Backing funds: what are they and how do they work?

Most members of the poker community have probably heard of the term ‘backing’. It essentially means that a poker player finds a financial investor for their game, who receives a certain percentage of the winnings. Backing has been around for a long time, but backing funds have only appeared in the last 20 years. So what are they, and why are they being discussed so actively now? Let’s start by looking at how it all began.

How did backing funds come about?

Poker backing funds emerged in the first half of the 2000s alongside the rise of online poker. They became popular among players who wanted to compete for high stakes but did not have sufficient funds to do so. These organisations allowed investors (backers) to finance players, receiving a share of their winnings in case of success.

The very first poker funds appeared in the United States and Western Europe, where the game had become particularly popular. The idea was to spread the risk between investors and poker players, allowing both parties to increase their earning potential.

The way funds operate can vary, but they usually involve an agreement between the player and the backer on the distribution of winnings and losses.

What formats do funds come in?

Poker backing funds emerged in the first half of the 2000s alongside the rise of online poker. They became popular among players who wanted to compete for high stakes but did not have sufficient funds to do so. These organisations allowed investors (backers) to finance players, receiving a share of their winnings in case of success.

The very first poker funds appeared in the United States and Western Europe, where the game had become particularly popular. The idea was to spread the risk between investors and poker players, allowing both parties to increase their earning potential.

The way funds operate can vary, but they usually involve an agreement between the player and the backer on the distribution of winnings and losses.

Partial backing funds

In this format, the organisation pays only a portion of the buy-ins, while the poker player contributes the rest independently. As a result, the player’s share of the winnings increases from a base of 30–50% to 70–80%, depending on the project’s terms. However, such funds are relatively rare. Most contracts are typically full backing agreements, often with the option for partial buy-ins or redemption.

Why do players need backer foundations?

For poker players, especially those who rely on poker as their main source of income, backer funds offer several advantages. For tournament players, the main benefit is access to larger and more expensive competitions. Many skilled players have the ability to compete at a high level but lack the funds to enter high buy-in events. Backing funds provide the necessary financing to participate in these tournaments.

Poker is inherently a game of risk, and even experienced professionals can experience losses. Backing funds allow this risk to be shared between investors and players, reducing financial pressure and providing a psychological advantage during sessions. For many players, managing a bankroll to avoid bankruptcy is crucial, and using investor money can help mitigate the risk of losing all their own capital. Platforms like Slotozen with their Slotozen no deposit bonus provide additional opportunities to practice and compete in a secure environment.

Additionally, many backer funds operate poker schools staffed with experienced and successful coaches. This offers players a chance to gain knowledge, improve their skills, and accelerate their development.

In summary, backer foundations are a valuable resource for players who aim to compete seriously but need financial support to reach their goals.

Why are more and more funds appearing?

Poker remains one of the most popular card games in the world. Television coverage of tournaments and the widespread availability of online poker have attracted many new players who want to participate in the game.

The internet and social media make it easier and more efficient to connect investors and players for backing funds. Players can attract investment and find sponsors through online platforms. But imagine you are the sole owner of such an organisation—why would you do this? What are the advantages?

• Potentially high returns: Backing fund owners can earn profits through commissions on the winnings of the players they finance. This can be a significant sum, especially if the players succeed in major tournaments. However, it also carries the risk of losing money if the players perform poorly.
• Expanding influence in the poker industry: Owning a backing fund can provide opportunities to become an influential figure in the world of poker. It opens the door to developing your own poker brands, sponsoring players, and collaborating with other organisations and professionals.
• Diversification of investment portfolio: Backing funds can be included in an investment portfolio, offering a potential source of income from various areas.
• Support for young talent: Owning such a foundation also allows you to identify and support promising young players, which can lead to both winnings and long-term growth.

However, it is important to remember that setting up and managing a backing fund is complex and requires significant effort, including financial, legal, and organisational work. There is also the risk of losing money if the players you finance do not succeed.

Why is it not profitable for online platforms to have such structures?

Poker rooms may not benefit from backing funds for a variety of reasons. One factor is that funds allow players to play at the expense of others, which can reduce the total amount of money moving through the poker room. This can reduce the platform's profits, especially if a large number of users take advantage of backing.

There are also unscrupulous funds that can open the door to fraud and deception, as players may try to use this system to gain an unfair advantage (timpay, ghosting, etc.). Perhaps the most important factor to consider is the change in the game ecosystem. A large number of players receiving backing may make playing on an online platform less attractive to other users who deposit their own funds.

There may also be political or legal reasons, as certain restrictions in some countries may prohibit or limit the use of backing in online poker. Last but not least, reputational risks are worth mentioning. If a poker player using a fund's money starts losing heavily, it can cause conflicts within the community.

Is it possible for poker rooms to cooperate with funds?

Spoiler alert: yes, definitely. Poker rooms can integrate a backing system, facilitating cooperation between players and potential investors. Here are some ways this can be done:

• Creating a marketplace for backing: poker rooms can develop a special platform or section on their website where players can search for investors and conclude backing agreements. They can create tools to manage backing deals, including tracking contributions and winnings, setting rules for profit sharing, and handling other aspects of the arrangement. This allows players to attract funding while giving investors the chance to sponsor promising players.
• Ensuring security and reliability: platforms must guarantee the security and reliability of backing agreements, including protection against fraud and enforcement of the terms of each deal.
• Customer support: online rooms can provide support and guidance for players and investors, helping with the execution of backing agreements, resolving disputes, and addressing other related issues.

Integrating a backing system can be highly beneficial for poker rooms, as it can increase player activity, attract new users, and make the game more appealing to both amateurs and professionals seeking funding for tournaments and gaming sessions.

Why has this topic become relevant recently?

The discussion around poker backing funds has become more prominent in recent years for several reasons. First, the rise of online poker has made it easier for players to connect with investors and secure funding for higher-stakes games. The accessibility of online platforms allows beginners and semi-professional players to participate in tournaments they otherwise could not afford.

Second, social media and poker streaming have increased the visibility of professional players and their earnings. This has inspired more aspiring players to seek financial backing and encouraged investors to explore this opportunity as a potential source of profit.

Third, the growing professionalisation of poker has made managing bankrolls and mitigating risk more important than ever. Backing funds provide a structured way to share risk, which appeals to both players and investors in a competitive environment.

Finally, innovations in online platforms and tools for tracking and managing backing agreements have made the process more secure and transparent, reducing some of the risks that previously discouraged both players and investors.

Overall, these factors have combined to make poker backing funds a hot topic among players, investors, and the wider poker community.

Conclusions

The existence of funds is certainly beneficial for poker players who want to become professionals in their field. However, they also pose certain risks to the poker ecosystem, as rooms now aim to attract as many recreational players as possible.

At the same time, platform representatives should consider the potential benefits of allowing funds. Simply permitting players to cooperate with conscientious, reliable, and reputable funds can enhance the site’s reputation among those for whom poker is a major part of their lives.