well the player sold out within a few hours so the price was obviously deemed correct by the buyers anything from 1.2 to 1.6/1.7 depending on player and perceived field strength is completley standard Posted by u_sud_fold
Sorry but 1.6/1.7 is not completely standard at all. It may be 'standard' for the absolute best players, but you take your average player who chooses to sell some action and he will not get that kinda price.
The CGT question. The reply by Gooner summed it up perfectly. Don't worry abiout CGT, it will NOT apply.
'GOONER said....
"....Capital gains tax arises from the disposal of an asset eg shares not within a tax wrapper or 2nd property. Your mate staking you would not be classed as an investment but a gamble on you making the money. Capital Gains Tax allows you to factor in losses as well as gains and therefore is unworkable in the gambling world....."
In Response to Re: TAX RULES WHEN YOU'VE BEEN STAKED : 1.6 thats some mark up. Was it Phil Ivey? Posted by BrownnDog
Lewis (& others).
Quite complex that.
First up, I'll explain it, but please remember that Staking is not something that Sky Poker would ever permit to be done via the Community, there are too many risks associated, & it it is not really on message for this particular business, or appropriate to this Forum. The subject is fascinating though, so I'll work through it.
I think I said he sold at 1.6, in fact it was 1.55, my apologies.
1.6, these days, is not unheard of, not at all - I know several who charge 1.8 or even 2. But it is pretty rare, & rightly so. Most staking is done at somewhere between "spot" (NO mark up) & 1.2.
It's a free market thing - peeps can sell at whatever the market will stand, & if stakers want to bid 1.6 & above, they can & will. It does happen. The market is not exactly sophisticated, or always understanding of what represents "value", so some eye-watering mark ups do get through.
"Mark-Up" is supposed to represent the players value. If the guy thinks he has a 20% edge on the field, he might seek 1.2 for "parity". But.....
The staker (the guy who buys his action) would not have value if he was paying 1.2 for someone who had a 20% edge, & that makes no sense. When we buy apples for two bob a pound, we need to sell them for half a crown to turn a profit.
So if the guy has a 20% edge, he needs, really, to sell at LESS than 20% mark-up.
Turn that upside down, & now it tells us that if a chap sells at 1.6, he needs an 80% or so edge to give the staker a decent profit margin, over time, & all things being equal.
How did he come to sell at 1.55 then?
For one, he IS a very good player.
He is a full-time pro, & has turned a profit of around £100,000 in each of the last 2 years. He plays cash and Tourneys. Oddly (to me, anyway) for most of that, he was staked, which makes no sense to me, but thats how things work these days. He deffo has an edge over most fields - over time - but whether he has a 1.6 edge is another matter altogether, upon which the jury remains very much out.
Usually, when a player sells action, he offers it at a mark-up, & buyers have the right to buy, or not, depending whether they think it reps value.
However, on this occasion, he used a different method to sell - an Online Auction.
He offered 20% for sale to the highest bidders. Auctions change the dynamics completely, & because of the psychology of poker players, means a much greater selling price can be achieved.
One guy bids for, say, 5% @ 1.2, then the next guy says "ooh, I had better bid 1.3 to ensure I get a bit", & so it goes on. As you can imagine, some appendage waving is present in all this.
Bids started at 1.1, 1.11, 1.22, 1.23, 1.28 & 1.39.
Anyway, the price rose & rose as players tried to get a slice of his action, & eventually the auction closed with a price of 1.55.
The top 5 bids were 1.66, 1.61, 1.6, 1.59, & 1.55, & so by the Auction Rules, the price was set at 1.55.
As it happens, I generally try to buy a bit of action in this lad, he is a grand sort, honest, a great player, a good friend, & respectful to others, & when he was selling "traditionally" at 1.2 or whatever, I usually took a bit.
However, on this occasion, I sat out, because after dipping my tie in "Auction Staking" on one or two occasions, I formed the view that they do not suit me, I decided a while ago never to buy via that method again, as it just forces the price up. Good for the seller, bad for the buyer, & I'm a buyer not a seller!
I have been quite a big buyer of action for a while now, but in the process I have learned - with the help of those who understand these things better -that I need to be careful what I pay, as prices have been rising unrealistically for a while now. The truth is, MOST players over-rate their own ability versus a random field. They also give it the "it is a soft-field" stuff, which I just ignore, because it does not work like that in real life.
I still buy action in good friends in regular tourneys at bad prices, simply because it's fun to support your mates, & as I don't have ther time (or, some may say, ability these days) to play much Live Poker, so I get a bit of poker fun vicariously, & a good "sweat".
But I also buy "serious" action, & in those cases, I am now quite selective as to the price I am prepared to pay.
Where possible, I prefer to buy where the package is a series of Tourneys, rather than just one - that helps with the variance. I had a piece of a lad in Vegas this year which was for no less than 22 Tourneys, which looked perfect for me.
