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ABOUT THIS EPISODE

We go inside a professional poker tournament, where some of the smartest betting takes place behind the scenes.
English
United States
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TRANSCRIPT

00:00:00support for this podcast and the following message come from Sport Clips haircuts whose stylist can provide a new look or a fresh cut over 1,800 locations Now with an app for online check-in Sport Clips you choose the cut they cut the weight
00:00:17this episode originally ran in 2016 at the end of the show will give you an update on the story
00:00:24on a hot day in the summer of 2012 Derek Walters drives to the Rio Casino in Las Vegas is going there to play in the most famous poker tournament in the world the World Series of Poker Main Event what do you wear to these tournaments personally I just try to wear like comfortable clothes look presentable just like jeans t-shirt hoodie sunglasses or no sunglasses I don't wear sunglasses it would just be weird to me wearing them inside because in fact he's weird to wear sunglasses inside
00:01:00back in Las Vegas for the 43rd edition of Poker is most prestigious tournament Derek like everyone at the tournament has to pay $10,000 to play if he wins first prize 8 and 1/2 million bucks Derek is a professional poker player and he figures he's got an itch there's always going to be some pros at your table and there's going to be some recreational players usually kind of like split half and half when you say recreational players or is that just a nice way of saying bad players yes that's the yeah that's the PC way it one of the PC ways of saying that these recreational players one-by-one and make a killing that is the plan anyway but that is not how things go down on the very first day of the tournament Jericho's all in and he loses he's out it's a pretty bad feeling you lose the last of your ships what you push them over to the other player and just kind of collect your things and just like do the Walk of Shame out of the poker room to your car
00:02:00always are so quiet just because like everyone's out their seats playing the $10,000 Derek used to buy into the World Series of Poker that is gone and Derek is completely out of the term except he isn't in fact the 2012 main event is going to be the biggest payday of Derek Walters life
00:02:21hello and welcome to Planet Money I'm keep Rumer and I'm Stacey Vanek Smith today in the show The Secret World of big money poker tournaments what you see on TV that is just the surface of things there is a game behind the game
00:02:40score for this podcast and the following message come from we work Vicki fulop is the co-founder of textile company and we work member Brooklyn in it she chose to move her business into a wework office in part because of we Works flexible spaces we hope that we can keep growing and we know that we work has really great Solutions us companies become midsize and large and that they would be able to guide us to the best solution to learn more about how we work support its members grow through flexible workspace offerings visit we. Co / space matters
00:03:17star Shepherd thought she knew her dad
00:03:21but then one day a stranger called at home phone is in my ear and he sang your father's a crook did you know that the story of a Fallen Hero and the Mysterious Obsession that drove in four decades this week on hidden brain
00:03:39Stacy yes I want you to get ready for some sweet ESPN poker tape 598 players compete for pokers most important title the tournament rooms are empty no players no dealers no Stories the only thing that fills the room is hope that is how you report on an empty room outside that empty room though there are some pretty great stories happening one of those stories is about that player Derrick you heard of the beginning he's renting this house about five miles south of the Las Vegas Strip with some of his poker buddies it's a nice house there's a pool table upstairs swimming pool in the back and their group is just 21 he's a skinny guy with longest hair the worst kind of swept across his forehead his name is Jake balsiger he told us he didn't actually get his own room in this house
00:04:39you're staying with are you kind of the low man on the totem pole unquestionably it cost $10,000 and he's in college but he's friends with a bunch of the guys we come down for a visit he figures he'll go home once the tournament starts my friend Max is having his birthday party that day and actually literally packed up everything I brought that I get into my car and I was going to leave in there like at the party for you to a couple hours like you didn't drive home like anytime today is fine just hang out for a little bit the party goes on for a while people are drinking and Derek and the other guys are like Jake you got to do this you just turned 21 you can actually legally play in the tournament it's the World Series the main event
00:05:39he for it we will pay the $10,000 so you can play who are these friends I don't know I don't have friends like that actually they're not just giving him the money his roommates are offering to stake him that is the term and what it means is that they're going to be investing in Jake if someone ships in 10% of the buying that guy will get 10% of whatever Jake the kids sleeping on the couch wins as a hat in people just be like I'll put in 1500 like how did that actually work pretty much so so I don't know who first said it but one of them like me up like I'll pay you know 10 or 15 gallon to the number to wear if I lost I lost but it's not too much of a risk is roommates like Derek Derek Watson $1,500 and now he basically owns shares in Jake Jake is a stock or something that is only investment spreadsheet to keep track of all
