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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."
Feds?
Maybe they should look into social security, medicare, Federal reserve and the entire government system first?
But they would certainly know it if they saw it.
You can't handle the truth.
I wonder if there is any precedent or international agreement that the US government has to abide by in order to get monies back to international players? Probably not. Can you imagine players begging the US for their money and us just saying "well, we'll have it to you as soon as we can." *years and years pass.*
...I suggest people think about this sort of thing. Not all businesses are scams, but the people raking in millions of dollars a year aren't earning it. Their inheriting it, winning it or stealing it, and they deserve to be taxed at a higher rate.
The CB App. What's your 20?
Of course, it's no worse than bit-coin.
Nice to see they've taken care of all of those other problems, so now they can go after online poker sites.
No boom today. Boom tomorrow. There's always a boom tomorrow. - Cmdr. Susan Ivanova
Feds declare online poker illegal. And seize all funds used by payment processors to pay American citizens. And then declare it to be a ponzi because it is now underwater by the amount they stole (seized).
The government hates competition.
Why aren't they going after the banks for the exact same thing.
Banks don't have cash on hand to pay every account holder should they all choose to cash out their accounts.
Ian Ameline
And here we have an example of why dumb regulations make everyone suffer. The poker market basically consists of 4 major companies- PokerStars, Full Tilt Poker, Ultimate Bet/Absolute Poker, and Cake Poker. Together they control 90% of the market, charge huge fees (rake - a high stakes pro friend of mine earned $100k last year and paid $50k in rake to the sites), are marred by scandals and have crappy software that is years old with terrible security flaws (like using xor encryption for traffic).
There's a market for an online poker site, but because of shoddy laws regulating a game of skill between consenting parties, it is near impossible to setup a poker site. We were going to do this before by making a bitcoin poker site but the lawyer wanted a $20 million retainer. The scandals are due to the huge initial cost to opening a poker site that enables these 4 sites to retain a cartel with artificially high prices in the poker world.
Don't blame the bazaar. Blame the regulations on your social life and freedom to choose how to spend your cash.
And this is why we need bitcoin. All hail the bitcoin and the wonderous things people will create. Imagine all those people playing counterstrike or World of Warcraft all day long for nothing. Now imagine is they could compete with each other for cash. A new digital economy with professional video game players. Or imagine funding your favourite free software projects, artists or Wikileaks.
Online poker is illegal in a lot of countries so these sites operate outside the law. They have done questionable things before although not on this scale. But this shouldn't be a surprise to anyone, my friends who play on Fulltilt and similar sites withdraw their winnings regularly and only keep in enough money to play with exacly for this reason.
Anyone who played poker towards the End (April 15th) had to know the danger, withdrawals were sometimes taking months, checks were bouncing...the writing was on the wall. The fact that FTP didn't have the funds to pay everyone off when the government seized their domain name (as well as numerous payment processor seizures leading up to the shutdown costing them millions) does not make them a Ponzi scheme; it means they were operating on belief that money would continue to come in, just like many "legitmate" businesses. When a company goes bankrupt they line up and hope to get paid from what's left, unfortunately for those of us who lost money, Uncle Sam seized it. If they truly feel this is a Ponzi scheme then why don't they take all the seized money, including the payment processor money, and pay us "victims" back with it?
Does this mean that they won't hassle foreign gambling site operators, and imprision them?
This seems like the pot calling the kettle black to me....what do you think...IE the FED
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.
Banks do the exact same crap which is why we are in this mess.
It's only okay for Goldman Sachs to do this.
Capital gains is NOT the same as income tax. You are comparing apples and oranges. If you want to compare apples to apples, look at capital gains PLUS corporate income tax. It amounts to over 50%, except for companies that are in bed with the white house (GE).
That you have a normal job paying a taxable wage (you may not, actually.)
That you actually do anything to earn money off of your money (you may not do a whole lot other than make sure it is in a profitable investment.)
This isn't aimed at people that have a full time jobs and 'invest full time'. This is aiming at people that their whole 'income' is basically just living off their fat amounts of money, making more money than they can spend easily.
No! It's a *SIG*. Keep the Special Interest Groups away! (Con joke!)
Ponzi Scheme has become a blanket term when it's a very specific type of fraud. What they were doing is embezzlement and the practice predates Ponzi Schemes. A Ponzi Scheme is where I take investments from say a 100 people a year and I use money from the second hundred to pay the first hundred. They tend to pyramid and collapse when people decide they want to take their money out. The longer lived ones survive by paying insane interest rates so people are afraid to pull out their money and actually encourage friends to "get in on the deal". Siphoning out the money is clearly embezzlement and not a Ponzi Scheme.