He failed to cash in the first 21, & binked a quarter of a million in the 22nd & final one!
PS - I do not sell my action, & never will, (I don't agree with the logic for the most part), but by tradition, friends usually ask me for a bit when I go to Vegas each year, & I sell at spot, no mark up.
However, Neil Channing approached me recently & offered to buy some action in me. "What price?" I hopefully asked. "0.7" he replied.
Prior to him joining Sky Poker, I have been buying action in Julian Thew for around 10 years, & have done very well so far. But I have never paid a penny more than "spot", & we have never even discussed "Mark-Up".
Times are changing, there you have Old Skool v NKOTB.
Old Skool never charged Make Up, or not that I recall.
The Poker World changed when they invented the interwebz.
My comment was just a lighthearted remark. Your second paragraph pretty much sums up what I thought anyway. I know people do sell at 1.6 and above but I just didn't believe it was the average or 'norm'.
There aren't many people I'd be comfortable at buying 1.6 or above and those I would probably wouldn't be selling anyway!
P.S 0.7? That's disgraceful! Way too generous. 0.5 max IMO
Thanks for the indepth reply Tikay. My comment was just a lighthearted remark. Your second paragraph pretty much sums up what I thought anyway. I know people do sell at 1.6 and above but I just didn't believe it was the average or 'norm'. There aren't many people I'd be comfortable at buying 1.6 or above and those I would probably wouldn't be selling anyway! P.S 0.7? That's disgraceful! Way too generous. 0.5 max IMO Posted by BrownnDog
Sigh. Bet you wish you had some of my action in Vegas this year though.
Make sure you are at the SPT Grand Final, I'm SO gonna raise you all-in if we share Tables. Any two will do.
You are right in surmising that very few are worth 1.6 or more. That is not to say that a lot THINK they are worth that though. Big difference.
Cheers Tikay, I'm selling at what you called 'at spot' for this tournament, so no mark up and just to friends who are willing to buy a piece. Not great business but I'm really just doing it because the £560 is a bit more than I'm comfortable with given how much luck is involved in the outcome of any single tournament - so selling some keeps the buy in down to a price that means I can go enjoy playing in such a big tourney without the anxiety that comes with knowing you're playing too high for your bankroll. Plus its quite gratifying that friends have enough confidence in my abilities to invest their hard earned money so I'm happy to take it without trying to then put a mark up on them aswell. Guess that makes me old school aswell then?!!
With regards to staking at 1:1, this is basically turning say a £1000 buy in into a £200buy in (obviously not many people sell 80%, but this is an example), as the player only pays 20% entry fee to win 20% of any cash. Would it not be better for the player to simply play a £200 tourney, where the field may be "softer" due to the lower buy in? Probably more likely for people asking for staking to £100/200 tourneys... the field would surely be softer if they played a £50 buy in, rather than playing a £200buy in, but with the same prize structre as a £50 buy in for the player.
WWFCBlue...I understand where you are coming from, what you need to factor in is a couple of things....
1. Players egos - A lot of players want to play the highest games possible 2. The £1k buy in may have a higher effective top prize. I say effective as it will nearly always have a higher prize pool but the key is effective prizepool, eg how much the 20% could win you vs the 100% of the lower buy in tournament
WWFCBlue...I understand where you are coming from, what you need to factor in is a couple of things.... 1. Players egos - A lot of players want to play the highest games possible 2. The £1k buy in may have a higher effective top prize. I say effective as it will nearly always have a higher prize pool but the key is effective prizepool, eg how much the 20% could win you vs the 100% of the lower buy in tournament Hope that makes sense Posted by MattBates
It also comes under BRM as you can be rolled for higher buy-ins than you would be normally. Even if you are rolled, as tourney play has high variance, it can help flatten out the troughs when you don't cash.
Comments
Matt,
The CGT question. The reply by Gooner summed it up perfectly. Don't worry abiout CGT, it will NOT apply.
'GOONER said....
"....Capital gains tax arises from the disposal of an asset eg shares not within a tax wrapper or 2nd property. Your mate staking you would not be classed as an investment but a gamble on you making the money. Capital Gains Tax allows you to factor in losses as well as gains and therefore is unworkable in the gambling world....."
Sums it up perfectly.
Quite complex that.
First up, I'll explain it, but please remember that Staking is not something that Sky Poker would ever permit to be done via the Community, there are too many risks associated, & it it is not really on message for this particular business, or appropriate to this Forum. The subject is fascinating though, so I'll work through it.
I think I said he sold at 1.6, in fact it was 1.55, my apologies.
1.6, these days, is not unheard of, not at all - I know several who charge 1.8 or even 2. But it is pretty rare, & rightly so. Most staking is done at somewhere between "spot" (NO mark up) & 1.2.