00:06:39players he's investing money in a lot of these are screen names is that okay yeah that's fine okay so acid night 5% chip chucker 5% Zach vac 5% Jumanji board 5% Covino 5% Skillz that killz 5% case weld 5% 9 mil 5% John Kay 5% Manchild 5% Jake 15% think that's I think that's it says he wouldn't recognize even if you ran into them at the tournament there just poker players that he finds online so you just said five hundred bucks to a dude named chip chucker that you've never seen in your life you're probably like half of the deals I do like I never meet the person behind the game poker tournaments are really expensive they are not playing with their own
00:07:39even really good players most the time I enter a tournament they're going to lose and even if they do win only a few people are going to win the really big prizes poker tournaments are sort of a recipe for burning through a lot of money being a professional poker player is like having a job where you get paid once every 10 years and when you do get paid it's a lot of money it's 10 years worth of money but there are a lot of lean times before that that's why poker players like Derek spread their risk around a little instead of just making one giant bet on themselves they make all these other little bits to of course buying shares another players can get expensive so there's another thing poker players do they trade shares of themselves with other players before the Tournament begins Derek does this to it's a simple system he finds a guy he wants to trade with and they make a deal I'll give him 5% of whatever I win and he'll give me 5% of whatever he wins for this tournament Derek made five swaps assault with my friends Sharda and Mac
00:08:39Jake RJ and Misha they're all 5% like make sure you guys are on the same page with the swaps but sometimes you'll just see like a friend you haven't seen in awhile in the hallway and be like oh yeah I swap a little bit send a text message and say hey if you win $8000000 I'll get 5% of it right you're cool. I'm cool. Like that's it yep that's it Derek says you only really want to swap percentages with someone who's as good as you are one move is like someone asks you to swap you don't really want to hear like a whole like swap 1% with you
00:09:22there's a lot of ways you could deal with the situation but you can just say oh sorry I'm swapped out I've I've already swapped it with so many people you know and it's not a big deal. The only one doing all this swapping and buying and selling by the way he estimates that something like half of the players in this tournament have sold the percentage of themselves and even more than that I would say basically every professional is swapping and this can lead to some awkward situations like what if Derek and Chip chucker end up sitting next to each other why would Derek Titanic ship Tracker out that hurts him that's his investment does it ever happened to you end up at at the same table as somebody to swap shares with other you you own shares of yeah that happens all the time and yet as long as you have like a small percentage of them it's not really a big deal but I mean as soon as I get in the business world or in the professional world or in the world we would call this a conflict of interest
00:10:23yeah it is definitely conflict of interest and you don't want to you want to cheat the other players basically I asked a lot of poker players about this and they basically all said yeah this could be a problem but at this point the shares players have in each other they tend to be pretty small and there's just not a way to help out the other guy without hurting your own chances either they get my chips or I get my chips you can't have it both ways this is a tournament for everyone and everyone is here
00:10:53amateurs dreamers this is the scene when the tournament starts there three giant rooms in the Rio Casino poker tables as far as you can see there are six thousand people playing in this tournament near the sound of the chips in the room got knocked out of the tournament on his first date but because of the game behind the game he is not out between all of the swaps and chairs he's got a piece of 15 players who are still in the tournament it is like this little army of Derek's out they're all trying to win him money so young chip pod Stacy the tray of spades on the river tournament keeps going Army of players gets knocked out one after the other are the middle of day for Derek's only got four players left then chip Checker goes down then Manchild 141 Pro
00:11:53then case well gets knocked out Derek is only got one chance left in this tournament one player he is now pinning all of his hopes on Jake Jake the twenty-one-year-old kid sleeping on the couch the one whose friends chip tins are good play the tournament I was just like running very very good over the course of that week I did the guys in the house start treating you any differently they let me move into the master bedroom from the couch the guys who paid for Jake to play they decide they need to take better care of their investment so it's the master bedroom and whatever else he wants Derek says if Jake wanted something to drink at the poker table be like fancy juices one of the guys would bring it to him I know definitely one of his request at the time was Naked Juice we we did a lot of that
00:12:49do what kind of like the green kind of the fruit I'm not sure and Jake just keep swimming and hanging around out back to balsiger running deep in this 21 year olds first ever made of any makes a two million straight and hanging around that could on Jake balsiger the twenty-one-year-old coming off his junior year at Arizona State for the raised to 1/2 million with Ace and hanging around and windows 6598 players finally get window down to nine players to the final table of the tournament you know who still wasn't knocked out