Banks don't have cash on hand to pay every account holder should they all choose to cash out their accounts.
They don't have enough cash to pay every account holder if they came in to collect on same day. They do, however, have enough assets and accounts receivable (outstanding loans) to cover. It may take some time but, they could, in principle pay off all their account holders.
Full Tilt, on the other hand, doesn't have the money in any form. What they owe to their subscribers can not be paid. The money isn't on loan to another entity who is obligated to pay it back. It is "spent". That's a big difference.
But the bank (if it's solvent) has assets, ie Loans, that exceed the value of its obligations to depositors. Your complaint is that the bank cannot convert that long-term stream of payments into cash should all of its depositors simultaneously withdraw everything from their accounts. Full-Tilt-Poker, on the other hand, does not (apparently) have any assets to cover the obligations to its players.
Looks like Full-Tilt will need a bailout!
I posted in past discussions of on-line power about the absurd number of ways that players could and would be cheated, but was always modded down and responded to with stuff like They have no need to cheat or steal, they get a cut of each game and would never risk that". So no pity for those taken who stupidly believed it just couldn't happen. And I'll be going to a casino in either Atlantic City or Pittsburgh in the next few week, so if any of you have money that you can no longer gamble in on-line poker please let me know, I'll play roulette for you; send me the money and let me know how you want it bet and I'll tell you later if you won or not.
I'm an American. I love this country and the freedoms that we used to have.
Sounds just like the fractional reserve banking system...
Yeah, and so the pizza delivery guy shouldn't have to pay taxes because the money I use to buy the pizza has already been taxed before I use it to buy the pizza.
You're conflating capital-gains / earned-income / wealth / job-creation.
They aren't the same. I can invest money in a publicly traded company that opens an office in China and hires Chinese workers. How does that help jobs in the USofA? How does that get people earning money by their labor in the USofA?
Social security isn't a ponzi scheme, its just the victim of the United State's own success and radical advancements in medicine and thus life expectancy. The life expectancy in the US in 1935 was 58, in 2000 it was 74. The initial planners probably just didn't expect the majority of people to live long enough to collect. I guess that's gambling, but making it out to be ponzi scheme I think is an incorrect assessment. It looks like the retirement age started out with SS at 65 or 62 at half pay or whatever. But the life expectancy increased past that dramatically after World War II, especially with women. So for the past 60 years now, we've had the average life expectancy greater than that of the retirement age, and probably social security didn't plan properly for that. I'm just looking at the numbers though, so it might be more or less than that.
LB is confusing personal tax liability of capital gains with the double taxation of corporate earnings. Or to put another way - He's mixing two different issues: capital gains taxes and the double taxation of corporate earnings.
Know when to Fold Em.
If you don't know who mark is at the poker table, you are it.
I tend to be more "in your face" type of guy, but can see your approach working better! ;)
To stay on topic, "US books are open" -- which books? Certainly not Federal Reserve Bank books, or why would it take Bloomberg a lawsuit to see *some* of dirty little dealing which were going on, like "shadow TARP" (http://www.politico.com/news/stories/0811/62358.html), and why original version of H.R. 1207 was never passed, again? ;)
For the record, if what prosecutors are alleging that poker company was doing is true, I fully support going after them for fraud -- but, I would still not call *them* running Ponzi scheme, unless they were letting new "investors" in and paying them with money siphoned from old "investors", or were operating some kind of "poker-playing coop" and promised "guaranteed" gains -- crazy idea, is not it? :) Otherwise, garden variety embezzlement...
But, knowing gov't attitude towards gambling sites, I would take what they are saying with a grain of salt, until proven otherwise.
Paul B.
As is my pay. As is every dollar in my wallet. The taxes have been paid.
And once I have paid the taxes on my income, what is "left over *belongs*" to me.
Therefore, the taxes have been paid and the pizza delivery guy does NOT owe any taxes (by your logic) on the money I pay him.
No. I understand it. Again, you are the one incorrectly conflating:
capital gains
earned income
wealth
job creation
but they are NOT the same.
except for the fact that you don't go to jail if you choose not to play online poker.
http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2011cv02564/377900/49/1.pdf
How is this different from fractional reserve banking? Oh, it's OK when *you* do it? I see.
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.
Luke, help me take this mask off
At least you got that partially right.
Yes it is "exchanging hands a second time". It is a asset of the company's. It is NOT an asset of yours until the company pays a dividend (and is taxed).
