A question: The fundamentals of backing

[LaggyLou]

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I hate this thread so much, for so many reasons, and I just wish it would die. What I post here, may either render the point moot, or stir up another 1000 views. I hope I am not over-stepping my bounds, but when I first approached Irieguy about backing this is the response I received:

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No, it is a good thing that you posted, because this (if it the same as was sent to GF) is the information needed to resolve this matter.

Frankly, until reading this, I believed that GF had the better of the legal argument (yes, I am a lawyer. This is not lgal advice, etc.). My understanding of typcial staking arrangements is that the staker takes the risk of loss. If, for example, I sell a piece of myself for the main event of the WSOP, and I lose, I don't have to pay it back. Even if a couple of months later I use my own money (or another backer) to buy into a WPT event and win a million. At least, that is how virtually all of the staking arrangements I am familiar with have worked, and the rest have been similar (limited in time, but not necessarily to a particular event).

The difference here is that Irie has specifically stated that his deal is really a loan that will only be forgiven if the borrower quits poker (the "forever and ever" clause). Now, personally, I think that it is an absolutely terrible deal, but that doesn't matter. If GF got such an e-mail and took the backing then Atticus's analysis is right, and GF must pay back the roll along with any excess profits.

[FishBurger]

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If you never pay me back... then you owe me 50% of everthing you make at poker forever and ever.

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I have to change my vote from Gaucho to Irie if this language was in the e-mail that Irie sent to Gaucho. This makes it clear that Irie expected to be paid back if Gaucho continued to play poker after losing all of the initial stake.

[jah0550]

Where is my damn money? LOL

[KenProspero]

Group:

Having read as much of this thread, as I can stomach, let me put in my two cents.

As best as I can tell, here's what happened:

1. Irie bankrolled Gaucho for a set stake.
2. Irie was to get 50% of the profits until his stake was paid back.
3. Gaucho lost the stake, so there were no profits.
4. Gaucho now uses his own money to play (and wins).
5. Gaucho says that the 'deal' ended when he ran out of Irie's money.
6. Irie says that the deal continues until he's paid back.
(Edit -- reading back, it's arguable that the deal isn't forever, but instead applies for the first 500 SNGs that Gaucho plays the agreement also says that if not paid back, the deal goes on forever and ever -- It can be read either way.)

7. Gaucho wants to know 'what's standard' in these cases.

The problem, as I see it, is there is no 'standard'. The deal is what the deal is. Lots of people have given their views, but in the end, the 'deal' between Irie and Gaucho doesn't appear to have been 'drafted' well, and is open to interpretation.

For what it's worth, I'd view it as follows.

Pretend that there's a business "Gaucho Poker Ltd". Irie invested in this business. He's entitled to half the profits, until his investment is repaid. (Edit -- or until Gaucho competes in 500 SNGs)

The fact that Gaucho ran through the investment doesn't mean that Irie still doesn't have his investment.

Gaucho now uses his own money. IMO, that's fine. If Gaucho had originally lost his own money, I'd probably argue that he doesn't owe Irie anything until he breaks even (on the money Gaucho put in).

Once Gaucho starts turning a profit (i.e., Gaucho Poker Ltd turns profitable), Irie is entitled to his bargain, i.e., half the profits or his money back. (edit -- or Gaucho's playing 500 SNG's, if this interpretation is correct)

Now, is my view dispositive -- of course it isn't. There seems to have been ambiguity in the original agreement.

That being said, it comes down to doing what you think is right. Gaucho. Some have agreed with you, some have disagreed with you. In the end, whether you're right or not, if you don't pay Irie back, some people are going to view you as a Welcher.

I take as an article of faith, Gaucho, that you truly believe that you're right, and are not trying to Welch. However, I think based on the length of this thread, that you have to recognize that reasonable minds will differ. I really think you and Irie should try to work something out.

Irie -- personally, I think you're right here. Also, I have tremendous respect for you for only engaging in this debate in a limited manner. IMO, you also have to recognize that there is some reasonable difference of opinion with Gaucho as to what you agreed to.

That being said, maybe the two of you should resume communication and try to reach some kind of amicable accord.

[AtticusFinch]

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Also, I have tremendous respect for you for only engaging in this debate in a limited manner.

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As do I. I think both parties have revealed their character.

[kamrann]

Wow, this thread has amazed me somewhat. Yes, it just comes down to this question. If Gaucho received this email then he owes the money. If not, and there was nothing else that we don't know about, then based on Irie's original post, Gaucho owes nothing. You can argue that morally it may be right to pay back something because there was a misunderstanding, but this isn't really the point. It was up to the backer to make it clear in writing what the deal was. If Irie thought he had been clear it was a loan, and Gaucho thought it was clear it was an investment (which is certainly what I would construe from the original offer), then it really isn't fair to come down on the guy like so many posters on this thread have done. And since noone knows all the information, I'm a bit shocked that they have done. Just because Irie is well respected and Gaucho is unknown that's no reason to attack him. Although I will admit that it was a very poor choice on his part to post this, since it was abundantly clear who the backer was, and this shouldn't have been made public. That's all I'm going to say on the matter.

[EarlCat]

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4. Each time you are ready to move up a limit, I will provide you with the marginal increase in bankroll needed. You will always give me 50% of your profit until the deal terminates. You can terminate the deal by paying me back the entire bankroll. My profit-sharing payments do not count towards bankroll pay-off. If you never pay me back... then you owe me 50% of everthing you make at poker forever and ever.

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If this was the deal, it's time to pay the piper.

[Phil Van Sexton]

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Profit = Current Bankroll - Original Bankroll

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So if he deposits $5000 into his account, he immediately owes Irie $2000? ($4000 = $5000 - $1000, Irie gets 50%=$2000).....and he still owes the $1000 principal.

[Post-Oak]

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What I hate most is that Gauchofish has taken advantage of the kindness and trust (although monetarily motivated) of a stranger.

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Wow. You guys really have gone overboard.

Kindness and trust?????????

His terms are completely onerous and one sided!

I agree that if Gaucho received this same email, then he still owes the original stake. It is clearly spelled out. But where does Irie find the SUCKERS who sign off on that deal! What a RIPOFF!

I especially like the part where he offers to keep incrememtally upping the backing amount as you win him money. Basically, your hole gets dug deeper and deeper. You can win him thousands and thousands of dollars, but then if you go on a losing streak and lose the whole roll, you will still owe him serious cash (unless of course you quit poker forever, muhahaha).

Irie's original post should have said:
This is a freeroll, because if you lose you don't have to pay me back, BUT I OWN YOU FOREVER AND EVER! MUHAHAHAHAHA!

[DonButtons]

Wow.

This is a very sad case, specially posting this in this board without asking irieguy first, he maybe didnt want this kind of publicy.

I must get a ton of "can you back me private messages" even though I never made a thread/post on here, but because of my recent results in multis, and thats why I dont like doing backing deals with people I dont know/trust. Irieguy went out of his way to back you, not even knowing you.

The freeroll part is a catch, just like microbet stated, he backs you till he sees your not a winning player, because a winning player will generate profit over time, and he's willing to give you a decent bankroll to get over the variance which causes most low limit sng players to go broke. I for one, think if you completed your set of sngs already, that you owe him the whole bankroll plus 50% of your profits. If you havn't completed your set # of sngs yet, then you owe him 50% of your profits you made so far.