To many people this may sound crazy, but I recently invested in a poker player for the first time.
Investing or “backing” poker players has become more popular in recent times with entire websites dedicated to brokering these transactions.
But perhaps I should take a step back and explain why anyone would want to invest in a poker player. After all, isn’t the fun of poker actually playing the game?
Why Someone Would Invest in a Poker Player
Poker, like most casino games, can be fun regardless if you win or lose. Also like other poker games, any given day a relatively new player can beat even the best players.
Many experienced poker players feel they have at least a slight edge over the rest of the field. Because of the high level of variance in poker, or in other words the odds of a worse hand or player winning any given hand or tournament, poker players need to be playing their top game every single hand to maintain their edge or advantage. This can be mentally draining over the course of hours and hours of play.
All of this can be bypassed by investing in a poker player instead of playing yourself. You still are exposed to the upside that comes with poker tournaments, but you don’t have to deal with any of the physical and mental strain of playing optimally for hours and hours at at time.
For me investing in a player was fun because I’m not able to play poker nearly as much as I would like to. I went to Vegas for four days recently and played seven tournaments in that time, but I have trouble even playing one tournament a month or every other month at home. There’s simply too much demand on my time to be sitting at a table for 8+ hours.
How I found this player
In short, Twitter. I have a ton of lists on Twitter ranging from “Health Care” to “Minnesota” and all the way down to “Minnesota Poker.” My Minnesota Poker list consists of regular players in Minnesota and, more importantly, casinos and card rooms in the State. In all honesty the main benefit of this is to get in on giveaways for free tournament seats, which I’ve won a few times.
The player I invested in I had played with once a long while back, but even more than that she seemed to take the game very seriously. Because of how level the playing field is in poker with a huge number of players with a lot of experience, it’s important to always focus on improving your game.
When I saw her tweet that she was selling 65% (i.e. she would buy in 35% with her own money and sell the remaining 65% to investors) I thought “why not?”
Vegas baby! Holler if you want some of this 🖤 pic.twitter.com/xZZq1xzL6C
— 𝑒𝑚𝑖𝑙𝑦 𝑏 (@OhDagEmily) April 17, 2017
One thing I really liked was that she was playing a lot of events. Like I said earlier, there is a ton of variance in poker and even if you are playing your best you could easily lose ten or twenty tournaments before cashing in one.
So I bought 2% of the action, or $218.
How the transaction went through
There are entire websites that broker investors and poker players, but more and more I’ve seen a more casual arrangement where people tweet out that they are selling action and broker it that way. It can be shocking how quickly some people get backed through Twitter. But then again there’s a lot of people who would be shocked to hear that investing in poker players is even a thing!
After DM’ing with Emily the transaction went through quickly. I use PayPal all the time for the blog, so I was able to quickly send her money for my 2% stake.
How Much I Made (or Lost)
On to the fun part – following our player’s Twitter account as she posted updates from each tournament she played in. While she had mixed results early on, she went very far in one tournament and was SO close to a $100k score from a buy-in of $200. She ended 7th out of over 3,000 players in a tournament for a nice $11k cash.
Out 7th, we ran AQ<AK we turned 2 pair but he flopped his two pair. GG pic.twitter.com/0jXb48ZT4P
— 𝑒𝑚𝑖𝑙𝑦 𝑏 (@OhDagEmily) June 12, 2017
Because she was playing in a number of multi-day tournaments, she didn’t end up buying in as much as originally planned (around $10k). That was actually good news for investors because it meant instead of simply breaking even with the $11k cash, everyone made a nice profit of ~93%.
My $218 turned into $420. Not bad for my first poker investment!
Would I do it again?
I would definitely back another poker player in the future, but it’s easy to get on board with something that starts well. Poker has a lot of variance so I could just as easily lost my $218 I invested if one hand of one tournament had a different result.
I’m pretty open to alternative investments and I think it’s important to be open about how we can make our money work for us. With that being said, investing in poker players isn’t for everyone and I really wouldn’t recommend it if you can’t handle the thought of losing your entire investment. More likely than not that’s what will happen.
Have you ever made a non-traditional investment? What was it and how did it pan out for you? Would you consider making non-traditional investments in the future?
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Buying action! Interesting post. Any thoughts on what investment return an above average player would provide? For example, if you invested in Emily “stock” 100 times, what would your average return be?
