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  • CrazyGabey

    Has anyone been staked before? Is there a commonly agreed upon percentage split for DFS staking? Discuss.

  • CrazyGabey

    @00oreo00 said...

    Staking is one way to go. Coaching is better IMO for DFS since DFS does not require the player to sit at a table for hours on end. Provide your partner with a solid lineup just before lock and you have a situation that is very similar to staking except your partner handles all his own money.

    How much you charge for that lineup is something you have to discuss with the partner. It can be a flat fee or it can be a percentage of winnings (10-20%). I have had good experiences with both methods.

    I agree 100% with this method, except the person looking to stake works 2-10pm and has no way of setting a lineup himself.

  • CrazyGabey

    @btwice80 said...

    I’ve also wondered how this type of investment would work. Would the $10K essentially be added to the player’s BR and he then just proportionately increases his daily action with the same cash game/GPP allocation as before?

    The player would essentially be using the backer bankroll alone on one site.

  • CrazyGabey

    @edwig said...

    Tony Dunst (Bond18) had a good overview of his poker backing arrangements on 2+2 that can help give you a grasp of the staking options and what needs to be done for it to succeed, found here:

    http://forumserver.twoplustwo.com/135/staking-seeking-stakes/official-staking-discussion-thread-use-thread-staking-advice-questions-166284/

    As for profit split percentages for situations in which the player is fully backed, these can go anywhere from 90/10 (Investor/Player) to 40/60 depending on: structure (with or without makeup), length of agreement (one off vs. continuous investment), and player skill.

    This was incredibly helpful, thanks!

  • britdevine

    • 2014 StarStreet MLB Playboy Mansion Finalist

    I have made deals with others in the past where I help them with lineups around lock time, and they send back 20% of the winnings, while assuming all risk for loses.

  • astukas

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    @britdevine said...

    I have made deals with others in the past where I help them with lineups around lock time, and they send back 20% of the winnings, while assuming all risk for loses.

    Thats a great deal for you. But you’d have to be an idiot to agree to the other side of that.

  • Razzle11

    @astukas said...

    Thats a great deal for you. But you’d have to be an idiot to agree to the other side of that.

    I guess it depends on all other circumstances as to whether it makes that other person an idiot. Tough to call somebody that without knowing all of the specifics of the situation.

  • astukas

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    @Razzle11 said...

    I guess it depends on all other circumstances as to whether it makes that other person an idiot. Tough to call somebody that without knowing all of the specifics of the situation.

    Well if we are talking cash games, lets assumer you need to win 56% to be profitable. If you are the one getting the lineups and giving up 20%, you would need to be getting lineups from someone who wins 76% just to break even. If you want to actually profit, you are going to need to find someone that wins 80% of the time. Good luck.

    Obviously the math would be a little different for tournaments, but giving up 20% of your winnings and taking all of the risk/losses is just an awful idea.

  • kaetorade

    • 2013 DraftStreet DSBBC Finalist

    @astukas said...

    Well if we are talking cash games, lets assumer you need to win 56% to be profitable. If you are the one getting the lineups and giving up 20%, you would need to be getting lineups from someone who wins 76% just to break even. If you want to actually profit, you are going to need to find someone that wins 80% of the time. Good luck.

    Obviously the math would be a little different for tournaments, but giving up 20% of your winnings and taking all of the risk/losses is just an awful idea.

    In the situation outlined by Astuka, you would indeed be foolish to give up 20% of your profit while assuming all risks. However, I assume that in Brit’s(and every other) situation, such a split is done over time. For example, if Brit won 60% of his cash games and there was a profit of $4k for a particular month, then the 20% would be applied to the $4k, giving Brit his cut of $800.

  • astukas

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    @kaetorade said...

    In the situation outlined by Astuka, you would indeed be foolish to give up 20% of your profit while assuming all risks. However, I assume that in Brit’s(and every other) situation, such a split is done over time. For example, if Brit won 60% of his cash games and there was a profit of $4k for a particular month, then the 20% would be applied do the $4k, giving Brit his cut of $800.

    True. I guess it comes down to whether you are paying 20% of profits or 20% of gross winnings. The former makes sense, the latter is a terrible proposition.

  • PJGuin23

    DFS Tax Guru

    @pmsimkins said...

    ^Exactly

    One big issue I have with what I’ve seen on here are the guys withholding taxes off the top. This is so wildly unfavorable to the people buying shares I basically consider it a scam.

