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Poker Pros Find Investors For $1 Million WSOP Event

The Poker Community At Large Has Stake In Sunday's Tournament

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Sunday’s $1 million buy-in event at the World Series of Poker has a 48-player cap, but there may be hundreds of people financially sweating the action. By selling shares, some of the game’s best have found the funds to play the largest open buy-in event in poker history and fight for the $18 million first-place prize.

Despite working on the felt, Noah Schwartz looked outside the gambling community for his buy-in. He said he went to “a few hedge fund guys from New York.”

“There was mutual admiration for each other’s work, I guess you can say,” Schwartz said. “After laying it all out, they decided that I was a good investment and put up various pieces.”

It wasn’t difficult for Schwartz to sell action. “It’s because I’m having a really good year. I won that tournament at the PCA and then final tabled the L.A. Poker Classic main event and the EPT Grand Final high roller in Monte Carlo. So I’ve proven that I can play with anybody,” he said.

Schwartz formed One Drop Investments LLC to facilitate his stake.

“I have a lot of people depending on me,” Schwartz added. “These opportunities are few and far between, so I’m definitely feeling the pressure, but that’s when I play my best.”

Tournament veteran Jason Mercier stuck to the poker community for his buy-in. He declined to go into details, but did say that he sold a lot.

The two-time bracelet winner said it was a “grind” to raise the money. Mercier has cashed for more than $8 million lifetime in tournaments.

Mizrachi after his win ThursdayMichael Mizrachi bought into the $1 million the night he won $1.45 million in the $50,000 Players Championship. He said he wasn’t using the $50,000 event as a satellite. He had all the pieces sold prior to registering, which leaves Mizrachi with about 15 percent of himself.

“There’s a lot of investors. People still want to buy, but I’m sold out,” the three-time bracelet winner said.

Cash game grinder Ben Lamb, who has played just four tournaments so far this year, said he has sold some pieces, both within the poker community and outside of it. He charged 10 percent markup on his shares.

Sam Trickett, a frequent competitor in the high-stakes Macau cash games, has sponsorship from online betting site Matchbook for the $1 million event. The terms of the deal were not disclosed.

While poker pros have pieced themselves out, some of the businessmen registered are going stag on Sunday. Cary Katz, CEO of College Loan Corp., is one of them.

“I certainly don’t think I have an advantage, even if you factor in the pressure that comes with such a high buy-in on some of the other players,” Katz said. “You know, you only live once, so I figured it would be a fun experience.”

Hedge fund manger and poker player Dan Shak has also put up 100 percent of the $1 million.

“It was a tough decision,” he said. “I’ve publicly said in the past that I think tournament buy-ins are getting too big and taking too much money out of the poker world in general, but as a one-time thing, with the money going to charity, I think we can accept it.”

The tournament will collect $111,111 from each buy-in and ship it to One Drop, a charity that focuses on global awareness for clean drinking water. The organization is run by billionaire Guy Laliberte, who will also compete on Sunday.

As of Friday afternoon, 42 players had given the Rio their respective $1 million entry.

Julio Rodriguez contributed to this story.

Follow Brian Pempus on Twitter — @brianpempus

 
 
 
 

Comments

idun215
almost 9 years ago

it seems like a lose lose situation for the player. Even if you do sell 50perccent of your stake your still entitled to all the taxes that comes with it. further more cutting into your payday.

 
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videpost
almost 9 years ago

You can deduct the payments to backers, but they have to get a 1099

 
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WileECoyote
almost 9 years ago

Incorrect. The winner gets a W2-G, not a 1099.

The winner then fills out form 5754 which lists all the actual members of the winning team, their percentage ownership and their SSNs or TINs. 5754 is then given to the payer, in this case, the RIO, who is supposed to issue a correct W2G to the player and new W2Gs to each investor.

here are the instructions:

http://www.irs.gov/instructions/iw2g/ar02.html#d0e665

However, the RIO refuses to follow the law and honor form 5754. The WSOP refusing to honor 5754 goes all the way back to Binions circa 2002:

http://www.fibs.com/tda/msg00545.html

as confirmed by Mike Caro

http://www.fibs.com/tda/msg00547.html

Having cashed in the WSOP in 2011 and having backers, I had to figure all of this out on my own. My cash was small enough that, in the end, I simply paid the taxes and distributed the remainder to my investors. While that is technically against the law, I was left with no other choice.

 
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bparmalee
almost 9 years ago

I would like to know the total rake...taxes and pit gambling losses that leaves the poker community over the summer. Seems like it's a huge a number. You have to wonder how long this will be sustainable. None of that money ever makes it way back into the "poker pool".... I would be curious to know what the number is.

 
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clunker
almost 9 years ago

You can use this tournament to get and idea. 1 million $ entry fee. 11% goes to 1 Drop. 25% to 30% is withheld for federal tax. Then you have Nev. state,county and local taxes which probably add up to 3% to 5%. Then you have money that has to be payed to backers. Then you have about 1/3 of field is listed as businessmen. Taxes and rake alone somewhere around 40%+. Taking this plus how much the one time{casual} player wins and pit loses a wild guess around 60% leaves the poker world never to be seen again. That's why these obscenely large buy in tournaments with small fields and huge lottery like pay outs will in the end hurt poker Also how is and event that is turning people away supposedly[There is a waiting list] considered a bracelet event. This really is nothing more then a private home game run by the casino.

 
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Rob4
almost 9 years ago

How does this truly hurt poker? If you can afford the high stakes game and invest the money, it's what you do. How does that prevent any one else (lower stakes player) from investing in any other WSOP event or going to a casino any other time? There are high stakes games played through out the world at various casinos every single day, just not televised. Large amounts of money leave the poker world daily, there is no poker rule anywhere that says winnings must be reinvested in poker. And, if you cash in any other WSOP event, you are still paying the same percentage of taxes. You can't judge this event simply because there are a limited number of entrants or the buy-in limits the field. It's good for the game because it's positive publicity for a charity and is being broadcast on ESPN live. People can see what poker skill about. Players will keep playing, and money will keep coming in and out of poker, regardless of this one event.

 
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clunker
almost 9 years ago

On line poker was a learning and a beginning process for many of today's pros. Moneymaker fueled the poker craze but with out small{in many cases starting in penny games ]buy in games how many of the players today would there be playing. The bigger the buy in the more money disappears from the game. Yes it's for a good cause but if you asked a 1000 random people what ! Drop was you would find not many know and fewer care. The average person hears about a million $ buy in tournament and their not going to get excited about poker because in real life it is and unrealistic goal. As far as the winner losing what they win back to the poker community there is no rule except greed or just being a gambler.

 
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