A question for Greg and everybody else // Backing

[Martin Aigner]

For the last 2 or 3 days of the WSOP there were several discussions whether Greg had backers for the main event or not. Some knew that Greg asked for backers way before the WSOP here and on RGP, but nobody of the poster knew for sure whether this included the main event or not. Due to some post lately it seems that Greg indeed had some backers for the main event and obviously payed everybody on time. I personally didn´t read the post back then, where he searched for backers, but I honestly think that I would have risked $500 or 1000 (definitly not more for several reasons) in Greg. Of course it is easy to make such an announcement after knowing the results, but I´m sure that I would have done it (Greg being one of the very few I would have backed). Anyway, it still makes me wonder why someone would want to be backed at all.

For the sake of the discussion lets assume that being backed means that several people put up and receive money from the results according to their percentual share of the bankroll. Being staked for 100% without having to put up any money of himself obviously makes a completely situation for the player.

Now I can understand that it makes sense for a good player who doesen´t have an adequate bankroll to be backed for 1 year into WPT and WSOP tourneys. Playing a lot of them costs easily $150,000 a year, which would need a really huge bankroll (esp. given the fact that it´s easily possible for the result to be –$150,000). But being backed into high limit cash games doesn´t make too much sense to me. Why would one want to play in a 200-400 game and hold 10% of the bankroll when being able to play in a 20-40 game out of the own bankroll? Of course there are several possible reasons, such as

- The rake and tips are lower (in percentage to the limit)
- It might be some sort of ego-bust to play in the highest game offered
- The player learns more simply by playing against the best players
- The player gets to know the best players, which might help in the big buy in tourneys where he is likely to play against them again
- The player will not be intimitaded by the “famous” players in big tourneys, since he might have played them before in cash games
- Other players might be intimitaded by him in big tourneys, since he is one of the big cash game players
- Tax reasons??? (We don´t have to pay taxes on our winnings in Austria, so this is just a guess without any knowledge to support it)
- If one doesn´t live next to a casino the travelling costs would be reduced for the player (given that all the backers agree to this).
- The player is very good at different games, and therefore might profit of games as H.O.R.S.E., which aren´t offered at the lower levels

Now from all of the above reasons I think that only the last one makes really sense, but even all of them together don´t make up for having to play against a probably higher skilled average player. Of course there might be some suckers sometimes in these games, too, but obviously you will have more of them at the 20-40 level.

Furtheremore I think it sucks when you play only 1 or 2 WSOP/WPT events a year, manage to win an event for a livechanging ammount of money and then have to pay the backers a huge share out of it. Of course, Greg´s said to have won 1.7 million after paying the backers and taxes, which would be a live changing ammount anyway for most of us, but if it was some WPT event he had won, his net profit might have been something like $300,000, which still is nice, but wouldn´t have changed his life neither. I guess that Greg would still work in his job as patent attourney as he did before.

On the other side if one wants to play in 1 or 2 WPT/WSOP events a year lots of players are able to put up the money by themselfs or qualify via satellites and therefore doesn´t have to pay any backers.

Any thoughts?

Martin Aigner

[Greg (FossilMan)]

You make some good points, but there is a big factor that you didn't discuss. Freeroll. Many backed players put up NONE of the money, but they get a percentage of any win (and lose nothing when they lose). This is the biggest reason to take on backers.

In my case, I put up about 1/3 of the money, and would've taken 1/3 of the loss if we lost money. However, the deal gave me 35% when we won, plus 1/3 of the remaining 65%. That is, for being the player, I get 35% when we win. For being a backer, I get 1/3 of the losses, and 1/3 of the wins (after paying the player).

The reason for doing this is because my bankroll had gotten low, and this was the only quick way to replenish it. I made a deal with my wife years ago, got $1000 for a poker bankroll, and agreed to never supplement that bankroll from money from my job, savings, or the like. Since I had a losing trip to the WSOP in 2002, I took on backers to increase my bankroll to the point where I could still play in the big mixed games at Foxwoods. At that time, the biggest holdem game was 20-40, and it was just an OK game. Whereas there was a semi-regular 150-300 mixed game that was very good. And as you suggest in your post, games other than holdem and stud were played in the mixed game, and my edge at those other games was much larger than my edge at holdem or stud.

So, it was a deal that looked much better for me than doing without, and also was a good +EV deal for the backers (IMHO). Apparently they agreed with this assessment, and fortunately it worked out better than we had hardly dared to dream. ;-)

Later, Greg Raymer (FossilMan)

[Jaquen H'gar]

Thanks for the explanation, Greg. I have no experience with backing poker but I do have extensive practice with backing and being backed at blackjack. I saw one poster referred to your pro BJ background. Any info you want to tell?

To others that aren't familiar with backing, I can say there are as many different backing arrangements as there are players to be backed. Everyone seems to have a different opinion of what is fair, usually determined by whether they are a player or an investor /images/graemlins/smile.gif
In BJ, which is a whole lot easier to quantify concerning win rates although the variance is much greater, it is standard to pay an hourly rate then split the winnings among investors. Other plans include a common team plan of the team players splitting 50% based on hours each played, and the investors splitting 50% based on how much each invested. The plan is to break the bankroll after a certain time or after doubling the bankroll.

Regardless of the backing plan, honesty and trust are absolute requirements. It also seems to help if the player/players are investors as well. You don't want a poker player only on a "salary," as the incentive to dump would become quite tempting in times of financial difficulty. Many (most?) BJ teams fail because of a dishonest teammate.

[J.Brown]

Very well put by both of you!!!

Being one of the backers (1 share, should have been more, silly me) I thought I was getting the deal of a lifetime way before THE BIG WIN materialized. I thought this for several reasons:

very limited chance of going broke, mostly due to the fact that Greg had a vested money interest himself, ask me how my other "backing" deals have gone, LOL!

more than just tournaments were in the mix, this in my mind was a deciding factor, Greg could have gotten unlucky in tourneys for 10 yrs worth of backing deals and been playing at or above the level of play that we all got to witness.

Greg being a known quantity and a proven honest guy, both in his previous backing deal at Foxwoods that helped lead me to this deal and a great personal recommendation by Ray Zee (and I took Ray out to dinner as a repayment for his great advice!!)

and finally from a backers standpoint a chance to have a piece of a brilliant and agressive poker mind, results be damned, I think that is always a great thing to be a part of......Greg you helped make me a lot of money just by learning in each and everyone of your reports that showed up in my email box. The backing deal could have went to zero and I still would have been a HUGE winner.

so I know this was probably off topic a touch, but thanks again Greg.

just my two cents-----J.Brown

[andyrogers]

lol

[Duke]

You seem to be implying that if someone stakes you 100% in a poker game, they'll get 100% of the wins/losses. This is not the case.

~D

[Martin Aigner]

Obviously not. What would be the reason for the player to sit down, if the backer would get 100% of the winnings/loss? An hourly rate? Guess no poker player would play for an fixed hourly rate without connection to the winnings/losses.

But yes, I thought that the backers and player would share the winnings/losses according to their percentual share. As Greg stated, that was not the case in his deal, and I can see why he did it.

Best regards

Martin Aigner