy ends up in 60k makeup after tough scoop/wcoop SUPER STANDARD. It’s very easy to study 6 days a week when you’re printing your 5k/month ev. However when you’re 1 year away
(13/x) from clearing makeup nevermind getting any money yourself, you essentially have to grind 2 full years to make 30k (you give 50% to backer) which is probably going to be one of the lowest hourly jobs around once you get into that makeup. Staking GOOD players is impossible
(14/x) so the top crusher you can’t stake becuase its impossible/too expensive to track him & it’s too dangerous to go on wild swings of guys who play sogbifcbskty higher Abi than the rest of your portfolio and you can’t stake the rlly good mid guy because variance will crush him
(15/x) so we’re left with the low stakes guy who plays heaps and heaps of games and will play in 2 months what the good midstakes guy who studies does in 1 year thus nornso downswings will be over quickly (in time if not games) the problem with this is he doesn’t need staking
(16/x) he generally table selects well, doesn’t study much, doesn’t really need a community, doesn’t need too much mentoring and just prints his $/game. So the third guy whilst being a desirable horse is virtually impossible to attract and because he is in such demand he can
(17/x) essentially ask for huge profit % becuase he’s somlow variance and going to make the backer money for sure, do you go from high stakes crusher to having tiny % in micro guy. Thus killing the initial business plan of having this “desired” big stable that is “printing”
(18/x) there has been probably 1000+ stables of some size or another, they almost all will eventually go broke and not becuase of their lack of hard work, it’s a virtually impossible business. I get a lot of friends who start in staking and ask for advice, it’s always DONT DO IT
(19/x) I’m extremely fortunate with bitB we learned from costly mistakes early, we had a Fedor who was equal partner who helped with early stage progressing and have amazing partners who are imo the undoubted two best players in the world and are willing to sacrifice their time
(20/x) because of a really great community of players and coaches. If I ran this sim 1000 times I think we go broke 950+. Anyway, feel free to give any thoughts or AMA
(20x) people will assume this had an agenda all along, but this is why stables will always be the best acquisition tool for a poker site. They will be staking players in games they aren’t beating and full bankrolling them and reloading them. That’s INSANELY good for a site
This btw is a lesson about BRM, even if you’re not staked if you play a schedule and varaisnce showssvyou can easily get into 1 year + deficit in ev you should most likely change what you’re doing. The top 10 on pocket fives every 5 years usually disappear because bad variance
Gets them into a hole which is 15+ months of grinding and it seems very undesirable. I skip most 5ks online where I think I’m winning decent rate and I have bankroll to play, but playing a stake level which has so few bis/year is to risky to get into big (in months)downswing
If I played the stakes I think my bankroll and skill is at the level of I would be a big favourite to be in 1-2-3 years worth of ev deficit. Right now I play every 215-2k which all have a lot of bis through the year and with expected large roi is difficult to get into big deficit
Success in poker to me is longevity. It’s so so so tough to be consistently winning got 10+ years without your gamble/ego wanting to move up to a level where the top stake in your buy in range can destroy your month/year/two years
Let’s take for example a guy who is biggest winner in 500z. He makes 400k/year. A new site brings out hourly 25ks and he’s super bankrolled to play and can win 10%/game looks amazing. He goes on 1m downswing (super standard) still has huge bankroll but in ev for his Normal games
He’s now in a 2 year deficit and is a huge favourite to quit.
