STACEY VANEK SMITH, HOST:

On a hot day in the summer of 2012, Derek Wolters drives to the Rio Casino in Las Vegas.

KEITH ROMER, HOST:

He's going there to play in the most famous poker tournament in the world, the World Series of Poker Main Event.

VANEK SMITH: What do you wear to these tournaments?

DEREK WOLTERS: Personally, I just try to wear, like, comfortable clothes, yeah.

VANEK SMITH: Like a tracksuit?

WOLTERS: (Laughter) Not a tracksuit. I try to, like, look presentable - just, like, jeans, T-shirt, hoodie.

ROMER: Sunglasses or no sunglasses?

WOLTERS: I don't wear sunglasses. It would just be weird to me, wearing them inside.

ROMER: Because, in fact, it is weird to wear sunglasses inside.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: We're back in Las Vegas for the 43rd edition of poker's most prestigious tournament.

ROMER: Derek, like everyone at the tournament, has to pay $10,000 to play. If he wins, first prize is 8.5 million bucks.

VANEK SMITH: Derek is a professional poker player, and he figures he's got an edge.

WOLTERS: 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.

ROMER: When you say recreational players, is that just a nice way of saying bad players (laughter)?

WOLTERS: Yes. That's the...

VANEK SMITH: (Laughter).

WOLTERS: Yeah, that's the PC way - one of the PC ways of saying that.

VANEK SMITH: Derek is going to pick off these recreational players one by one and make a killing.

ROMER: That is the plan anyway, but that is not how things go down.

VANEK SMITH: On the very first day of the tournament, Derek goes all in, and he loses. He's out.

WOLTERS: It's a pretty bad feeling. You lose the last of your chips. 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. The hallways are so quiet just because, like, everyone's at their seats playing.

VANEK SMITH: The $10,000 Derek used to buy into the World Series of Poker - that is gone. And Derek is completely out of the tournament.

ROMER: Except - he isn't. In fact, the 2012 Main Event is going to be the biggest payday of Derek Wolters's life.

(SOUNDBITE OF SARAH CHERNOFF SONG, "TURN THE LIGHTS ON")

ROMER: Hello, and welcome to PLANET MONEY. I'm Keith Romer.

VANEK SMITH: And I'm Stacey Vanek Smith. Today on the show, the secret world of big money poker tournaments.

ROMER: What you see on TV - that is just the surface of things.

VANEK SMITH: There is a game behind the game.

(SOUNDBITE OF SONG, "TURN THE LIGHTS ON")

SARAH CHERNOFF: (Singing) Lights are on, and night is cold. Everything's so beautiful...

ROMER: Stacey?

VANEK SMITH: Yes.

ROMER: I want you to get ready for some sweet ESPN poker tape.

VANEK SMITH: All right. Bring it on.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: Before 6,598 players compete for poker's most important title, the tournament rooms are empty - no players, no dealers, no stories. The only thing that fills the room is hope.

ROMER: That is how you report on an empty room.

VANEK SMITH: (Laughter) Outside that empty room, though, there are some pretty great stories happening.

ROMER: One of those stories is about that player Derek you heard at 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.

VANEK SMITH: The youngest guy in their group is just 21. He's a skinny guy with longish hair that he wears kind of swiped across his forehead. His name is Jake Balsiger. He told us he didn't actually get his own room in this house.

JAKE BALSIGER: No, I was sleeping on the couch (laughter). It was a huge couch, though. It was pretty nice, actually.

ROMER: In terms of this group of guys that you're staying with, were you kind of the low man on the totem pole?

BALSIGER: Oh, yeah, definitely (laugher) -- unquestionably.

VANEK SMITH: Jake cannot afford to buy into this big poker tournament. It costs $10,000, and he's in college. But he's friends with a bunch of the guys, so he comes down for a visit. He figures he'll go home once the tournament starts.

BALSIGER: I had no intention of playing it. You know, it was a lot of money, and I didn't feel comfortable risking that or anything, you know. And my friend Max was having his birthday party that day. (Laughter) And I had actually literally packed up everything I brought to Vegas into my car. And I was going to leave, and then they were, like, you know, just hang out, you know, at the party, you know, for a couple hours. Like, you know, you can drive home, like, any time of the day. It's fine. Just hang out for a little bit.

