I’ve never bought stock on margin. I’ve never had a car loan. I didn’t borrow money to go to graduate school. I keep my credit card balance at a zero or minimum balance. I have a mortgage, but have never taken out a home equity loan. I can’t wait to pay it off. If I can’t afford it, I don’t buy it.
I hate borrowing or owing money. This is just another reason why I couldn’t be a professional player. That – and my game isn’t all that good.
I guess I’m thinking about money and poker because this is the high season for borrowing in the poker world. People are always quick to say that money is the yardstick for poker. People new to poker assume this means good players have money and bad players don’t. But that oversimplifies both the variance and lifestyle of poker. Poker’s variance can take its toll; it doesn’t take long for a “bad run” to cripple a healthy bankroll. Even when “running good,” it’s hard for professionals to come out ahead of a WSOP buy-in budget that tops 100 grand. Egos often trump bankroll management, preventing players from stepping down in levels or forgoing tournaments for satellites. And there are plenty of savvy poker players who lose hundreds of thousands of dollars each year betting sports, horses, craps and blackjack.
I was shocked the first time I saw a former bracelet winner hustling for buy-ins at a tournament. Eventually I came to know of a subset of well known players who were always looking for a backer or a loan.
But it probably wasn’t until I covered the WSOP in 2005 that I realized how systemic debt was at poker’s highest echelons. If you had beamed me to a remote village in Africa or a bustling Asian city, I don’t think I would have felt as foreign as I did watching the swirling sea of poker’s debt back then.
This is what I wrote as I watched on June 25, 2005:
If you are a “known” player, when you make a big final table finish, the phone begins to ring. Yes, some of these are calls of congratulations. But most of the time, they are “network” calls. If you had a backer or backers, they are going to be among the first to make contact. Anyone you’ve borrowed money from in the recent past, might just take this moment to check in. And the rest of the calls are from players looking to borrow money to tide them over – just as you may have done before your score.
While the dawning age of endorsements and sponsorships (and dare we hope, television rights) may ultimately alter the resource landscape for tournament players, this investment intensive, high variance, activity has long been supported by “the float.” The float is a large pool of money that ebbs and flows through the poker world; seemingly belonging to no one, and yet belonging to all.
It would be naïve to assume that all these players were floating their own boats. It takes a pretty large bankroll to sail the open tournament seas. Clearly there are those that float more than others. And clearly there are a disproportionately smaller number of players and supporters that provide the largest ballast. But the network has remarkably large tentacles. And whether you’re looking for a buoy or the Armada, there is a network to be tapped.
While people often wax poetic about the propensity of poker players to honor their debts, it’s not exactly as we laymen might perceive. While there is score keeping, it is more generic than specific. The same money that goes out doesn’t always come back the same route. And sometimes the money doesn’t come back at all. A few savvy players confess to losing more money on the float than by actually playing the game. There are definitely those players that have abused the network, thus having to go farther and farther a field to secure resources once the “core float” senses that a player gets more than they are willing or able to give. But the most important element of the float is that it continues to flow. This appears to be more important than its actual source or destination.
Some WSOP evidence of the float in action (without names, of course):
– During a rebuy event, Player A taps Player B for $4000 that is owed to them, explaining that they need it because they are going to loan Player C $1000. Player D tells a dealer during the break that they are going to pay for the same Player C’s rebuy. Player E asks Player A how they are positioned for cash as they are not sure how many rebuys they are likely to make. Player A says he can cover it.
– Player F makes a final table. Player G’s wife complains that Player F borrowed money from them when Player G made an earlier final table, but now that Player F is flush, he won’t return their calls.
– During a final table, Player H comes from the rail to give final table Player J $50,000 in cash.
– Player K is at the final table. Players X,Y, and Z appear to be sweating him. What they are really sweating is finally being able to collect a small percentage of what Player K owes them.
No notes are taken. Nothing is put down in writing. Trying to quantify it would be like trying to measure the volume of water in a wave. But as a surfer comes to know the water, a player knows the float. Admittedly, the surf is probably higher during the WSOP and has more zeros. The normal float is probably a mere trickle by comparison, a buy-in here or a rent check there. But if you’re going to play this high variance game, understanding the float is a skill you may need to develop.