Case study: Staking Dispute

This thread has some seemingly interesting implications. We’ve seen many of these ‘cases’ of ‘dispute’ between horses and backers of the years. Because of changes in technology (today), we should step back and re-evaluate certain aspects of the game such as this.

First we might ask can and should one expect a ‘fair’ or ‘just’ arbitration from the players community (specifically today 4)? There must be a % chance that the arbitration conclusion holds in this fashion. There must also be certain ‘players’ in this game that are more ‘fair’ or ‘just’ in this regard as well.

So when a horse/backer posts a claim to be arbitrated, seemingly based on the communities individuals knowledge we might get a certain array of answers, weighted towards some certain decision.

And depending on the sample (if too low for example), it might not be possible to determine with any confidence what the community even has collectively weighted as the correct conclusion.

This might then be analogous to the community strategy problem, in that often the masses disagree (or miss the optimal line) with the decision that the top most player might make. So we worry not only do the ‘masses’ not make the optimal decision, but that we cannot even define the masses decision.

This might cause the OP, to come to the initial conclusion they are correct, based on cognitive bias. And if this were in fact true, then all feelings of ‘just’ arbitration might in fact be only this.

If we can look at the extremes of the possible judgement (which coincidentally is often what the backer/horse wish to do) we can easily see that any arguments over the decision MUST involve both perfectly rational people and those that are completely not rational. We can understand this without even knowing the outcome of the arbitration, but with the simple knowledge that one side MUST be wrong and therefore illogical.

I wish to look at some of the comments in this thread so we might compare these two peoples of people, and possibly (against common intuition) be able to extrapolate the truth as to which side is professing reason and which side is not knowledgeable to come to the correct or ‘fair’ conclusion.

I do have a conclusion of my own, that through my own cognitive bias I perceive as correct, and so then I also do have a judgement as to whether this was a ‘good deal’ or a ‘bad deal’, involving either good horse/staker, or bad horse/staker.

So ill look at some posters quotes below.

Originally Posted by Poster A
As far as I know a player is always entitled to quit poker, meaning the term (and similar terms) “You are not allowed to quit the stake prior to completion of these sets. If you want to quit midstake while in makeup then you will owe 50% of the makeup back to us.” will only apply if he is actually going to play poker again.. If he decides to play poker again then you should be entitled to either him buying out of MU or continuing to play under you as agreed..

This is quite telling to me, seemingly older post, but the poster’s knowledge of poker maths are well respected in the community, or rather I’m sure they would be up for a challenge in this regard.

Originally Posted by Poster B
Seems pretty simple… if something was agreed to it should stand, whatever reasoning is correct or wrong, whatever was agreed upon was agreed upon and the backer has the right to hold the stakee to this. Also seems very reasonable that you’re already cutting the 50% to 33%.

Of course a stake is not a loan but certain agreements must be made otherwise it’s too easy for someone to freeroll for large amounts of money without consequence.

I guess if he quits poker forever there’s a grey area there as it’s a lot harder to pay off 2400$ without poker. But ideally this scenario was discussed beforehand as well.

And here we already have our conflict, seemingly someone between poster A and B is clearly wrong.

Originally Posted by Poster C
“You are not allowed to quit the stake prior to completion of these sets. If you want to quit midstake while in makeup then you will owe 50% of the makeup back to us.”

This seems to be laid out pretty clearly in a contract.

Therefore, the simple answer is that he owes 50% of the makeup.

However, it’s a little more complicated than that. If he doesn’t want to pay 50% of the makeup, the solution for him would be to play the 190 remaining tournaments. It may take a while, and by the sounds of it, he won’t be motivated. This wouldn’t be good for either party.

Therefore, I’d consider changing the terms of your contract from now on, as you don’t want to be left in a situation where you have someone playing for you that doesn’t want to.

Since he’s refusing to play at all, I will say it’s pretty awful on the horse’s part to not be able to finish 190 tournaments. Why doesn’t he just finish it up over a long period of time? It’s not like a prison sentence, it’s 190 tournaments. He agreed to the contract and really should honor it to the best of his ability if he has a moral code.