You are a stockholder. That is all. That gives you certain rights in certain situations but that does NOT mean that a portion of the profit that the company makes is yours.
Here's a simple experiment to prove that. Buy stock in Microsoft and then go there and demand x% of their profits as your right by stock ownership.
Yes, just instead of holding your money in the forms of legitimate investments, they are holding your money in their wallets.
This site seems legit, let's give them our money!
The FEDs must be using some of that "Obama" math to make their case.
>> So in other words is exactly like social security, except for the fact that you don't go to jail if you choose not to play online poker.
That's cute, and completely inaccurate.
Any retirement investment method is counting on the gradual growth of the value its investments over time. Most methods assume investment into activities that will result in value-added business from which surplus value can be extracted. Since any one investment has a risk of either under-performing or going completely tits-up, risk is managed by making a diverse group of investments.
The US Federal Government is "invested" in the prosperity of the US. Social Security is therefore diversified over an entire national economy, recovering taxes from a range of activities. The advantages of this "ultimate index fund" are low administrative overhead and risk.
Both private and public retirement plans are predicated on the assumption that there is long term growth in the investments, the basis for the continued function of a modern market economy. If/when this isn't the case, the paradigm falls apart, and members of a cash economy would need to salt away the entire value needed to provide for their post-earning years.
Luke, help me take this mask off
Then do it. Wait, there's going to be some caveat to that statement, isn't there?
And now you cannot tell the different between DIVIDENDS and capital gains from selling stock.
You lose.
For a comparison, I own the money in my bank account. I OWN it. It is mine.
When I go to the bank and say I want $X from my account, they give it to me.
You do NOT own any of the profit that the company makes OTHERWISE you could go and claim it from the company.
I'll expand my earlier statement about the things you are incorrectly conflating:
capital gains
earned income
wealth
job creation
THE STOCK MARKET
and DIVIDENDS.
What a dumb comment. Social security is no more than a special tax to support old people. It is not an "investment" or "account" for your own money that you will get back.
Of course you don't. As I said, you are incorrectly conflating:
capital gains
earned income
wealth
job creation
THE STOCK MARKET
and DIVIDENDS.
If you really owned part of the company's profit then you could go into the company and take the portion of the profit that you own.
You failed to understand that concept and instead you switched to a tangent about selling stock.
Selling stock is NOT the same as taking a portion of the company's profit (that you claim you own). But feel free to keep arguing that it is.
Here is what you posted:
Damned by your own posting. Looks like you lose ... again!
No, it's not an account, however your lifetime payment into the system is recorded and used to calculate your payments.
If you live longer than 75, you will get more money out of social security than you put into it. So while technically true, you do in fact get your money back (and more) so long as the government keeps running it.
The fact is, the government was borrowing from the social security fund for decades, and never paid that money back. If you were to take that money into account, then social security would have no crisis.
Even so, that crisis is short lived. As the boomers die off, the fund will re-stabilize.
If you need web hosting, you could do worse than here
Consider these sites can close player's account at any time, without an explanation. Back in 2006 when UIGEA weren't enacted yet, some of my friends lost tens of thousands of dollars from account being frozen due to "management decision", with no chance of appeal.
Now we finally see some possibility to regulate the industry. But before full legalization can happen, there are previous scores that need to be settle first.
New Economic Perspectives
> accounts amounted to $390 million, but the company only has $60 million in the bank
So then Full Tilt Poker is just like a major US bank, except with more reserves.
Except you were claiming that a portion of their profit was YOUR money because you were an investor.
So when you got some of that profit, it had already been taxed and you should not have to pay taxes on it.
So unless you're now trying to claim that you were talking about stock sales the whole time (which have NOTHING to do with corporate profits as you would know if you understood this) and just managed to use the completely incorrect terminology ...
What was that I've been saying? Oh yeah! It was that you are incorrectly conflating:
capital gains
earned income
wealth
job creation
THE STOCK MARKET
and DIVIDENDS.
Company profit is NOT owed you via increased stock prices. Do NOT try to conflate those items.
But keep posting. This is turning into an excellent educational thread for anyone else claiming "double taxation".
I'll go "All In".
Beware of Sales Reps bearing gifts.
US books are open. Private companies' books are not. Definition of Ponzi scheme involves fraud; how can you have fraud when the books are open? Perry and other illiterates are not questioning the values in the books; therefore Social Security is not a Ponzi Scheme. Any questions?
Social Security is not a ponzi scheme but Congress may be running it like one.
