21-year-old Nick Marchington made a dream run at poker’s biggest event last month, eventually busting out on night one of the final table, cashing a cool $1,525,000 in the process. That’s when his problems began, however. According to poker website Pocket Fives, the seventh-place finisher in the 2019 World Series of Poker is now facing a lawsuit from two backers who allege that he owes them 10 percent ($152,500, on top of any legal fees) of his Main Event winnings.
The complicated matter involves the poker practice of stakings, wherein outside investors put in their own money into a player’s buy-in, in order to secure a percentage of his winnings. The two backers, Colin Hartley and David Yee, represent C Biscuit Stables, a company that deals in stakings. They are alleging in court that they had a 10 percent stake in Marchington’s eventual Main Event winnings by virtue of a deal that saw them pay a total of $1,750 for two events: a $5,000 Six Man No Limit Hold’em and the $10,000 buy-in Main Event.
This is standard practice for higher-level players, who sell their stakes to help cover parts of the buy-ins in return for splitting the profits. The problem in Marchington’s case came with the practice of markups, which essentially allow players to charge a premium for their services. Marchington initially sold the Main Event stakes to Yee and Hartley for a 1.2 markup; they paid 20 percent extra on the stakes in order to secure the 10 percent revenue from his total winnings.
However, on July 3, Marchington was able to secure a 1.7 markup, and decided to renege on the original deal. According to Yee and Hartley, Marchington messaged them saying as much: “I am playing the main event but unfortunately your piece is cancelled. I know this is bad practice but I have to do what’s best for myself since I lost a lot on the trip.”
This isn’t strictly speaking illegal; as long as the original stakes are refunded, and there is confirmation that the deal has been cancelled, all bets are off. It’s certainly frowned upon, but that wouldn’t hold up in court. A message from one of the backers, reported by Flushdraw, says as much:
hey Nick, highly disappointed with this result and this is not normal by the poker community standards. we’ve talked to several backers and they said that once action is booked and money is delivered, it’s something that should be upheld. players can’t simply book action as a placeholder and then shop around for better rates.
However, Yee and Hartley are arguing that Marchington didn’t return their refund until after the Main Event started, on day two; he finished the first day of the tournament with 109,100 chips, which was a good piece of foreshadowing for his eventual top 10 finish.
Marchington’s defense is that he tried to pay the pair before the tournament started in the same method that they paid him—through PokerStars—before eventually settling on cash, which both parties agreed was delivered on July 5. As Flushdraw analyzed in their reporting on the lawsuit, the timeline isn’t in dispute for the refund, but rather the validity of the cancellation. Marchington’s counsel is arguing that agreeing to a refund is akin to a contract:
It also leads to a question raised by Marchington’s counsel in its initial response to the complaint, which has also been obtained by Flushdraw. The C Biscuit backers originally agreed to accept a refund, though that was delayed by Marchington’s lack of immediate cash. Yet agreeing to the refund in principle is itself a contractual obligation.
Marchington tweeted out a thread on Saturday explaining his side of the situation, acknowledging that it was a bit scummy to renege on the original deal in favor of a better one, but also iterating that the No Limit Hold’em stakes and those for the Main Event were different, and so within his right to cancel one or the other (he did not cancel the No Limit Hold’em deal):
A judge granted Yee and Hartley a temporary restraining order against Marchington, which blocks him from cashing his winnings from the Main Event until the issue is settled in court. Whatever the result, this could be a landmark case in the world of poker stakings, a facet of poker’s underbelly grounded as much in handshake deals as the actual law.