Poster C seems to agree with poster B, and is another well known well respected reg in the community. But it is interesting that we point to a moral code, as it is my understand that is all a ‘poker contract’ is, since under any reasonable law that exists today there is to be no upholding of such contracts. I think this posters initial intentions do not agree with their bolded ones, and so I think in essence and the long run they can be shown to agree with poster A.

Originally Posted by Poster D
I disagree. The ‘I’m quitting poker forever’ opt-out doesn’t apply here. Backer purchased makeup from another backer and gave more than a fair deal to Player to continue playing backed.

Was Player obligated to play ALL 3 sets of 300 since the makeup was spread across them? Or is there a loophole that allowed him to play Set 1, get paid and then quit? If this is the case, Backer set himself up to be taken advantage of.

The outcome to these situations is always tricky. You can’t tell him to pay the agreed upon penalty in the contract because then he’ll opt to finish the set (and quit after that one if he’s contractually permitted to), get paid if he won and leave you with 2/3 of the makeup that was meant foe the next 2 300 sets.

If this loophole is not there, and if him already quitting isn’t in any way binding, you’ll be taking back a player that won’t put forth the effort he’s capable of because he just wants out. You have no choice but to compromise. Up to a panel. These are the times it really sucks being a backer.

Contracts don’t cover all scenarios. In the end, Backer having bought the makeup, with an agreement with Player overrides his personal situation. Backer should not push for the maximum (because it’s in his best financial interest not to) but should receive a compromised settlement which in the end leaves him slighted. Oh how I miss backing even still

Again we see to have someone that disagrees with A based on the provisions signed in the contract should hold regardless of outside circumstances.

Originally Posted by Poster A
Of course, to be clear I what I said was a “technical” thing rather which ignored morals. As with “real life” legality doesn’t always mean morals etc.

As someone who has both backed and been backed I think a horse should basically not quit poker in make up etc, and obviously I would never (and hope no one else would ever) let make up be sold knowing I might quit poker. I think it blows hard if someone is in make up and says they are gonna quit poker, and I wouldn’t do this myself, but I do see why a player is “entitled to this” and also why it doesn’t make much sense for a backer to try force a horse to play when/if they are in this mindset for obvious reasons. To be clear I certainly think the player should either pay the (generously) discounted MU offer, or just finish the deal.

I tended to not only agree with the bolded, but I also suspect it is the crux of the issue here.

Originally Posted by Poster E
This is only tricky because [as i understand it] his initial contract (whether implied or explicit) basically lets him quit poker and pay nothing. That means when you bought the makeup, you had no leverage to ensure that he would owe makeup under this condition.

By your account, he was aware of this repaying-makeup condition and agreed to it. But was there offer and acceptance? Basically, he cannot concede this repaying condition without gaining something. Aside from the clause about repaying makeup, if your terms of the deal are non-negligibly better than the terms of his previous deal, then he owes the full amount agreed to. If not, then he doesn’t owe.

Finally in these situations, it’s obviously going to be hard to get someone to pay, kind of like squeezing blood from a stone. So it doesn’t really matter if you are in the right. Honestly, if he can’t pay, I think he should just play slowly part time until he finishes it off — if he’s staked for big MTTs then he has a legit chance at a big score; if its small MTTs then he can grind through it very quickly.

Seems quite reasonable and less one sided. Since these situations are seemingly complex, ill try to refrain from addressing this question as if i know the answer, however this seems to be also the foundation of the issue, and the arbitration should be whether or not this was clearly laid out. It may not at all though be the deciding factor, since as I would like to go into, we cannot analyze the situation in a vaccum.

Originally Posted by Poster F
Your contract laid this out very clearly. He owes you 50%. Otherwise he should have not accepted the transfer to your stable. GL.

Very clearly one sided, does not agree with A’s seemingly initial stance.

Originally Posted by Poster G
In general, I think that every staking contract should have the exit clause so that the player can always quit poker without owing anything (but he would obviously have to entirely quit it and if he ever he resumed, he’d have to continue clearing that mu if asked).