Oh man this gets really complicated because the beauty and draw of poker is that the true “edge” that any one player has is very subjective and up to interpretation. What if the field was 50% softer or 50% more difficult than previously anticipated? It would totally alter the edge. Or a bad table draw, etc. I’m not even sure how to normalize it. I’d say most players like Emily who are really serious about their game will always have *some* sort of an edge in the Vegas because they draw so many casual players, but to put numbers to it would be pretty difficult.
Hmm I’d never heard of such a thing. Interesting concept, not having any poker playing Twitter links can you throw up some links to the brokerage sites you mention. I prolly won’t invest this way but I am curious enough to read more.
I think a lot of it has moved to Twitter to be honest. Poker players have such a presence on there and it allows them to update chip counts and whatnot. Plus, at least for me personally, I feel better about investing in someone who I’ve followed and feel a connection to than a random person posting on a site. If you want to check out a site this is probably the top one out there (there’s tons of sites though): https://www.chipmeup.com/
Ok this thing about hire a pocker player seems interesting from a point of view but to be honest I’m not interested into this field, maybe because I am not a good gamer…however it can works for someone and doesnt’ for others…but is been interesting to know how it works!!!
Yes it definitely would be better to have a good understanding of the game and how it all works. I wouldn’t have done it if I hadn’t played poker for years and years and have a good understanding of the game, who has an edge, etc.
Interesting idea. I might be open to this, but only by investing in someone that I really trust (i.e. close friend or family member) that I know has had success in actual tournaments before. This isn’t really investing – it’s still gambling whether you are playing or you are paying someone else to play for you.
The debate will rage on forever of whether poker is gambling or not : ) It’s a skill game where you can improve your game and have an edge. Just because that edge is extremely difficult to know or define in any given tournament, cash game, etc. doesn’t mean it doesn’t exist. I think professional players, especially those who have moved on to simply backing players full-time would strongly disagree that it’s not investing.
I didn’t realize you could invest in a poker player… what an interesting concept!
Yep it’s very easy to find people looking for investors on Twitter. Lots of poker players looking to play high buy-in tournaments but variance is tough. Selling their action makes it much more manageable but still gives them a lot of exposure to upside (and their investors as well).
This is a fantastic post, now just invest the winnings and you’re playing with house money!
Haha I actually would have but Emily sold out her next Vegas trip within a couple hours of posting it!
I like this concept. It’s one of the reasons I’ve invested in blockchain/cryptocurrencies. Soon applications built on smart contract platforms such as Ethereum will allow you to invest in musicians, artists, sports players, etc… Think crowdfunding but with a way to get a return on your investment.
Oh I have some strong opinions about cryptocurrencies! That’s for another post : )
Wow! I love this one. Has some risks but sounds so much fun. For my part, I’ve been spicing up my investing life by buying a rally car (Ford Escort Mk1) and expect to double what I put in it. Still, this is something else….
Wow a rally car? Now that’s something. Alternative investments can be fun but sometimes blur the lines between entertainment and sound investing : )
Loved this article, but must agree to disagree.
You cannot “invest” in gambling. This is a bet, with no way to minimize losses, i.e. losing 100% is a very real possibility. I mean, you’ve basically chosen the horse in the race that you think has an edge… but this is just a gamble. I would be careful calling it an investment. Pretty soon you’ll be “investing” at the black jack table, “investing” in roulette. Is my March Madness bracket an investment? But I really think my team has an edge! lol.
But thank you anyway for your creativity – you really made me examine my beliefs and clarify my definitions in order to make this argument!
Yes we will have to agree to disagree! I don’t like that you lumped poker in with blackjack or roulette. Those games both have defined odds – poker does not because it’s relative to other players. I do not think the slippery slope exists where someone who backs poker players as an investment would start “backing” blackjack players or “backing” roulette players. It”s apples to oranges.
And I do think there are people who bet on sports who have an edge. There’s a reason there are pro DFS players who clean house (another game where skill is involved).
My March Madness bracket is gambling for sure…because I know close to nothing about basketball.
However, I used to work at an HR consulting firm chock full of actuaries, who would use algorithms and stats to fill in their brackets. They definitely had an edge over me, their brackets were probably more of an investment than mine was.
This is like investing in the stock market though too. You really don’t have a lot of control over how companies are run, the decisions they make, or external factors impacting their bottom line.
At the end of the day, all investing contains some of the risk that “gambling” does. I think everyone has a different level of risk they are willing to take on. And every one’s definition of “risk” is different given their knowledge and experience.