Quick facts by PokerStrategy

  • A markup in poker is an additional amount that players may charge to backers when they sell action.
  • Poker markups should only be charged by players who have provable long term results.
  • Poker markups should be a direct reflection of a player’s ROI.
  • It is up to the backer to understand the markup poker terms and only invest when the deal is fair.

What Is Markup in Poker?

Markup in poker is an additional cost that players may charge when they sell action, particularly when it comes to tournament staking. It’s the percentage above the face value amount that the backer pays when they invest in a poker player.

Not everyone charges markup in poker. Instead, it is a way that experienced, winning players can factor skill, time, and return on investment (ROI) into their staking deals.

The Origins of Markup in Poker Staking

Poker staking has always been a part of the game. Initially, staking was an informal arrangement between players and friends. Any terms and markups were usually spoken agreements sealed on a handshake.

By the mid-to-late 2000s, sites like PocketFives and 2+2 had created a public marketplace for online poker staking. Using tracking sites like Sharkscope and HendonMob, players could easily demonstrate their results, which could then be used to set and justify markup rates.

Now, sites like PokerStake and Standard Backing have transformed staking into a comprehensive online marketplace, allowing players to set poker markups when selling action.

How Markup Works in Practice

In theory, poker markup should reflect a player’s edge over the field, which they should be able to prove.

In practice, there are no set poker markup rules, so it is up to you to evaluate each deal or to set your own markup to be fair and reflective of your ROI. However, you could use a poker markup calculator.

The basic formula is straightforward:

Buy-in x Percentage Bought x Markup = Total Paid

Examples of Markup in Tournament Staking

Markup directly affects how much a backer pays compared to the actual buy-in. Here are a few examples to illustrate:

Buy-in is $100 with a markup of 1.1, and you are staking for 50 percent.

$100 x 0.5 = $50 x 1.1 = $55.

Here’s another example of how poker markup impacts tournament staking.

In this case, Player A wants to sell 50 percent of their action to a $500 tournament:

  • At no markup (1.0), you would pay $250 for 50% of the buy-in.
  • At a 1.1 markup, you would pay $275 for 50% of the buy-in.
  • At a 1.2 markup, you would pay $300 for 50% of the buy-in.
  • At a 1.3 markup, you would pay $325 for 50% of the buy-in, and so on.

Why Players Charge Markup

The primary reason players charge markup in poker is to reflect the skill edge that they have. If the player selling the action has a provable ROI, they are likely to make more money in the long run than others in the field.

If winning players didn’t charge a markup, they would effectively be giving up their edge to the backer.

Charging a markup in poker staking deals has several advantages for players: it reduces variance and allows them to play more sustainably, even during a downswing. Most of all, though, poker markup makes the staking deal worthwhile financially for all parties. Or at least it should do.

How Backers Evaluate Markup

It’s the player’s role to determine their ROI and set a poker markup on staking deals based on their win rate. It’s up to the backer to figure out whether a player is worth investing in and if their markup is justified.

If you’re thinking of backing a player, always do your research and don’t be afraid to ask for data that can verify their results, especially if the markup amount seems steep.

The Role of ROI in Determining Markup

A player’s markup should directly reflect their ROI. The role of ROI in determining markup is to show how profitable a player is.

Example:

  • If they have a long-term ROI of 10%, a player can justify asking for a 10 percent markup (1.1).
  • If they have an ROI of 30%, they can charge a markup of 1.3.

Fair vs Unfair Markup

A staking deal with markup in poker is only fair if the markup amount is equal to or less than the ROI. If a player is asking for a greater markup than their ROI, the deal is likely unfair and should be avoided.

Here are some signs of an unfair deal:

  • The player is charging a markup with no proven edge.
  • They are charging a high markup well above their ROI.
  • They can’t provide evidence of win rates or past results.
  • They are asking to be staked well above their usual level with a markup.

Negotiating Markup Between Player and Backer

It’s up to the player and backer to negotiate a deal and discuss markups. If it’s a face-to-face deal, a little back-and-forth is expected. When using an online staking platform, the markup will usually be clearly outlined, and it may not be possible to negotiate. If you are not happy, simply choose a different player who has more favourable markup poker terms.

Markup in Online Poker vs Live Poker

Markup applies to both live and online poker, with key differences.

Transparency

  • Online poker: staking deals are more transparent as the backer can easily use tracking sites to see the player’s long-term ROI, volume, and stakes.
  • Live poker: Results are harder to verify, and it’s especially difficult to measure the true volume over time.

Typical Markup Rates

  • Online staking: Markups are often lower because edges are smaller. On poker apps and online poker sites, backers can quickly compare ROIs across different players, making overpriced deals easier to spot.
  • Live staking: Markups tend to be higher – often around 1.3 or 1.4 – particularly when a player has a proven track record. Added costs like travel and accommodation are also factored in. Where long-term ROI is provable, it’s not uncommon to see markups of 1.3 or 1.4 for live games.

Investment Structure

  • Online events: Deals are more likely to include volume, such as daily MTTs or staking throughout a series.
  • Live events: Staking usually covers a single, high-buy-in event, which makes them high-risk, high-reward for investors.

Community Debates Around Markup

Markup is a controversial topic within the poker community. On the one hand, most would agree that competent players with provable win rates should be able to charge a premium when they sell action, reflecting the time, energy, and edge over the field that they offer.

The main problem arises when players attempt to inflate their poker markup without being able to back it up with results. Recreational backers might fall for this, especially when backing someone with popularity or notoriety, such as a poker streamer or content creator.

With no enforceable markup poker rules or regulations, it’s up to backers to carefully select their deals and demand transparency when it comes to the results.

Tips for Understanding & Using Markup

Here are some tips for understanding and using markup in poker, both as a player who is selling action and as a backer:

As a Player

Clearly state all aspects of your staking deal, including any markup and fees. Set your poker markup based on your long-term ROI. Show graphs and results to prove your ROI and justify your markup to backers. Avoid overpricing your deals and consider offering packages with reduced markup for multiple events.

As a Backer

  • Check the markup of the staking deal you are considering.
  • Research the player’s long-term ROI and ensure it aligns with the markup: a fair poker markup deal should match the player’s provable ROI.
  • Look out for red flags such as high markup or lack of volume.
  • Don’t be afraid to ask questions if you need clarity on any aspect of the deal, including markup.

Frequently Asked Questions

Why do poker players charge markup when selling action?

Poker players charge markup when selling action if they have a provable win rate and skill edge over the field. The markup makes the backing worthwhile for a winning player, while still giving the backer a fair deal.

How do you calculate markup in poker?

A fair markup is calculated to directly reflect long-term ROI. For example, with an ROI of 10 percent, a player can charge a markup of 1.1.

What is fair markup in poker staking?

Markup in poker is only fair if it reflects the player’s true long-term ROI and edge over the field. Unfair markup deals should be avoided.

Is paying markup worth it?

It’s only worth paying markup if the player you are backing has a provable win rate and the markup deal matches their ROI.

Do professionals buy action with markup?

Professional backers are accustomed to staking deals that have markup in poker. This will only back players who have a proven win rate to justify the markup they charge.