The Ultimate Guide To Buying and Selling Action (For MTTs and Cash/ Online and Live)
The poker economy operates much like any other marketplace economy and offers many unique buying and selling opportunities. While playing poker, you might hear or read about stories where players sell ‘pieces’ of themselves and invest in other poker players. But what does it all mean? This article is to educate you on how the poker marketplace works and how you can get involved with investing or selling action for yourself. We will get in to the process of both buying and selling action and looking at both perspectives. Note: This article is also different than STAKING, which is different than buying action (please see below for more details).
Disclaimer: This is not financial advice and is the opinion only of the author and no one else. Please do your own research. Scamming is also a very common thing in both the poker world and the poker economy- thousands of people have been scammed out of millions of dollars over the years. Be sure to do as much research as you can before investing in a package.
To begin, here is a short glossary of terms that you might see throughout this article.
Seller: The owner of the package, the person playing poker. This person is selling his action.
Buyer: The investor, or person who is buying the action.
Action: Action can refer to anything that the seller is selling- it can be a tournament, cash game, SNG, or something else. Basically, a poker event.
Package: A package is either 1 or many tournaments that are bundled into one ‘package’ and to be taken as a whole, which is presented by the seller. For example: A player may play 4 tournaments and put them all under 1 package. This allows the buyer to feel that he may be getting more value from buying action due to a larger sample size. A package can also be cash game action (either online or live) over a varying sample (time #, hand #, etc). Generally, when a package gets posted, players present their credentials, poker history, and what action they are selling specifically (as well as the financial breakdown). A package can also be cash game action with varying stakes, limits, games, and locations (more on this below).
Markup: Markup is the premium percentage that the seller is charging ABOVE what the actual cost of the action is. For example: a player might charge 1.20 markup on a $1000 tournament, meaning that the total tournament cost will be $1200 when you are buying action, not $1000. So if you were to buy 10 % of this player, you would be paying $120 for 10% , not $100. Players add mark up to their action due to paying for hotel, transportation, and food costs for live MTTs and also because they believe their skill level is higher than the field.
Piece: A piece is a percentage of the package. Pieces can be as small as 0.25%, depending on how much the package is. Generally, investors buy anywhere from 1-50% for their piece of a package.
MTT: Multi table Tournaments, aka big tournaments with large prize pools. The World Series of Poker is an example.
Book: To buy the action from the package holder (seller) and have this transaction be confirmed by the seller.
Choosing Your Marketplace
The first thing to consider is your marketplace. The most popular places to buy and sell action are: Twoplustwo (www.twoplustwo.com) , Pokershares (www.pokershares.com) ,Poker Market (https://pokermarket.com/), and Stake Kings (www.stakekings.com). Be sure to read the site policies and FAQs before participating. Some marketplaces charge a percentage in order to participate and will take fees in buying and selling action, much like a stock exchange, who charges transaction costs per trade.
Seller: As the seller, you should make sure that you are familiar with the marketplace that you are posting your package on and the policies. For places such as StakeKings, the site will take a percentage of the funds raised. Since you are selling action, make sure that you have a known reputation in the poker community that you are presenting to and have a credible reputation (more on this later). Make sure that the marketplace that you choose also has many buyers available and that the interface is easy to work with and present your package. Different marketplaces have different money transaction policies as well, so be sure to research those before posting.
Buyer: When buying on the marketplace, make sure you understand that the site may charge money in order to buy or sell action. When choosing what marketplace to look for action, be sure that you understand the risks involved- like many other unregulated industries involving lots of money, poker has many scammers and con artists who are always looking to take advantage of other people. For instance, the twoplustwo marketplace requires posters to have accounts for at least 6 months and several posts before they are allowed to post a package. Other communities or marketplaces may have similar or different policies.
Researching or Posting a Package
When buying or selling action, you will see players offering different packages and options for their clients.
Seller: As the seller, you will be posting your package on a poker marketplace and looking for people to buy your action. Be sure to include as many details as you can in your package post: Who you are, your credentials, what the package entails, and payment options. Be sure to also include references if you have any and also previous threads or examples where you sold a package and it was successfully completed (you received all funds from investors and sent all funds back to investors upon completion).
Here is a good example of a package.
It is important that your package is easy to read and organized. Spreadsheets are a big plus and are beneficial when showing people where you cashed and the math incorporated with it. Additionally, be sure to include tax information in this package and if your country has different tax stipulations than others- most people need to know this before receiving a surprise tax on their winnings.