However I think your contract states pretty clearly that he owes you 50%. It’s so black and white that I don’t think he can really argue.

If I were either of you, I’d probably try to settle at 33% or something. The player has some of my sympathy as well since I don’t think it’s unreasonable for him to think that he would have the option to quit without paying anything since that’s usually standard.

The bolded agrees with A, another well known and reputable contributor (this may mean something or may not). So we point out again the clause in the contract is there, yet morally we should have a ‘clause’ that supports the bolded. We want to way the two in our arbitration.

Originally Posted by Poster H
sounds like he agreed to the 300 game sets

once BOTH parties agree to that, what else can be done?

Its an interesting question because seemingly there is much that can be done reaching as far as every end of the spectrum.

Originally Posted by Poster I
Joe…he only owes you out of his poker money. That’s my opinion. When/if he plays again he has to contact you and work it out. He’s gonna be a terrible horse right now anyway. Wish the kid luck and move on.


This seemingly disagrees with A, yet doesn’t fully arbitrate the details of repayment, I should suspect the community views it as not a contribution.

Originally Posted by Poster J
If a horse just quits there’s not a whole lot you can do but I think you’re entitled to share your experience with the community. In this instance (assuming it was mentioned anywhere in the agreement that he couldn’t quit without buying out or whatever) the horse is taking the attitude that he’s done because he’s busy right now and he can just walk away. That seems pretty one-sided and doesn’t show any regard for the backer’s position as the risk taker. He should be offering a target time when his schedule will slow down, offer to play whenever he’s free, suggest a payment plan or just offer to listen to what the backer is thinking about the situation. I feel bad for backers in this kind of situation because if you harass him into playing he’s probably going to punt a bunch and it just makes your odds of recovering the makeup that much worse.

3 bolded statements to be addressed in order. The first seems quite reasonable and inline with A. We might ask then who we want to assume the risk (or to which weight) when it comes to new contract agreements, so we have pointed something out, but assume that it is somehow less fair for the backer, which may or may not prove to be true. Feeling bad for the backer might be something that we can fix in contracts, yet might not be in the form of equity the horse gives up, but everyone seems to agree the horse loses incentive and ability to play will in this forced environment (and so its -ev for the backer and the horse in some certain way).

Originally Posted by Poster K
Agree a lot with this post.

I don’t think the make-up just disappears when he leaves, he should realize that as well, it seems clear. Right now I would focus on coming to an agreement or acknowledgment that the makeup will apply when he can finish the contract, deciding from there if he will continue playing again.

Not playing or paying anything at all doesn’t seem right.

It might not seem right at all, but we should be able to define this further. We might focus on reevaluting/forming the contract yet we don’t want to arbitrate based on ‘feel’ if their is a more tangible solution at hand.

Originally Posted by PL

This is a good reason why I don’t think makeup should be bought and sold.

I’m torn on the possible resolution. On the one hand, it seems he does owe you .33 of the remaining makeup, but it also seems like he should be able to quit poker and not be indentured to the contract. It would be a different story if he was taking a different stake or playing poker on his own money.

The guy made a good faith effort to work through your stake under sub-optimal conditions (having his makeup sold and then signing a contract probably without understanding the full implications).

If he had quit poker a month earlier (before his makeup was sold), I don’t think anyone would argue he owes the old backer makeup, and, again, this is a prime example of why I think selling makeup is bound to create a mess for everyone.

This may be the key as well, which would be interesting as the fault in this specific case wouldn’t fall on the horse, regardless of which backer it falls on (or to which weight).

Originally Posted by PL
Jon made mistakes here, but I don’t think he did it out of malice.

Shane also made a mistake when he bought the makeup and failed to realize the horse didn’t understand the contract.

So I think a compromise would be reasonable.

I understand how the letter of the law favors Shane, I just don’t think it’s going to be a practical resolution to try and enforce the letter of the law here.

Disclaimer: I’m friendly with Shane, I like him a lot and respect him. No clue who jonrubs is.

