Staking
Staking is an arrangement in which a backer pays for a player's buy-ins in exchange for a share of his winnings. The player plays with the backer's money and does not risk his own.
The simple explanation
If a player does not have enough money to enter a big tournament, a backer may pay the buy-in. When the player wins, the winnings are split by the agreed percentage. If he loses, the backer loses his investment.
A closer look
Staking deals vary: the backer may cover all or part of the buy-in, the profit share can be 50/50 or different, and there may be makeup, so that past losses must be recovered before profits are shared. Players can also sell pieces of their action at a markup. A clear written agreement is vital, because disputes about money are common. Check the reputation of the other party.
A practical example
A backer pays a $10,000 buy-in for a player in exchange for 50 percent of the winnings. The player wins $40,000 and gives $20,000 to the backer.
Full explanation
Staking is an arrangement in which a backer pays for a player’s buy-ins in exchange for a share of his winnings. The player plays with the backer’s money and does not risk his own.
Staking means that someone else pays a player’s buy-in.
The backer gets a share of the winnings.
Many deals include makeup.
Always have clear terms in writing.