Here are several other examples of good package posts:
Buyer: The key things to look for when buying a package are: References, markup, and player history. The actual games do not matter as much- most players who have big winning samples online are generally going to be decent favorites in live MTTs. Markup is also a big thing to consider- many poker players overestimate their edge and charge a high amount of markup. Player history is also key- some players do not update very well and I have ran into situations in the past where I bought percentages of players and had zero communication from there on out- no updates, no questions on using package money for tournaments that were not listed, and so on. As an investor, this is extremely frustrating.
You know the marketplace you are on, the policies of that marketplace, the package that you want to present (or buy)- now what?
Seller: Make crystal clear which payment methods you want well before the package starts (and what time deadline you want the money to be sent at). The general policy is: No money, no action (so if the investor has not sent the money by the time the tournament has started, the action is not booked). Make sure you understand the policies of the marketplace you are selling on (some marketplaces will escrow the money for you) and also make sure you understand the transfer policies on Pokersites or third party money transaction sites such as PayPal. Additionally, you will also have to understand that you will *generally* be paying out investors in the same currency/method that you received it in. So if you received $5,000 USD for 50% of your main event package and you won $20,000, you will likely have to give the person his 50% share in US$ currency. Exceptions may apply and be sure to think about this information BEFORE you post your package.
For example, PokerStars now has a policy where you need to rake x amount of money in order to withdraw it. While this may not be an issue for players who regularly play on PokerStars, it will be an issue for players who do not play there often and need the package money in a short time period. Note: Most poker sites require that you rake something before withdrawing those funds. So if you can accept PokerStars money as a payment method for investors, understand that they may want PokerStars funds if you do cash in your tournament.
PayPal and other 3rd party transaction services are also anti-gambling and will lock and close your account if they suspect you are using your funds in gambling transactions. Do not write anything gambling related in the notes and be sure to understand the risks involved in PayPal and other 3rd party services. It is often best to send the buyer your transaction information in a private message, NOT on the forum.
Buyer: As the buyer, you will need to get money to the owner of the package in order for you to consider your action as valid.
There are many situations that can get very messy in the poker world- many players will tell another player they will take x % of their package and that they will pay them back after the package is finished. While this can sometimes work between two trusted friends who have worked together for years, the standard is that the money has to be in the package holder’s account in order for the action to be booked. Many players will have this as a policy and it is a good one to have.
The process for booking a package:
1) Research the package you like. If you do, you can write in the thread or contact the buyer and reserve your action. The seller will generally hold your reservation for a limited amount of time (generally specified in the package details) and give you (the buyer) time to send him the money.
2) Send the buyer the money (generally people will accept multiple forms of payment) and remember: You will GENERALLY receive any future winnings in the same form that you paid (and currency). Do not send someone PokerStars money and expect the player to send back skrill.
3) Make sure that the package owner/seller CONFIRMS that he has your payment and has confirmed the action. If you are slow with your payment and time is getting tight, sometimes the seller will not be able to confirm the action and you may get into a situation where your action is NOT booked despite you sending the money before the package starts.
Follow Your Action
Now that you have confirmed action, what do you do?
Seller: After all payments have been received and confirmed, you are ready to start your package. This means that you are ready to play poker and play your package. Make sure that you are on time for each of your events and that you have excellent communication throughout your package. Twitter, email, facebook, and instant messaging systems are all good ways to stay in contact with multiple buyers. Be sure to update your chip counts and letting your buyers know when you have cashed or made money in your profit. Be sure to message all investors about any complications or changes with the package (sometimes you may not play all tournaments due to scheduling conflicts or running deep in one tournament) and be sure to be transparent with everything. Above all, communication is the number 1 thing to do while you are playing your package. Good communication and prompt payouts (when you win) will nearly guarantee you have future buyers for future packages. The above picture for this section is a great example of communication on twitter.
Buyer: After you have confirmed action from the package seller, be sure to add them on gmail, skype, twitter, or any other social media that your player uses. Be sure to stay active and to also keep tabs on your package- oftentimes players will not play all games or tournaments in his package due to timing/scheduling conflicts and they will sometimes use those unused buy ins in other tournaments. Generally, the seller confirms this with his buyers first. This entire process is very fluid and can change often, depending on how big the package is. Check your messages and social media often when following your package.
The action is all done and the package is finished. What steps do you take to payout investors or get paid yourself?