    I would OPPOSE withholding taxes off the top VERY strongly. You never know what Federal, State or Local tax bracket one is in and those rates vary greatly. You don’t want to give Uncle Sam an Interest Free loan, but you also don’t want to get hit with nasty Estimated Tax Penalties. That would have to be determined by a tax professional then the recommended witholdings to each take place. For example, I’m out of Philadelphia and I would send 3.924% of winnings as an Estimated Tax Payment for School Taxes just to the Bloodsucking.. I mean Philadelphia Dept of Revenue let alone Fed and State.

  • razorsharp79

    @00oreo00 said...

    Staking is one way to go. Coaching is better IMO for DFS since DFS does not require the player to sit at a table for hours on end. Provide your partner with a solid lineup just before lock and you have a situation that is very similar to staking except your partner handles all his own money.

    How much you charge for that lineup is something you have to discuss with the partner. It can be a flat fee or it can be a percentage of winnings (10-20%). I have had good experiences with both methods.

    I would pay to see top NBA players like you construct multiple GPP lineups and explain why you did what you did. Or review LUs I have made and critique them. There is so much info online it is hard to comprehend what it all means and apply it effectively.

  • blaze1

    @CrazyGabey said...

    Has anyone been staked before?

    ……..one time. 20 oz. Porterhouse.

  • davefulche

    Seth, I feel the same way.
    Unfortunately, when I tried to start a staking thread on the site I was denied and told rotogrinders wants no more staking threads and a future post will be made about them. It was a 1065 ticket that I wanted to lower my exposure to while still keeping at least half
    Of it for upside.

  • CrazyGabey

    How do you think taxes should be handled in a staking situation? Let’s say a backer/player 50/50 split starting with a 10K bankroll.

    Thanks in advance for the replies!

  • Skipbidder

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    A staking arrangement should detail the length of time that it holds. It should cover which tournaments (or cash games) it covers. I.e. can the stakehorse play other tournaments as well, or is all action owned by the staker? (I strongly suggest that “all action” approach. Otherwise you expose yourself to hard feelings or angle-shooting.) Does the staker have the option to extend the stake period unilaterally if the stakee is negative? (I don’t like that, but some do.) If so, is there makeup? (That is, the deficit has to be covered before the stakee can take any profit.)

    There are those who will argue against the idea that you apply principles from other gambling endeavors to taxes for DFS. I strongly feel they are wrong, but remember that this position exists before reading the rest:

    One person’s account is going to be used for DFS purposes. If that player is getting issued a 1099 at the end of the year, they should issue a 1099 (you can do that!) to the other for the actual amount that changed hands based on the staking deal. That way each player will end up being responsible for the amount that they actually won. This is how at least some of the more organized and reputable staking or gambling groups do it.

    I strongly recommend that if you are doing this for any meaningful amount of money whatsoever that you have a prior written agreement in place. This will help to prevent any misunderstandings. It will also provide evidence to help you with your tax claim if needed.

  • tgowen

    • Blogger of the Month

    I’m not trying to get this thread off topic, but doesn’t the growing idea of staking/coaching then potentially lead to a potentially huge issue with lineup sharing? How then do we address this, or have we just decided to come to the conclusion that it is acceptable or not at all manageable?

  • PJGuin23

    DFS Tax Guru

    @Skipbidder said...

    A staking arrangement should detail the length of time that it holds. It should cover which tournaments (or cash games) it covers. I.e. can the stakehorse play other tournaments as well, or is all action owned by the staker? (I strongly suggest that “all action” approach. Otherwise you expose yourself to hard feelings or angle-shooting.) Does the staker have the option to extend the stake period unilaterally if the stakee is negative? (I don’t like that, but some do.) If so, is there makeup? (That is, the deficit has to be covered before the stakee can take any profit.)

    There are those who will argue against the idea that you apply principles from other gambling endeavors to taxes for DFS. I strongly feel they are wrong, but remember that this position exists before reading the rest:

    One person’s account is going to be used for DFS purposes. If that player is getting issued a 1099 at the end of the year, they should issue a 1099 (you can do that!) to the other for the actual amount that changed hands based on the staking deal. That way each player will end up being responsible for the amount that they actually won. This is how at least some of the more organized and reputable staking or gambling groups do it.

    I strongly recommend that if you are doing this for any meaningful amount of money whatsoever that you have a prior written agreement in place. This will help to prevent any misunderstandings. It will also provide evidence to help you with your tax claim if needed.

    Stay away from DFS as “gambling”. I do agree however with issuing 1099s to backer in case of winnings. If they win over $600 then it’s automatic and if an aggregate large amount, even less per backer. Example $500 per backer for 30 backers. You bet your ass the IRS would want to see 1099s issued for $15k in payouts.