This poster as I understand is well respected for their strategy considerations. And being a friend of the backer, we might not be able to assume they are bias if they arbitrate towards the horses favour. I think often the solution to a problem might be a misplaced fundamental axiom that neither party is considering, and that this poster may have pointed it out.

Originally Posted by PM
what is shane (and other backers with contracts) supposed to do to make sure the horse understands the contract? shane sent the contract, the horse signed it. what else is there to do? you surely cant go over every bullet point and say ‘any questions on this, any questions on this, are you drunk or high atm?”

signing something, and then later say “brahhhhh, i didnt know it said that, but i was soooooo baked”. just seems like a huge angle tbh.

fwiw, shaniac helped me with a horse at one point and semi arbitrated something for me (thanks again) and it involved my contract and how a horse was basically saying he didnt have to follow the contract. i was willing to compromise even though the contract laid everything out clearly. the horse obv just didnt agree and has yet to send me anything i am owed (slavouchka on stars).
gl with this shane

Clearly they need to pick knowledgeable, credible, and morally good horses. And that what we want to ask, is what is it you are expecting to use to ‘force’ players to not do this?

Originally Posted by PL
Well, maybe just having a quick discussion along the lines of “you realize this contract is much different than your last one, is nontraditional, carries with it certain obligations,” etc. would avoid some problems. When you get hired for a job, sure there’s a contract, but there’s also an interviewing and vetting process.

I just don’t see how anyone in this agreement (besides the old staker who is clearly a genius) thought this was going to be a feasible arrangement.

Here’s a new idea: Why not take the makeup and return it to the original backer and say, “This makeup you sold me is no good, refund please.”

The bolded may be the solution, although it to may need arbitration. If it were true, then the worries is that the horse and the backer were unknowledgable to this and therefore by default under the guidelines in the wealth of staking, the contract defaults to N/A and the horse walks away to whatever his own morals justify.

Originally Posted by OP
What do people think about my offer of $1,500 with $125/month starting October 15th? I felt like that was an extremely fair offer. We got the transfers back from Jon and it’s closer to around $800 that would make us even on this stake. Jon’s offer was to pay the $800 + 10% but only after he gets a job after college, which as mentioned previously he doesn’t graduate from college until May 2013.

For the people saying Jon should just try to play tournaments on his own time when he can. I don’t want to speak for Jon, but I’ve gathered that Jon is very “over” poker and wants to have nothing to do with it regardless of how much or little free time he has.

Originally Posted by Horse
Ya it makes 0 sense to play poker financially for me and is only deterring me from bettering my double major studies so that is out of the option playing poker.
Originally Posted by PN
I’m going to try not to post in this thread anymore, mostly because the makeup model is stupid and will be antiquated soon…IMO it is just an excuse to collude…A lot of these “staking” operations are really ghosting operations. I got really really tired of playing a different player at the final table than the one I’d come to know leading up.

You can easily just sign a guy to a 300 game contract and pay him a cut of the profits. You can start noobs at 15% + stakeback and do all kinds of different incentives. Makeup is retarded.

Either way this is a good excuse for 2p2 to elect an ethics board imo. No reason to have opinions from people who don’t know what they’re talking about, and an ethics board can conduct their biz in private

This might be interesting as well in the context of the future of staking given todays new technology (public ledger decentralized). the antiquated staking model, ghosting, and an ethics boards, all seem to be relevant topics that we should want to address in a separate context.

Originally Posted by PN
Interesting how you just argued in another thread that a horse could quit and not owe any makeup. You were very clear about it too. Not at all on the fence. I can throw at least 10 quotes up where your argument is very clear.

I think most would agree the horse doesn’t owe anything, but they aren’t willing to say that because it might ruin their chances of getting backed in the future. That’s why you are getting answers like, I think a horse can quit in makeup but this horse can’t.

It’s pretty disgusting IYAM…people want everyone else to act ethically, quick to call them cheats, but when the shoe is on the other foot they take all they can and justify it with BS.

The bottom line is that this can happen to any backer and it’s part of the risk of staking and why you are getting half of the profits in the first place. Otherwise it’s a predatory loan.