00:13:25she don't text me when you're getting to be one of the nine players at the final table is a big deal poker players try their whole lives to get there and Jake makes it the first year he's even legally allowed inside the casino the literal best feeling there is you know like during that entire time you're just on like complete Cloud 9 the final table is played in this theater with thousand or two thousand seats Jake is wearing the same blue plaid shirt he wore for every day of the tournament get crazy sports game on Wii
00:14:06taxi taxi, at that table Jake looks really really young like they let this skinny teenager in off the street or something behind him his whole crew is wearing the same blue plaid shirts that Jake is where Derek is there of course right in the front row on the rail when are the rail and you have a piece of someone that's with you personally I get a lot more nervous than when I'm playing I'm just like sitting there and I have no control so it's like you're gambling yeah exactly and I mean like when your guy like gets all in and you just like watching on the sidelines yet yeah it's really intense strike midnight on Jake Paul stickers Fairy Tail all right now the turn card
00:14:50is that cheering you can probably hear Derek in there after hours and hours of play the nine players get whittled down to four and Jake skinny little Jake is still there holding his own Jake gets all in against another player Russell Thomas Jake wins the hand and takes Russell out of the tournament
00:15:19Georgia Russell Thomas knocked out of the main event fight Jake Paul's liquor forgets a lot stronger in the end is our player Jake and our investor Derek get many many many hours later Jake gets knocked out himself he takes third but you know what you get with their place a lot of money
00:15:44and third place winning almost four million dollars but they're not telling you on TV is that Jake is not taking home $4000000 he's taking home a little under a hundred thousand the rest of it is going to his buddies who invested in him after the tournament ends Jaguars his friends their share for Derek Jake writes a personal check for $600,000 on a Hello Kitty check out of Hello Kitty checkbook with his share of the money Jake goes big the only two possessions I remember buying where a bed frame from Ikea because I've been sleeping just like on the mattress on the floor and I bought a hammock on Amazon for like $120 Derek our investor who watched the whole tournament from the sidelines he took almost as much as Jake $600,000
00:16:44these tournaments but more and more of this is what he's doing buying up shares in other players are you a better investor a better poker player definitely better investor I think there's a lot of really good poker players but there's not that many people who do as much as messing with me Derek knows a lot about poker he knows the math he knows if you need an ace or a 10 to come on the last card you got a 17.4% chance knowing the odds is his job and for him the odds are best when he is betting on other people instead of playing himself
00:17:18that was our story in 2016 and update after the break
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00:17:41hey it's Gyros here and on the next how I built this how to women with no background and fitness set up some stationary bikes dim the lights boosted the music and created a cult following in a multimillion-dollar business called SoulCycle you can find how I built this wherever you listen to podcast
00:18:03hey it's Katie are in 2019 it's now been six and a half years since Jake won all that money at the World Series of Poker and it turned out it was not beginner's luck Jake has gone on to become a professional poker player P does not need is friends to buy him into tournaments anymore now he is one of the pros at folks like Derek are super eager to swap with and Derek still investing so I called him up on Skype to find out what's changed and how are you doing still making good money as a poker investor but now that he's got more money to invest he's started running into a problem last year it was to the point where I can put in as much as I even wanted to I could see a player who's really great in an amazing tournament but he only has like 20% available for sale Derek is learning poker investing is hard to scale-up Optimal strategy for me to be like okay I want to put 5000 into that which that's something that you could do with
00:19:03stocks or real estate maybe but not poker don't feel too bad for Derek though he's still a poker player and a really good one last February he made the final table at this big tournament in Los Angeles is $1000000 of top and ended up getting third place in the end for about 430,000 it's muddy Jake decided not to play that tournament so the 5% swap they normally would have done didn't happen that seems like that was a mistake on his part is very unlucky for J
00:19:38I did offer to help Derek with his investing problem after all I've been having all of the success at the lowest possible limits in Atlantic City I have been crushing the ones who game at the Borgata is this the year that you're going to stake me for the main event okay the ones I've never been so Borgata so that could be outside of my scope but bet that's a great start though I feel like all you've done is update your your way of refusing people that we shouldn't steak that's outside my scope that's nice
00:20:12like any good investor Derek still knows a bad deal when he sees one so instead of finding worse and worst poker players to invest in without his extra money he's diversify he shifting some of his Focus to startups
00:20:30special thanks today to Jesse Sylvia Shaun deeb Carol Cline Mike McDonald Ryan the plant and Jen Newell email us Planet Money at npr.org or find us on Facebook we are also at Planet Money on Twitter and Instagram and if you are jonesing for another podcast about poker may I suggest ESPN's 30 for 30 podcast for the show is 4th season I reported an entire episode about Chris Moneymaker and the 2003 World Series of Poker and thanks for listening

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