40,000% ROI in 7 days
There are not many ways to legally invest $5,000 and have it pay back $2,125,000 in 7 days. However, Jerry Ditzel was able to generate that investment return when he paid half of his friend Steve Dannenmann‘s entry fee into the 2005 World Series of Poker. While Steve knew he was talented poker player, he felt that the odds of him even breaking even on his $10,000 entry fee were unlikely. After 7 days of playing poker, he finished in 2nd place and was awarded a $4,250,000 prize. He happily split the pot as he had agreed to do with his friend.
Obviously the Ditzel/Dannemann situation is an enormous outlier. Dannemann was a CPA by trade and there was no indication that he would be competing with the world’s elite players (full-time professionals) for the top purse. Other players might have demanded that you pay the entire entry fee for a smaller percentage of the purse. Also, purses are rarely this large and sponsored professionals do generally win the bigger tournaments. That was what made the story of this unknown CPA and his friend such a remarkable one. Also, Ditzel probably looked at the investment as having entertainment value to him, and enjoyed spending the time in Las Vegas cheering on his friend.
Extremely High Risk Investment
This type of investment is high risk and in most cases would involve the total loss of your investment. It seems that there are two issues that you would need to come to grips with. One is that the greatest players are generally going to be professionals and they already have sponsors — mostly poker-related but even with main stream companies like Phil Hellmuth’s deal with Carl’s Jr. The other issue is that the if the purses are small like $500 to $2500, who is going to want to give up a large portion of their potential winnings rather than pay the poker entry fee themselves? So the entry fee needs to be large enough and the player you are paying or splitting the fee with needs to be unknown and inexperienced enough not to warrant the attention of sponsors.
The other issue is that we are dealing with professional poker here. Obviously it attracts some shady characters. In 2011, the FBI famously took down the biggest poker sites and arrested their owners (“Black Friday“). Many of the people involved in poker offline at casinos and card rooms were also involved online. Many people who make a living off of playing poker don’t even tell their friends exactly what they do. This isn’t the type of investment you want to brag to the local chamber of commerce about. All that being said, there is obviously potential for a large return if you are willing to stomach the risk.
How to Get Started Investing in Poker Entry Fees
There are a number of regional and national poker events that go own. Virtually any casino would have some type of poker tournament and casinos are now within short driving distance of virtually every major city except Honolulu and Anchorage. One place to start would be the World Poker Tour’s upcoming list of events. As far finding someone with poker talent that is worth investing in, it would probably take hanging out in poker circles or at local casinos playing in order to meet the right people.