This also COULD be a valid concern, in today’s forum.

Originally Posted by PO
Over the top fair offer for Jon. Jon’s mistake was allowing his makeup to be sold when there was a chance he’d quit poker before he could reasonably clear his makeup (in fact given the structure of Shane’s deals it was impossible for him to clear makeup), signing a contract he didn’t agree to, and then bailing on the contract 1/9th of the way through. Jon needs to pay for his mistake and the bottom line figure would be to make the backing group whole again. Because of the need for a long payment plan the 10% interest figure was added. I can’t imagine a better deal for Jon and think it would be completely ridiculous to not find a way to make this work.

I’m not sure what your minimum monthly payment would be under this plan (appears to be “very small”) so presumably under $100 a month. I understand you don’t currently have a bunch of disposable income, but I think you can find a way to make $100 extra a month without cutting into your school time very much.

Some ideas (in order of what I think could be most feasible given your situation):

1) Coach 180 man grinders/low stakes MTT players for ~8 hrs a month at $12/hr: Your rate would be incredible value given your experience and ability and within reach for a wide range of students. Set up a good method for coaching (maybe ask current coaches, could even PM me and I could help set up some good coaching methods) and try to find some students. You could EASILY make $100 a month doing this and wouldn’t have to commit to more than 2 hrs a weekend (sleep an hour less each night).

2) Wash cars/mow grass/shovel snow/etc: I assume you live in a college town, which might not be the best market for these type of things, but I imagine you could pick up 2-3 hrs a weekend of this type of labor and easily make the $100 a month. Use your personal network and try to find opportunities to do this sort of stuff. Lots of people even have lawnmowers but don’t want to do the work so you wouldn’t even need one to get some work.

3) Tutor underclassmen: Look around, but most colleges either have in-house programs or 3rd party companies that offer tutoring. See if you can pick up a 2-3 hr a week gig.

4) Babysit/nanny: Would need to really ask/look around but you could find something that was one night a weekend and paid $10/hr for just sitting and doing basically nothing for 3-4 hrs a night.

5) Get a job at a bar: Doesn’t have to be full time gig or anything, but just talk some of the college bar owners (assuming you are in a college town) and see if you can pick up work cleaning the bar 1-2x a week. Would suck, but it’d get $100 more a month in without having to commit too much time.

6) Buy low/sell high hustles: Buy a bunch of chicken biscuits/doughnuts and sell them outside your college apt complex/dorm for 2x the price. Do it every Friday morning or something. Decent chance of getting shutdown at some point, but worth the try if you can’t find anything else.

7) Borrow from parents/family members. Explain the situation. Make sure they understand you are contractually obligated to make this right, but you don’t want to interfere with your school work. Set up a payment plan with one of them, and actually make all payments back once you get a job. Definitely make sure they get it’s not a “gambling debt”, but instead a resolution to a business deal that requires you to get that extra $100 a month that you are borrowing from them.

8) Sell stuff. Sell your XBox, TVs, jewelry, etc. It sucks, but you can buy all that stuff back once you get a real job. It might even help you do better in school without all the distractions.

It seems to me that this would be a very bad thing if poker created these situations, and held people to this standard irl, they may just have been unknowledgable in their poker endeavors or how may have fallen under misfortune or unforeseen circumstances. It seems clear this would be bad for the game, and therefore would be a bad contract that should self nullify under the guidelines laid in TWOS.

And then finally there is a seemingly self resolution:

