Ryan Fee Discusses WSOP MTT Staking for Investors
As Upswing Poker pros turn their attention fully towards the World Series of Poker, the topic of WSOP MTT staking has come to the forefront thanks to a recent Poker Life Podcast episode hosted by Joey Ingram. Now that the action in Vegas has neared full throttle, so have the number of player-marketed packages being offered to investors across a wide range of public websites and forums.
With this in mind, Ryan Fee took some time out of his schedule Tuesday before heading to the commentating booth to educate Upswing Poker subscribers on what to look out for when investing in a package offered by a WSOP-bound player. The following is taken from a Tuesday, June 7th Skype round-table discussion.
High Stakes vs. Low Stakes Investors
For starters — Fee, along with high profile poker players Jason Mo and Moritz “muckcallok” Dietrich — believe there is a clear discrepancy in value that investors can obtain when comparing packages offered by lesser known commodities to those of established high stakes pros. “Small stakes investors will never have a chance to invest in the best players,” says Fee. This is due to the fact that many of the best poker players are either self-rolled or already have a group of backers they are comfortable entering into business deals with.
The consequence of this is that the packages currently being offered on public sites are “second-tier” or even “third-tier” deals that may be unlikely to provide long-term value to backers.
Beware of Results-Oriented Packages
There was an interesting discussion on how to best calculate a horse’s WSOP expectation that ensued almost immediately after Tuesday’s conference had begun. How much confidence can an investor have in a player’s ability based solely on live tournament results? Do solid results after one year make for a sure-fire winner? How about three years?
The ultra-high variance of many WSOP tournaments provides a unique challenge to would-be backers. How can you determine a sweet spot markup that will benefit both player and investor?
“Estimating a poker player’s tournament ROI is VERY difficult — at best,” Fee explains.
There are people selling action who have a positive expectation, but that doesn’t necessarily make for a winning investment once markup enters the picture. Premiums directly cut into potential profit for the backer in such deals, plus some packages are sold at higher rates due to the high profile status of certain horses. “In many cases, players who have achieved some form of poker notoriety are not the great value they might appear to be.” Often times these personalities “leverage” their personal brand (sometimes unconsciously) and charge higher markup than a similarly-skilled player.
A live, major tournament event specialist can have a clear positive expectation in certain events, but coming up with a precise ROI percentage on that edge versus the field is not easy. “Some players are winning at 100%, but most are not. Many winning players have ROIs ranging from 10% to 60%. Typically, markups range from 1.1 to 1.4. This is where the rubber meets the road. If you are buying a 20% winner at 1.3, you would effectively be losing 10% of your investment.”
Investors should definitely do their “due diligence” prior to forking over money to a player they spot on a forum — and basing that investigative process solely on a handful of deep live runs is a recipe for an unfavorable deal. Factors such as personal experience playing against the horse in a live setting and going through tracked online results are more reliable indicators of profit-making potential.
An Accounting Nightmare
Ryan Fee no longer engages in “buying pieces” of players. Why? Because the paperwork that goes into sorting out who won what after the fact can quickly morph into a part-time job for an active poker backer.
The former Latin American Poker Tour and WPT Bay 101 Shooting Stars champion strongly suggests that any U.S. resident seek the professional advice of a Certified Public Accountant to facilitate this process. In other words, there is a lot more that goes into receiving a payout once a horse has had success in a staked WSOP tournament.
Questions to Ask Before You Buy
If you’ve got some money to throw around on WSOP tournament players this summer, chances are you’ll get quite a bit of instant feedback from horses if you enter one of their threads. Questions are posed on forums constantly — and replies generally range from vague references of ability to outright dropping a deuce on inquisitive backers by belittling them.
Still, if you want the best bang for your buck, ask your horse the following…
- Does the player have established online results? Or is he/she an established online poker player?
- Does the player have experience going deep in major live tournaments?
- How are winnings handled accounting-wise? What about non-U.S. players who must pay a flat, percentage-based tax fee on WSOP winnings?
- What type of field is the player competing against? There is a big difference between the massive, casual-heavy field of the WSOP Main Event compared to smaller field mid-week tournaments.
On Your Mark, Get Set…
Many casual poker backers mainly enjoy the “sweat value” aspect of investing in a WSOP player. The World Series of Poker is a marquee spectacle that draws an engaged, worldwide audience. Staking a tournament player is a great way to get in on the action, and there are far worse investments one could make than opting for a slightly overpriced package.
If this year will be your first attempt at staking someone at the WSOP, enjoy the experience and continue informing yourself as you progress.
Best of luck to all Upswing Poker subscribers who will be participating in this year’s WSOP as a player, backer, or both. Be sure to come up and say hello if you’re out in Vegas and spot an Upswing Poker pro!
Check out more on the world of poker staking in both tournaments and cash games here.