Anyone who gambles knows that it can be expensive, tournament entry fees and cash game buy-ins are not cheap. The old adage of you must spend money to make money is never more true than when it comes to gambling. For the average player they simply deposit to their favorite online poker room and play. If they are playing live they bring an amount they are willing to lose and cash in. For some people who are trying to make a living gambling or playing poker, these standard methods may not be how they pay for their tournament entries. An option that some grinders or pros use is staking.

Staking is a fairly simple and straight forward process. Someone called a backer will pay for the poker tournament entry or give them a buy-in for a cash game. At the end of the session the player will usually give back the entry fee and perhaps 50% of any winnings. This works great when a player wins, but what if they lose?

If money is lent and used for illegal gambling the first question asked is whether the person lending the money knew it would be used for illegal purposes. If the lender does not know it will be used for illegal gambling then the borrower will probably be liable for the loss. If the lender does know that the money is going towards illegal gambling then the lender likely can not recover the losses.

When money is lent for legal gambling then an agreement with a backer will probably be considered a legitimate business agreement. States that have a strong casino presence will likely follow this line of reasoning. The state of Nevada even has a court case that decided this rule. (Siegel v. McEvoy, 101 Nev. 623, 707 P.2d 1145 (1985)) States that have legal gambling in casinos will probably have a strong incentive to enforce these types of debts. Players in states that enforce these types of debts need to make sure that they have a proper understanding with the backer what will happen if they lose. Since the court has determined it is a business agreement that means the people involved can negotiate the terms, the freedom to contract. If you are getting funding from a backer, make sure you both know what will happen if you win or lose.