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Scott Jagow: Most people aren’t gambling with their money right now — in the stock market or in Las Vegas. Today, two of the big casinos, Harrah’s Entertainment and Trump Resorts, both turned in quarterly losses of more than a $100 million. But this weekend, nine poker players will be betting big in Vegas. They’re sitting at the final table of the World Series of Poker.
The tournament started back in July, and it’ll end Monday, when one player has all the chips. The top prize is more than $9 million. But the winner might have to share some of the money with investors. Amanda Becker reports from Vegas.
Amanda Becker: On the first day of the World Series of Poker in July, the Rio casino was packed. More than 6,000 people huddled around green felt-covered tables. They’d each chipped in $10,000 to play in the Texas Hold ’em poker tournament. And even though the air conditioning was on full blast, the players were feeling the heat.
Only 10 percent of the players will get what they call “into the money” — the rest will go home with nothing to show.
Those odds weren’t good enough for Christopher Gamble, a 23-year-old Las Vegas resident who couldn’t afford to lose $10,000 out of his own pocket. So he approached an investor to fund his entry fee.
Christopher Gamble: I know he’d staked a few people in tournaments so I came to him and another group and basically just between the two groups, whoever gave me the best offer, I took for the $10,000 stake.
Gamble sold a percentage of the money he might win in the tournament to an investor who was willing to pay the entry fee. Yet there was no paperwork, no signatures and no contract. The deal was based only on Gamble’s word.
It might seem like someone who makes a million-dollar deal without a contract isn’t playing with a full deck of cards. But investors like Shaun Deeb say they aren’t worried. He staked a dozen players in the World Series of Poker this year.
Shaun Deeb: If they want a stake in the poker game, they can’t just stiff a backer. Word will spread pretty quickly that they weren’t keeping up with their deal, they’re unethical, they cheat, steal. And in general, in the poker community you definitely need to have a good reputation.
And reputation is exactly how backers like Kyle Wilson find good investments.
Kyle Wilson: We staked about 50 guys this year, and we got about between 5 and 25 percent of 50 players. We know who can play and we take a piece of them and we recruit them and they come to us sometimes too. But mostly we recruit them.
Thirteen of Wilson’s players won money this year, and as more players become interested in poker through popular Internet gaming sites, there are more opportunities for investors to recruit promising players.
Jonathan Grotenstein is the author of “All In: The Almost Entirely True Story of the World Series of Poker.” He thinks that as the ranks of players swell, the agreements between investors and players might not be so casual.
Grotenstein: I’m sure it’s only a matter of time before shrewd poker players figure out how anybody with just a few clicks here and there can invest into something much larger and have people trading the futures market of poker players.
And as documents and contracts establish poker as a legitimate business venture, it could pave the way for even more kinds of investing.
Jonathan Grotenstein: Now, as poker players have realized that they’re going to be taxed on these winnings, and at a high rate, they are of course going to make their backers step forward, and that probably more than anything will help to create a lot of these legally binding documents.
To skittish investors hit by Wall Street’s recent woes, trading poker futures might start to seem like less of a gamble.
In Las Vegas, I’m Amanda Becker for Marketplace.
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