Markup in poker is the percentage premium charged above a tournament buy-in when selling action or receiving backing, compensating the backer for taking on financial risk.
Markup represents the extra cost investors pay beyond the actual tournament entry fee when backing a poker player. For example, if a player sells 50% of a $10,000 buy-in tournament at 1.2 markup, investors pay $6,000 for half the action instead of $5,000. This 20% premium compensates backers for assuming financial risk and reflects the player’s expected return on investment.
The markup percentage typically ranges from 1.0 (no markup) to 1.5 or higher for proven winners. Players justify markup based on their track record, skill edge, and historical ROI. A player with a documented 40% ROI might charge 1.3 markup, while someone breaking even would sell at 1.0. The poker staking marketplace has established these norms through years of negotiation between players and investors.
How to Calculate Markup
The markup formula is straightforward:
Amount Investor Pays = (Buy-in × Percentage of Action) × Markup
Example 1: Standard Markup Calculation
You’re playing a $1,000 tournament and selling 40% at 1.25 markup.
Base cost: $1,000 × 0.40 = $400
With markup: $400 × 1.25 = $500
The investor pays $500 for 40% of your action.
Practical Applications
Decision Making
As an investor, compare the markup to the player’s proven ROI. If a player charges 1.3 markup but only shows 15% historical ROI, you’re overpaying. The markup should be lower than the player’s expected ROI to maintain profitability.
Common Shortcuts
Quick markup math: subtract 1 from the markup to find the premium percentage. A 1.35 markup means a 35% premium. A 1.1 markup means a 10% premium.
When Does Markup Matter?
Markup becomes crucial in high-stakes tournaments where even small percentage differences mean thousands of dollars. A 1.4 markup on a $25,000 buy-in adds $10,000 in cost for full action.
Common Mistakes with Markup
Charging unjustified markup. New players sometimes charge 1.2+ markup without proven results. This alienates potential backers and damages long-term relationships.
Key Takeaway
Markup is the marketplace’s way of pricing poker skill,proven winners command premiums while break-even players sell at face value. Fair markup reflects actual ROI potential, creating win-win scenarios for both players and backers.
Pro Tip: Track your tournament results meticulously to justify your markup. Backers want to see at least 100+ tournament sample sizes with clear profit before paying significant premiums.
