Player/Investor Shares

[Optimus Prime]

I'm looking into forming a team where I'm the only player and there are 3 investors. What would a typical share of profits be between players and investors in this arrangement?

[Al Mucous]

I recommend lobbying for 100% player share and bank breaks after each hand. More common is a 50/50 long-run split, but there's no magic to 50/50. It could be any number all the parties find reasonable. As significant as the intended long-run split are the terms under which bank breaks actually occur. And the manner in which the actual split is computed in any given break. A seemingly simple approach is to break the bank when it doubles and treat any doubled bank as having reached the long run for split purposes. But any proposed bank design can have perverse effects. A single player could of course lose for a very long time. If you agree to play until doubling, are you really able to commit to continue playing indefinitely until reaching that goal? Are your investors really able to commit to keeping money in the venture indefinitely? Think it through. Imagine the worst-case scenarios. Do your investors understand blackjack? Taxes as applied to gambling? Do they realize that in the event of a multi-year bank, their losses in year 1 can't legally be offset against wins in year 2 for tax purposes? That all wins must be reported for tax purposes on an annual basis, even if the bank hasn't broken or has lost overall? Etc etc!

[Meistro123]

Go for a 50/50 split between players and investors, chopping (and presumably forming a new bankroll) when the bankroll doubles. So each investor will get a 50% ROI if you don't bust. Make sure to have a relatively conservative bet spread and a plan to decrease bet sizes if you are losing.

[Optimus Prime]

I was going to recommend playing with a 5% ROR and resizing bets (up or down) as needed to maintain that 5% ROR - reasonable?

[Meistro123]

yah I mean you don't have to resize constantly, just resize if you lose 25% of your bank (so you have 75% of what you started with) or whatever. the other thing is you really need to keep expenses in check, because otherwise that really blows up your ROR.

[Jack Daniels]

I am so glad I can get exposure to this advices from this knowledgeable responders. Long live Ap.

[cc12b]

I recommend lobbying for 100% player share and bank breaks after each hand. More common is a 50/50 long-run split, but there's no magic to 50/50.

I would prefer bank breaks after each trip or session. Who know if a partner would/could be with you next time.

[Al Mucous]

I would prefer bank breaks after each trip or session. Who know if a partner would/could be with you next time.

I was kidding about breaking after every hand. Very short-duration banks make minimal progress into the long run and generally require effective splits so tilted toward investors that the investors would likely have concerns about player motivation. At least I would, in a case like this. Especially if I knew the player expected the relationship not to last!

Perhaps you're thinking of a case where the wins or losses are simply divided equally among participants. In that case, frequent breaks are no prob. But that's not what the OP described.