VANEK SMITH: The party goes on for a while. People are drinking, and Derek and the other guys are, like, Jake, you have to do this. You just turned 21. You can actually legally play in the tournament. It's the world series - the Main Event.

BALSIGER: I don't know if it was just because they were, you know, drunk and in a good mood (laughter) or what not. But they're, like, oh, you know, man. You have to play the main. Just stay for the main. We'll buy a piece.

ROMER: The guys say, look, we will pay for it. We will pay the $10,000 so you can play.

VANEK SMITH: Who are these friends?

ROMER: I don't know. I don't have friends like that.

VANEK SMITH: 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 chips in 10 percent of the buy-in, that guy will get 10 percent of whatever Jake, the kid sleeping on the couch, wins.

ROMER: Did he pass a hat and people just be, like, I'll but in 1,500? Like, how did that actually work?

BALSIGER: Yeah. I mean, pretty much so. I don't know who first said it, but one of them was like, yeah, you know, I'll take, like, 10 percent. And somebody else was like, yeah, I'll take 10. Somebody else was like, yeah, I'll take, you know, 10 or 15. And then it just go up to number where if I lost, I lost it. It's not too huge of a risk.

VANEK SMITH: So if Jake wins, he would get to keep some of the money. But most of it would go to his roommates - like Derek.

ROMER: Derek puts in $1,500. And now he basically owns shares in Jake, like Jake is a stock or something.

VANEK SMITH: And Jake is not his only investment. Derek actually has to make a spreadsheet to keep track of all the players he's investing money in.

WOLTERS: Let's see. A lot of these are screen names. Is that OK?

ROMER: Yeah, that's fine.

WOLTERS: OK. So AcidKnight, 5 percent; ChipChucker, 5 percent; ZacVac, 5 percent; JumanjiBoard, 5 percent; Kuvino, 5 percent; SkillsThatKillz, 5 percent; Kswell, 5 percent; 9mil, 5 percent, John K., 5 percent; ManChild, 5 percent; Jake, 15 percent.

I think that's it.

VANEK SMITH: Some of these guys, Derek is friends with. But some, he says, he wouldn't recognize even if he ran into them at the tournament. They're just poker players that he finds online.

ROMER: So you just sent 500 bucks to a dude named ChipChucker that you've never seen in your life?

WOLTERS: Yeah, probably, like, half of the deals I do, like, I never meet the person, yeah.

VANEK SMITH: So this is part of the game behind the game. Poker tournament are really expensive, and so a lot of the players you see on TV, they are not playing with their own money.

ROMER: Even really good players, most of the time they 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.

VANEK SMITH: 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.

ROMER: That's why poker players like Derek spread their risks around a little. Instead of just making one giant bet on themselves, they make all these other little bets too. Of course, buying shares in other players can get expensive, so there's another thing poker players do. They trade shares of themselves with other players.

VANEK SMITH: Before the tournament begins, Derek does this too. It's a simple system. He finds a guy he wants to trade with, and they make a deal.

WOLTERS: I'll give him 5 percent of whatever I win, and he'll give me 5 percent of whatever he wins.

ROMER: For this tournament, Derek made five swaps.

WOLTERS: I swapped with my friends Chardin, Max, Jake, Ajay and Misha. They were all 5 percent.

VANEK SMITH: These are all handshake deals, by the way - no contracts.

WOLTERS: Normally, you'll plan it, like, a day in advance. You'll just, like, message your friends and, 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 a while in the hallway, and you're going to be, like, oh, yeah, hey, let's swap a little bit.

ROMER: You'll just send a text message and say - hey, if you win $8 million, I'll get 5 percent of it, right? You're cool with that? I'm cool with that. Like, that's it?

WOLTERS: Yep, that's it (laughter),

ROMER: Derek says you only really want to swap percentages with someone who's as good as you are.

VANEK SMITH: Has someone ever asked you to swap, and you were, like, no, I'm sorry. I think you're not-so-good.

WOLTERS: One move is, like, someone asks you to swap, you don't really want to. You're like yeah, I'll, like, swap 1 percent with you (laughter). There's a lot of ways you could deal with the situation. Like, you can just say, oh, sorry, I'm swapped out. I've already swapped with so many people, you know, and it's not a big deal.