  • TwoSHAE

    @00oreo00 said...

    Staking is one way to go. Coaching is better IMO for DFS since DFS does not require the player to sit at a table for hours on end. Provide your partner with a solid lineup just before lock and you have a situation that is very similar to staking except your partner handles all his own money.

    How much you charge for that lineup is something you have to discuss with the partner. It can be a flat fee or it can be a percentage of winnings (10-20%). I have had good experiences with both methods.

    This is multi-accounting / should not be accepted in the industry. You’re doing all the work providing a lineup for a financial incentive, and if you’re getting a percentage of the winnings, it’s even worse because your financial incentive will be directly correlated to how good of a lineup you provide.

    In poker this is the equivalent of having someone with an unknown and probably losing account (like a friend who is not a professional) play against a player at high stkaes who 1) is weaker 2) you have reads on. But instead the owner of the account just sits there and clicks the buttons I tell him to. This is not okay in poker and shouldn’t be considered okay in DFS (especially if you’re talking about cash games).

    All “coaching” (which is pretty lol anyway— look where sharing good information for free/cheap took online poker…) should be done after the fact, ie giving lineup analysis the following day or at the very least after lock.

  • Z06Fanatic

    hey guys – give me some thoughts on this staking arrangement……I was talking with a top player on starting a staking arrangement where I would provide the capital and in turn he’d give me coaching/lineup construction…we’d have your standard poker “makeup” and would be playing GPPs……to me this seems like a reasonable deal for both sides – he gets to make variance free money and I get to learn/also make money….what do you guys think?

    edit – for those who dont know what makeup is – say you enter 1,000 dollars into GPPs and lose, then the next day you enter in 1,000 and win 5,000…….instead of splitting that 5k equally, with makeup you would subtract the total investment (2k) and end up with 3k profit split 50/50

  • huitcinq

    @Taylor said...

    Staking in DFS makes almost no sense. There are a few exceptions and those only apply if you’re talking about an extremely large event and/or amount of buy-ins that even most winning players would not be properly bankrolled for.

    The reason for this is that it is incredibly easy to build a bankroll in DFS if you are good at DFS. When you are good at DFS, the game is extremely scalable. There’s a reason Condia sits at every “table.”

    The problem with DFS is that it’s very hard to be “really good.” Most players are not “really good.” It takes a full time effort to be “really good.”

    In truth, DFS is more like sports betting, not poker. A couple of guys at each sport are going to make a big chunk of the profits and everyone else is fighting for some scraps. Do you see people asking for stakes in sports betting?

    I disagree completely. A good cash player in DFS has steady returns that are very attractive for an outside investor. I will very likely be staked $10k for the next NFL season. I don’t need the $10k, but I’d be a fool not to add it to my roll and increase my potential profits.

  • iconfantasyJoe

    I really thought this was a stacking thread that started with a spelling mistake.

  • leafs93

    a split in favor of the expert in dfs on the premise of the player got a 50/50 or 60/40 split in poker is a god awful argument and terrible deal for the backer. The DFS player would already be investing time in his own research so if he where to take on cash from a backer it would only increase the amount of money he would be playing nightly while not increasing his time commitment at all. I think the backer would ill advised to take anything less than 60%.

  • PJGuin23

    DFS Tax Guru

    @leafs93 said...

    a split in favor of the expert in dfs on the premise of the player got a 50/50 or 60/40 split in poker is a god awful argument and terrible deal for the backer. The DFS player would already be investing time in his own research so if he where to take on cash from a backer it would only increase the amount of money he would be playing nightly while not increasing his time commitment at all. I think the backer would ill advised to take anything less than 60%.

    I agree with 60 backer /40 player for profits. Also have a good staking agreement in place. In poker there are some agreements where the backer has recourse. Wording it is also crucial.

    I’d also strongly recommend forming an LLC and separate business bank account if you decide to be a staked ‘horse’ so to speak. You need to protect your personal assets! For any specific tax or legal advice, speak to a professional. You will need it.

  • TwoSHAE

    Blindly spamming %s without very specific details on all other terms is completely worthless (as it would be in poker as well). I have staked people 60/40 (me/them) and 30/70. “You tell me the price, I’ll tell you the terms” applies here.

  • huitcinq

    I’m looking at a 10k stake in my bankroll for the entire NFL season. 50:50 split of all profits generated by that 10k.

    So if my roll is 30k, I add in 10k for a total of 40k. He gets 50% of his 25% portion of the profits, so 12.5% of my total profits.

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