Full tilt poker a ponzi scheme

Discussion in 'Gaming' started by droski, Sep 20, 2011.

  1. droski

    droski Super Moderator

  2. cotton

    cotton Super Moderator

  3. IP

    IP Grusader Knight Errant of the 8th Order

    So let me get this straight:

    Billy plays online poker. To do this, he has to "buy in" for, let's say 100 bucks. Virtually, he does well and his 100 bucks of chips turn into 300 bucks in chips. Billy does not receive that money on demand, but rather has to "wait" to get it, and even then only get it in payments? Is this right?

    If so, you'd have to be a dumb ass to put any large sum into this.
     
  4. cotton

    cotton Super Moderator

    I never heard of a single player having trouble getting paid by FTP before Black Friday. As far as I am aware, every cash out was paid on demand, in full until accounts were frozen. They were as reputable as you can be in online poker.
     
  5. droski

    droski Super Moderator

    the logic always was they make so much money anyway so why take the risk of losing your userbase by defrauding them? obviously we underestimated the greed of FTP. thankfully i don't bet online. i've been meaning to open an online sports betting account but haven't gotten around to it.
     
  6. IP

    IP Grusader Knight Errant of the 8th Order

    So then what's the scheme? Who were they taking advantage of?
     
  7. cotton

    cotton Super Moderator

    My guess is that their "float" wasn't big enough to handle a run on the bank. Your bank, for instance, doesn't hold enough cash in the vault to give money to every customer coming in to close their account on the same day. They estimate a reasonable level of liquidity and invest the rest. I'm sure the "bank" at FTP did the same thing, as did every casino, online or brick and mortar. When Black Friday happened, everybody wanted to close accounts. They weren't able to settle immediately.

    Now, if they mingled customer accounts with capital or paid them out for expenses, that is a more serious (and probably fraudulent) issue. Stars had the same problem with frozen accounts, but they were able, after some delay, to come up with enough liquidity to satisfy every cashout that I know about. FTP hasn't been able to do that, and it may be that customer accounts were comingled. I just don't know, and I doubt anybody else does, either. The nature of the gaming regulations pushed online sites into the dark underworld and onto obscure island nations, so there isn't good information available.
     
  8. droski

    droski Super Moderator

    essentially in a site like this there is a always a float of cash available because people keep active balances to bet and they were paying that float out to their investors (which is of course illegal). when the US demanded they return all money to US bettors they just didn't have the cash available to do it. as to why they did it. god knows. seems pretty stupid and something that will eventually get found out.

    (cotton beat me to it)
     
  9. IP

    IP Grusader Knight Errant of the 8th Order

    I don't understand why they would do that. They had a gold machine, and they [uck fay]ed it up.
     

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