It's a free market thing - peeps can sell at whatever the market will stand, & if stakers want to bid 1.6 & above, they can & will. It does happen. The market is not exactly sophisticated, or always understanding of what represents "value", so some eye-watering mark ups do get through.
"Mark-Up" is supposed to represent the players value. If the guy thinks he has a 20% edge on the field, he might seek 1.2 for "parity". But.....
The staker (the guy who buys his action) would not have value if he was paying 1.2 for someone who had a 20% edge, & that makes no sense. When we buy apples for two bob a pound, we need to sell them for half a crown to turn a profit.
So if the guy has a 20% edge, he needs, really, to sell at LESS than 20% mark-up.
Turn that upside down, & now it tells us that if a chap sells at 1.6, he needs an 80% or so edge to give the staker a decent profit margin, over time, & all things being equal.
How did he come to sell at 1.55 then?
For one, he IS a very good player.
He is a full-time pro, & has turned a profit of around £100,000 in each of the last 2 years. He plays cash and Tourneys. Oddly (to me, anyway) for most of that, he was staked, which makes no sense to me, but thats how things work these days. He deffo has an edge over most fields - over time - but whether he has a 1.6 edge is another matter altogether, upon which the jury remains very much out.
Usually, when a player sells action, he offers it at a mark-up, & buyers have the right to buy, or not, depending whether they think it reps value.
However, on this occasion, he used a different method to sell - an Online Auction.
He offered 20% for sale to the highest bidders. Auctions change the dynamics completely, & because of the psychology of poker players, means a much greater selling price can be achieved.
One guy bids for, say, 5% @ 1.2, then the next guy says "ooh, I had better bid 1.3 to ensure I get a bit", & so it goes on. As you can imagine, some appendage waving is present in all this.
Bids started at 1.1, 1.11, 1.22, 1.23, 1.28 & 1.39.
Anyway, the price rose & rose as players tried to get a slice of his action, & eventually the auction closed with a price of 1.55.
The top 5 bids were 1.66, 1.61, 1.6, 1.59, & 1.55, & so by the Auction Rules, the price was set at 1.55.
As it happens, I generally try to buy a bit of action in this lad, he is a grand sort, honest, a great player, a good friend, & respectful to others, & when he was selling "traditionally" at 1.2 or whatever, I usually took a bit.
However, on this occasion, I sat out, because after dipping my tie in "Auction Staking" on one or two occasions, I formed the view that they do not suit me, I decided a while ago never to buy via that method again, as it just forces the price up. Good for the seller, bad for the buyer, & I'm a buyer not a seller!
I have been quite a big buyer of action for a while now, but in the process I have learned - with the help of those who understand these things better -that I need to be careful what I pay, as prices have been rising unrealistically for a while now. The truth is, MOST players over-rate their own ability versus a random field. They also give it the "it is a soft-field" stuff, which I just ignore, because it does not work like that in real life.
I still buy action in good friends in regular tourneys at bad prices, simply because it's fun to support your mates, & as I don't have ther time (or, some may say, ability these days) to play much Live Poker, so I get a bit of poker fun vicariously, & a good "sweat".
But I also buy "serious" action, & in those cases, I am now quite selective as to the price I am prepared to pay.
Where possible, I prefer to buy where the package is a series of Tourneys, rather than just one - that helps with the variance. I had a piece of a lad in Vegas this year which was for no less than 22 Tourneys, which looked perfect for me.
He failed to cash in the first 21, & binked a quarter of a million in the 22nd & final one!
PS - I do not sell my action, & never will, (I don't agree with the logic for the most part), but by tradition, friends usually ask me for a bit when I go to Vegas each year, & I sell at spot, no mark up.
However, Neil Channing approached me recently & offered to buy some action in me. "What price?" I hopefully asked. "0.7" he replied.
Marvellous. No wonder he is laughing.....
Just a quick PS to that.
Prior to him joining Sky Poker, I have been buying action in Julian Thew for around 10 years, & have done very well so far. But I have never paid a penny more than "spot", & we have never even discussed "Mark-Up".
Times are changing, there you have Old Skool v NKOTB.
Old Skool never charged Make Up, or not that I recall.
The Poker World changed when they invented the interwebz.
Make sure you are at the SPT Grand Final, I'm SO gonna raise you all-in if we share Tables. Any two will do.
You are right in surmising that very few are worth 1.6 or more. That is not to say that a lot THINK they are worth that though. Big difference.
PS - Sent you a PM.
Hi Matt, I've sent u PM.
1. Players egos - A lot of players want to play the highest games possible
2. The £1k buy in may have a higher effective top prize. I say effective as it will nearly always have a higher prize pool but the key is effective prizepool, eg how much the 20% could win you vs the 100% of the lower buy in tournament
Hope that makes sense