Full Tilt Ponzi Scheme
- Thread starter Alwayslit
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Fourtotheflush
BoM Apr 12'
Holy Sh!t.
Glad I never made any deposits!
Glad I never made any deposits!
bdc30
BoM May '11
From a guy who played on fulltilt poker just about every day from probably 2006-2011 this is just earth shattering news. I wouldn't want to be Lederer, Ivey, Ferguson et al right about now. At my peak, I had 5 figures on there but I'm glad to report my account on the day of the shutdown contained $0.30. They can keep it 
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Was shocked but i guess the core complaint is that they never kept enough cash to cover all the players so it is a ponzi scheme. Pokerstars is also named in the case.
banks never carry enough cash to cover all its depositors... i guess that's a ponzi scheme too...
That's honestly a ridiculous claim. Until the DOJ shut them down, it wasn't even reasonable to expect that they'd ever need to have every players account covered all at one time. I hardly see a problem with it. America just wants to regulate and tax it
That's honestly a ridiculous claim. Until the DOJ shut them down, it wasn't even reasonable to expect that they'd ever need to have every players account covered all at one time. I hardly see a problem with it. America just wants to regulate and tax it
orangedog
Navin R Johnson
My guess is that at some point the gaming industry regulations loosen... Either individual state laws change or interstate becomes feasible. Could be a ways out but that is where I think it eventually heads.
njstone
BoM January 2010
I still don't see how this is a Ponzi Scheme .. it's just an illegal business. They tried to keep it alive by swapping financial institutions to keep one step ahead of the DoJ, and the Feds finally caught up with them. Of course, online gambling will go away about the same time Cuban cigars do, lol.
Personally, i think the government is rather douche-baggy for stealing the players money like that ... saying it's "illegal gambling" only works for the US citizens, not for the British guy mentioned in the suit.
Personally, i think the government is rather douche-baggy for stealing the players money like that ... saying it's "illegal gambling" only works for the US citizens, not for the British guy mentioned in the suit.
It's a Ponzi scheme because the owners were taking money out of players' accounts for themselves. They relied on new money coming in to be able to cash out players that wanted to take money out. This is basically the definition of a Madoff style Ponzi scheme. Except in this case, there are poker winnings that increased players' account values, not investment returns.
bdc30
BoM May '11
I think you should go back and read the article again. :scratchhe
The government didn't steal the players money, the people running fulltilt did as skitalets has explained. In fact, when Pokerstars decided to stop allowing US players on their site, the government allowed them to pay out the players one last time, which they didn't have to do.
For one of the first times in the online poker fight, the government isn't the bad guy here.
njstone
BoM January 2010
How is that any different than how a bank operates? Obviously a bank has special licensees and insurance, etc., but a bank doesn't have enough cash on hand at any given time to cash everyone of their accounts out. I guess the differences is these guys were not a bank, lol.
The difference is that the bank is taking the cash from depositors to lend to borrowers, not simply pocketing it for themselves. Banks are also regulated (imperfectly, to be sure) to make sure they're keeping enough cash on hand, doing appropriate underwriting of loans, etc. Once lent, the cash is still "in" the bank in the sense that a borrower owes it to them. In a Ponzi scheme, the cash that's been withdrawn will never come back -- the schemer has spent it.
njstone
BoM January 2010
Yep. And I say again, how are banks not a ponzi scheme? lol, okay that's overstating it, but clearly our banking system needs help, as the past couple years (and over $20T of bailouts) has proven.
The difference is still that in a Ponzi scheme, the point is to steal your money. Banks only intend to use it temporarily then return it -- they pay you interest to hold it on deposit, and they earn the spread between the interest they pay you and the interest they collect on loans. It's entirely different from a Ponzi scheme.
I was pretty shocked by this, mostly on account of the big name players who are involved and have been involved.
I just hope this isn't the beginning of the end of online poker. I'd much rather see the government impose regulations than shut them down entirely. Keep 'em honest, protect the players, maybe even raise some tax revenue.
-Charles
I just hope this isn't the beginning of the end of online poker. I'd much rather see the government impose regulations than shut them down entirely. Keep 'em honest, protect the players, maybe even raise some tax revenue.
-Charles