ROMER: Derek is not 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 a percentage of themselves.

VANEK SMITH: And even more than that are swapping pieces of themselves.

WOLTERS: I would say basically every professional is swapping.

VANEK SMITH: And this can lead to some awkward situations.

ROMER: Like, what if Derek and ChipChucker end up sitting next to each other? Why would Derek try to knock ChipChucker out? That hurts him. That's his investment. Does it ever happen that you end up at the same table with somebody you've swapped shares with or you own shares of?

WOLTERS: Yeah. That happens all the time. And yeah, as long as you have, like, a small percentage of them, it's not really a big deal.

ROMER: But I mean - something like, in the business world or in the professional world - or in the world, we would call this a conflict of interest.

WOLTERS: Mm-hm.

VANEK SMITH: (Laughter).

WOLTERS: Yeah, it is definitely a conflict of interest. And you don't want to - you don't want to cheat the other players basically.

ROMER: 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.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: This is a tournament for everyone, and everyone is here - pros, amateurs, dreamers.

ROMER: This is the scene when the tournament starts. There are three giant rooms in the Rio Casino, poker tables as far as you can see. There are 6,000 people playing in this tournament. You can hear the sound of the chips in the room.

VANEK SMITH: Derek, as we mentioned, got knocked out of the tournament on his first day. But because of the game behind the game, he is not out. Between all of those swaps and shares, he has a piece of 15 players who are still in the tournament. It is like this little army of Dereks out there, all trying to win him money.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: All right, so a 13.5 million-chip pot. They see the trey of spades on the river.

ROMER: The tournament keeps going - day one, day two, day three. Derek's army of players gets knocked out, one after the other. By the middle of day four, Derek's only has four players left.

VANEK SMITH: Then ChipChucker goes down, then ManChild.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: One hundred forty-one pros and amateurs continue on day five.

(SOUNDBITE OF MUSIC)

ROMER: Then Kswell gets knocked out.

VANEK SMITH: Derek has only one chance left in this tournament, one player he is now pinning all of his hopes on - Jake.

ROMER: Jake, the 21-year-old kid sleeping on the couch - the one whose friends chipped in so he could play the tournament.

BALSIGER: Day one went decent. Day two went pretty well. And then from day three and on, I was just, like, running very, very good.

ROMER: Over the course of that week, did the guys from the house start treating you any differently?

BALSIGER: Yeah, I - they let me move into the master bedroom from the couch.

ROMER: Oh.

(LAUGHTER)

BALSIGER: So that was pretty cool, you know, definitely moved up in the world (laughter).

ROMER: The guys who've paid for Jake to play, they decide they need to take better care of their investment. So he gets the master bedroom and whatever else he wants. Derek says if Jake wanted something to drink at the poker table - he liked fancy juices - one of the guys would bring it to him.

WOLTERS: I know, definitely, one of his requests at the time was Naked Juice. We did a lot of that.

(LAUGHTER)

VANEK SMITH: What kind - like, the green kind?

WOLTERS: One of the fruits kinds. Yeah, I'm not sure.

ROMER: And Jake just keeps winning and hanging around.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #3: Now back to Balsiger - running deep in this 21-year-old's first ever Main Event. He makes it 2 million straight.

ROMER: And hanging around...

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #3: All right. Action on Jake Balsiger, the 21-year-old coming off his junior year at Arizona State with a raise to a half-million with a...

ROMER: ...And hanging around.

VANEK SMITH: And when those 6,598 players finally get winnowed down to nine players - to the final table of the tournament - you know who still wasn't knocked out?

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: Balsiger gets new life.

(CHEERING)

ROMER: 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.

BALSIGER: Oh, I mean, it's just the literal best feeling there is, you know. Like, during that entire time, you know, you're just on, like, complete cloud nine.

ROMER: The final table is played in this theater with 1,000 or 2,000 seats. Jake is wearing the same blue plaid shirt he wore for every day of the tournament.

BALSIGER: It's really a cool environment. It's very high-energy. You know, people are, like, cheering. People are just getting very, like, drunk during it. And you know, it's kind of just like a crazy sports game almost.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: Wow, gutsy, gutsy call.