Originally Posted by Horse
Again I just graduated May 10th to be exact and do not have a job yet. If Shane wants he can stake me in a few live tournies to accrue makeup but again I do not have time to play poker full time or even any sort of online grinding. Ive played ~ 9 hours of live cash since this thread and 2 live MTTs with total buyins of 910$ and both were after graduation. Shane hasnt txted me or tried to contact me since I believe sometime this winter and I told him the same thing once I graduate and get a job I will pay him back. And how dont you see that me selling a package actually helps his cause?
Originally Posted by Horse
and just checked skype, no messages in the past 6 months, and the status quo hasnt changed. I have ~1.2K to my name(all grad $) 450$ rent each month,+ cable,internet,utilties,food and no job to speak of. Nothing has changed once I get a job that is full time, some payments will be made. Until then theres no way I can afford to make any payments and the best way short term for him to get paid back quickly and in the short term is either have me pledge 5% of my winnings or hope I get a job(which I have 3 interviews this week).
Originally Posted by OP
Just wanted to post an update to this situation. Jon approached us recently and said he’s looking to get back into poker and in doing so wants to make the situation right with us before anything else. He’s resumed his stake with us and is going to grind out the makeup he left in.



So we have a seemingly complex situation, even in light of seemingly well laid out contracts by knowledgeable parties. Both parties seemed somewhat reasonable and somewhat moral by most peoples understanding of them. We have peoples with clearly contrasting views, and so seemingly groups of peoples that are inherently right, and groups that are inherently seemingly wrong. We also have a few suggestions that seem ‘above’ the scope of the arbitration, yet also have the possibility of great truth and relevance.

We also have an seemingly inherent lack of foundation when it comes to whom the responsibility of ‘risk’ should fall on in terms of these deals. Should it be the backers fault when the deal goes bad, or should the horse share their own risk?

We ask this of course as a representation of the paradox of poker contracts that may or may not be upheld in what we can call irl law. Since most legal foundations do not arbitrate poker (or were constructed to not) deals, there seems to be in some ‘players’ minds a gap between ethics and law.

I cannot find a quote atm but we are taught in concise tutorials by “Nick Szabo” that if one wishes to learn and understand law, in a context of significant effectiveness that becoming a lawyer is not simply enough. We must understand the history and foundations of it in the context with which it was laid. Much of this context also implies future considerations. Because of this we should not jump to arbitrary conclusions, based on ‘feel’ or certain ‘moral bias’s’, and yet we should also caution about upholding the same for traditional purposes that are just really misapplied legal principles.

Poker staking contracts are perfectly fine to have the risk to be weighted 100% towards the backer. And there are many posters in the thread that agree with me and Poster A in this regard. this is the being of the hermeneutic roots of this gresham knot.

This essentially infuriates certain players and backers who then admittedly do not have amydalic control.

They do not follow the truth to its roots and spend time untangling all of their religious beliefs on such matters, and since it is so easy for the masses to be fools, and for fools to convince the masses, the true of this has taken quite some time to come to light.

Players simply do not want bad stakers make bad deals with bad horses that don’t know better. And since a good backer will always find good horses and make good deals, the entire risk can perfectly fall onto the backer.

In relation to this deal then, it was seemingly a bad deal, since it went to arbitration, and so we might assume it was a bad deal with a bad player and a bad backer and so bad for the game. But we also pointed out it might be a bad deal between two bad backers (and so a bad horse because good horses don’t enter bad deals), but again we have the same conclusive result…

however interestingly enough the play and back stayed in touch enough and there was enough time and change that went by and the deal was again able to resume. There were admittedly posters on both sides of the argument that suggested some sort of resolution in this form.

In light of this I think I must admit this was a good deal with a good backer and a good horse that was good for the game. It seems very well true that the EV of irl far out weighed the deal for the horse and that the invisible economic hand pulled them from it. (A side note it might be shown that the deal didn’t offer enough ‘ev’ for the horse to continue with it and this was the true cause of the cessation of it).

It might then be a lesson that seemingly bad deals are not so easily identified, but also with the proper legal/moral foundation being laid with the principles pointed out by szabo, may help to minimize any type of dispute in the future (probably mostly based on Locke’s principle of least authority).

It seems this dispute could be promoted as being good for the game which is quite a contrast to this one:…takee-1449067/

Which is quite bad for the game yet fortunately had quite a favorable outcome for the community, as irl law backs the foundation laid by TWOS, and arbitrates to the horses favor while agreeing the horse broke multiple clauses in the contract. If players don’t understand all this, then the community might not want to consider their voice in the arbitration.

Another backing dispute that might be an educational read:…story-1451552/


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