Seller: After the tournament(s) has concluded and the payouts are accounted for, you have a few things you need to do. If you did not cash or make any money, be sure to post in your package thread and/or contact all of the investors and tell them a summary of the package (it does not have to be long; just that you did or did not cash and which events/how much the payouts were).
After you have told them, be transparent and show the math of your cashes/payouts and also the total cost of the tournaments. Do the math for the investors! This is part of your responsibility as the package owner. An easy way to do this is to write out the total earnings per %. For example, if you cashed for a net of $1,000, you can write 1% = $10 and break down the amount that you owe each investor.
Make sure you understand the tax implications for winnings and if your country taxes poker winnings. Get information from your investors if you need to issue them a 1099 tax form in order for them to pay for their own taxes on your winnings.
VITAL: Have the investors check your work and be PROMPT when sending the payouts or refunds back to investors. Do not delay and if you do have financial transaction problems, be sure to be transparent and talk to your investors and explain why you have a delay. Slow payouts can be very damaging for your reputation and people sometimes question if you are paying at all.
Buyer: After the package is completed, be sure to check twitter, email, skype, and other forms of communication between you and the package owner. The package owner should be in contact and should tell you if there were payouts or refunds. Do not be pressing with the payouts- For example, if your package owner just won a big MTT for 6 figures and you invested 30% in their package, do not message them 30 minutes after they have won (other than congratulations) and tell them where to send the money. If they are professional, they will contact you within 24 hours of the package completing. Once the package owner contacts you, be sure to be ready to send them payment information and also any tax information (if applicable).
Posting a statement in the package thread (if posted on a forum) is also beneficial for all parties- it shows that the package owner was responsible and trustworthy and it shows you as professional for following up with the package. Provide tax information with the owner of the package if they ask.
Cash Game Action Buying vs. MTT Action Buying
How does action buying/package posting differ when comparing MTTs and cash games? The above mainly describes MTT packages. MTT packages are much easier to track, both online and live because there are third party sites such as the Hendon Mob (for live tourneys) and Sharkscope/Official Poker Rankings (online tourneys). Furthermore, twitter and taking pictures of tournament entry tickets are verifiable proof that investor funds have been used.
Cash games, on the other hand, are hard to track. Because cash game action is not verifiable and results are very difficult to track, it is important to do cash game action buying with people that you trust. You can have them take pictures of their chip stacks, but at the end of the day, cash game results are very easy to hide.
Unlike MTTs, cash game action does not have a specific beginning and end time, which is important when deciding when the package begins and ends. When buying and selling cash game action, it is important to note the duration and when you do your transactions/profit chops. For instance, the action may take place over the course of 1 session or 1 week or even longer.
It is standard for investors to take a percentage of the total cash game play for a specific duration. One full example:
David takes 50% of Will’s action for $1000NL (5/10) for 1 week. After the week is done, Will is down $500. David gives Will $250 (50% of the loss) and they decide to do the deal for one more week. In week 2, Will is up $5,000. Will gives David $2,500 (50% of the win) and they decide to part ways.
There are other different agreements in live cash games that include a guaranteed hourly, sliding incentive percentage splits, and others.
Staking vs. Buying Action
This is not a long article about the differences between staking and selling action, just a short note about the two and how they are different.
Staking: The staker puts up the money and takes 100% of all losses and anywhere from 40-75% (generally) of the profits. The biggest difference between staking and buying action is that all losses that are incurred on the stake go to makeup. Makeup is the amount of money that the horse has lost (since the time of the last profit chop) and the amount that the horse has to make back before getting profits himself.
Buying Action: The player/seller puts up anywhere from 30-95% of his own money for the action and then sells the rest. Any losses incurred are split amongst the player/seller and the investors (if the investors bought 50% of the package, they accept 50% of the losses). This is different from staking, where the losses are all taken by the stakers. Furthermore, there is no makeup with buying action; once the package is done, the transactions are settled and that is that.
Getting a staking agreement is for more longer term arrangements while selling action is more on a shorter term scale.
There is no ‘set’ way of doing things in the overall poker marketplace. As a backer and staker for the past 4 years, I have seen many different deals and agreements made. There are all sorts of different stipulations and agreements that I have seen that are not listed in this article. Some of those include: Player salaries, set hourly amounts for players, profit incentives, increased split percentages (%) depending on the profit, and many more.
The most important thing to remember when doing any deal (either as the buyer or the seller) is that you conduct yourself in a professional manner in all facets and stages of the process. Be prompt with replies, be trustworthy with transactions, and be open with your communication.
Top photo credit: http://401kcalculator.org/Flickr