ROMER: 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 wearing.

VANEK SMITH: Derek is there, of course, right in the front row on the rail.

WOLTERS: When you're on the rail, and you have a piece of someone, it's like you. Personally, I get a lot more nervous than when I'm playing. I'm just, like, sitting there, and I have no control.

ROMER: So it's like you're gambling.

WOLTERS: Yeah, exactly. And I mean, like, when your guy, like, gets all in, and you're just, like, watching on the sidelines - yeah, it's really intense.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: The clock about to strike midnight on Jake Balsiger's fairytale.

UNIDENTIFIED MAN #1: All right, now, the turn card...

(CROWD SCREAMING)

UNIDENTIFIED MAN #1: ...Is a 10.

(CHEERING)

VANEK SMITH: That cheering - you can probably hear Derek in there.

ROMER: After hours and hours of play, the nine players get whittled down to four.

VANEK SMITH: And Jake - skinny little Jake is still there, holding his own.

ROMER: Jake gets all in against another player, Russell Thomas.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: Ace, king for Balsiger. Ace, nine off for Thomas. And this could be the end of our evening.

ROMER: Jake wins the hand and takes Russell out of the tournament.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: And it is a seven of hearts, and that won't do it for Russell Thomas. Knocked out of the Main Event by Jake Balsiger who gets a lot stronger.

UNIDENTIFIED PEOPLE: Jake, Jake, Jake, Jake...

VANEK SMITH: In the end, that's as far as our player Jake and our investor Derek get.

ROMER: Many, many, many hours later, Jake gets knocked out himself. He takes third. But you know what you get with third place? A lot of money.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: Balsiger out - in third place, winning almost $4 million.

ROMER: What they are not telling you on TV is that Jake is not taking home $4 million. He's takes home a little under $700,000. The rest of it is going to his buddies who invested in him.

VANEK SMITH: After the tournament ends, Jake wires his friends their share. For Derek, Jake writes a personal check for $600,000 on a Hello Kitty check.

BALSIGER: Yeah. I had a Hello Kitty checkbook (laughter), which I loved. I thought it was funny (laughter).

ROMER: With his share of the money, Jake goes big.

BALSIGER: The only two, like, possessions I remember buying were a bed frame from IKEA because I'd been sleeping just, like, on the mattress on the floor and then I bought a hammock on Amazon for, like, I want to say $120.

VANEK SMITH: Derek, our investor, who watched the whole tournament from the sidelines - he took home almost as much as Jake, $600,000.

ROMER: Derek took that money and reinvested it.

VANEK SMITH: Derek still plays tournaments. But more and more, this is what he's doing - buying up shares in other players.

ROMER: Are you a better investor or a better poker player?

WOLTERS: 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 investing as me.

ROMER: Derek knows a lot about poker. He knows the math. He knows that if you need an ace or a 10 to come on the last card, you have a 17.4 percent 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.

(SOUNDBITE OF SONG, "TURN THE LIGHTS ON")

CHERNOFF: (Singing) The (unintelligible) your name I can almost feel it all again.

ROMER: By the way, I reached out to three of the other finalists. They all sold pieces big shares of themselves. Two of the guys even swapped 3 percent with each other. Special thanks today to Jesse Sylvia, Shaun Deeb, Carol Kline, Mike McDonald Ryan LaPlante and Jen Newell.

VANEK SMITH: We always love to hear what you think of the show. Email us - planetmoney@npr.org, or find us on Facebook.

ROMER: Our episode today was produced by Jess Jiang. Thank you, Jess.

VANEK SMITH: And if you're looking for more podcasts, try NPR's newest podcast. It's called Embedded. The show chooses a story from the news and goes deep - embeds with a biker in a Texas shootout or with a woman writer in the male-dominated world of late-night comedy shows. Find Embedded now at npr.org/podcasts and on the NPR One app.

I'm Stacey Vanek Smith.

ROMER: And I'm Keith Romer. Thanks for listening.

(SOUNDBITE OF SONG, "TURN THE LIGHTS ON")

CHERNOFF: (Singing) Oh, fell down the river...

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