Giving Out Loans to Your Poker Players
Posted on March 10, 2008
Filed Under Articles, Tips and Advice
The biggest headache any the host of a home poker game must go through is giving out loans to your players. This can often time hurt your profit margins, and can be an extreme hassle to recover. That’s the one big plus casinos don’t have to worry about is that they never have to give out loans.
Giving out loans to your poker players is inevitable. Eventually, some players will start going broke, but maintain the addiction to play, to gamble, to win their money back. Many of your regular players will start asking for loans to play and won’t be able to pay it back for many weeks. The time you sped waiting for them to pay back the loan, your own pocket’s hurting. Depending on the stakes, the loans you can expect to give out can range from $20 to a few thousand dollars.
A loan policy must be established to help protect yourself from losing too much money. Consider the following before giving out a loan:
- How well do you know the player? Do you know anything about him? Where he works? His friends? His trust? How often have they been coming? Are they a regular? Do you want to deny him a loan and lose him as a player? I view this as similar to their overall credit. I once had a player, who came to all my games for month straight. However, I was hesitant in giving him a loan because he played at my friend’s game, took a loan, and never answered any of his calls or paid back the loan as he promised. Because of that, I tried my best to avoid giving him loan. Unfortunately, he asked a few times, and I needed his presence for a game to continue one night. He promised he would pay back the loan within the next few days. This was over 5 months ago, and I haven’t heard from him since. The only thing I know about him is his phone #. My advice is to only give loans to someone you trust and know and that if needed, you can be more confrontational about requesting your money back. A phone number is NOT enough information to meet the requirements of issuing a loan. Know his job, his friends, his background before you give a loan.
- Do you need to give the loan? Often times, you’re faced with the issue of not having enough players. Without enough players, the game cannot start or continue. Consider the benefit of giving out the loan. Will it be worth it to give the loan for the game to start? Will it be worth it to loan this player $150 so that the game may continue for an hour or two longer and make you $40, $60? How much more will you make if the game continues? I was frequently faced with the dilemma that the game would break if I didn’t give out a loan to one or two players. After all, you make money by keeping the game going as long as possible. However, you must consider the time it’ll take for the players that borrowed from you to repay you back. If it takes them 2 weeks to pay back $150, $200, then don’t think continuing the game for an hour longer to make an extra $40 isn’t worth it. I’d rather keep my $150, than make $190 in 2 weeks. Time is money, keep that in mind. The longer a player takes to pay you back, the lesser value that money carries over time. It’s just like inflation.
- Does that player bring money to the table? This partially goes in hand with one of the topics covered in the first point. What is the player’s value? Evey host of a home poker game knows the players that are valuable and the players they could go without. You want the high rollers, you want the players that bring their own money and you never have to give a loan to. Those are the players that make you money, they create huge pots, lose their money, and buy back in. These players create action and the house profits hugely off action. The tighter, smaller buy-in players do not bring as much value. And then you have the players that always seem to need a loan to play. If I have a player who 9 times out of 10, will buy in big, bring their own money, and never ask for a loan, I almost never hesitate to give them a loan. They’ve made me a lot of money, and furthermore, I’m confident they’ll pay it back within a very reasonable time. Keep in mind how much value that player brings to your game.
Keep in mind the credit and the value of loaning a player money before you do. It’s not always worth it, but when you must, make sure that it’ll be worth the benefit. Loans can be a devastation to your profit if you’re not careful about it. Be sure to make establish a loan policy so that all players are aware before asking you. In the next upcoming posts, I will provide some basic establishments that your loan policy should have, to protect you and your game.
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