Feds Call Full-Tilt Poker a 'Global Ponzi Scheme'

blair1q writes "Popular (and heavily advertised) poker website Full-Tilt Poker was sued today by the U.S. government, following an investigation that revealed it to be a massive Ponzi Scheme. The principals in the company set up a complicated system to direct funds from subscribers' poker accounts into their own bank accounts. This was in contravention of their own claim that users' money was untouched. Players' accounts amounted to $390 million, but the company only has $60 million in the bank, having over time distributed $440 million to its own directors and executives."

Comments

Casino Reserve

[rogueippacket]

Real casinos are not required to keep cash on hand for the full value of the chips they give players, and the reason is quite simple - the games are designed such that the casino will always make money! This is even more true in a virtual casino! Every once in a while, someone wins a lot of money, but it's usually at the expense of other players or nothing that can't be recovered in a day or two. However, now that the cat is out of the bag, a lot of players may end up trying to cash out at once.

So in other words is exactly like social security

[llZENll]

except for the fact that you don't go to jail if you choose not to play online poker.

Gotta Cover The Chips In Play

[cmholm]

It may seem like a fractional reserve banking system... to those that don't know how a regulated casino is managed. A legitimate casino will always hold sufficient cash to cover all of the chips in play. What ever chips the croupier wins from the players at the point the table closes... only then can the casino take the money to the bank.