The fraud is that money is collected for one purpose but spent for another. For example when the boomers were in their working years the social security surplus was spent by Congress elsewhere. Congress left IOUs. If those IOUs are not somehow paid back then there was fraud. Given that the only solutions being proposed for upcoming shortfalls is to collect more revenue or to reduce benefits the "run like ponzi scheme" meme is plausible.
A ponzi schema is taking the money from new entrants to pay out the old timers.
Poker is taking the money from losers and giving it to the winners.
And in a ponzi schema the old timers are the only ones who make money. So they are the winners, ergo the new entrants are the losers
Therefore poker is a ponzi scheme,
next.
"Oh, you hate your job? There's a support group for that, it's called everyone, they meet at the bar."
The social security trust accounts for $2.5 trillion of the national debt. They will probably need to raise taxes down the road to pay for it.
The US attempt to ban Internet poker has already cost the taxpayers tens of billions of dollars. Why don't they give it a fucking rest already?
Do you really think that if I sold some IBM stock that IBM would get any of the money?
Wasn't that what you were talking about? You selling stock to get money that was "double taxed"?
Keep it going! This is GREAT!
No. Stock sold to stockholder A by stockholder B does NOT do ANYTHING for the corporate profits.
Allow me to continue repeating the items that you are incorrectly conflating:
capital gains
earned income
wealth
job creation
THE STOCK MARKET
and DIVIDENDS.
Again, you are wrong. For an example of how wrong you are, look at LinkedIn's IPO.
But that is just another irrelevant tangent from you. Your ORIGINAL claim was about being "double taxed".
Well you had CLAIMED it was about being "double taxed". But you keep conflating different items.
Except you keep trying to incorrectly conflate them by talking about being "double taxed" and then claiming that you can sell stock and then trying to imply that the stock you sold increased the company's profits.
No I did not.
Probably because I understand that the stock price is set by buyers and sellers and fluctuates throughout the trading day.
Looks like I found something else you didn't know but were willing to try to claim that you did.
Not true. Social Security is currently still in the black. You're trying to conflate projected debt with actual debt. The social Security Trust is, as of this moment, still an asset.
If you need web hosting, you could do worse than here
Yes, just instead of holding your money in the forms of legitimate investments, they are holding your money in their wallets.
...and refusing to give it to you when they say they will.
This is a hacked account, for which the owner can not be held responsible.
can you please cite a source? your word as a slashdot
registered pundit doesn't count.
Yes, people lie about all kinds of things are Ponzi schemes when they don't like it in the first place.
Enjoy your old age in a carboard box, asshole.
The social security trust fund is money owed to Social Security by the federal government. What is an asset to the creditor is a liability to the debtor.
Sorry, I misinterpreted what you were saying.
Yes, the trust fund is huge. And yes, they will hve to raise taxes to pay it back. The point is that you can't look at social security on a per year basis and say "Oh, this year they're taking in less money than they're paying out, social security is bankrupt!". That ignores the money that SS is owed.
If you need web hosting, you could do worse than here
is a social trust
it says that we do not want our older generations, and, by reference, our older selves, to die in the street
anxiety over how the system actually works financially is a red herring: it doesn't matter how it works. what matters is that you agree it is wrong that our older people should suffer because the society they live in is callous and brutal. once you agree that such a callous society does not represent the sort of society that shares your values, there is no anxiety about how it works financially. you just agree it is supposed to work and should therefore be funded
i have no problem with people who complain about the details of how social security works, or what it should fund and what it should not fund
i have a problem with those who use their lack of trust and anxiety as a cover for doubting the entire legitimacy of social security itself
if such people prevail on the national debate over this and other related issues, the united states is doomed to second class or third class status in the world, and our best and brightest children and grandchildren will surely leave for wiser and more humane societies that actually cares about its citizens' well being. those who are left will lead brutal lives, due to the opinions of people like you see posting here, and, for some reason, loudly and proudly trumpeting their inhumanity on the political stage without apparent shame or self-awareness about what callous and ugly people they are. whatever they are, they aren't americans and they don't represent american values as far as this american and the majority of americans are concerned
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
I think this is actually the same 'scheme' that all the banks and companies have done with their directors for a very very lon gtime ... I think it is called 'free market' or even better 'land of oportunities' :)
SS is basically like a typical standard financial product: a fixed annuity with insurance premiums.
You pay the "premiums" which is part funding the annuity and part funding an insurance policy. If you get disabled or die, you (or your heirs) get the insurance payout, if you get to retirement, you get the annuity value. This is why you don't get back more than you pay in (adjusted for inflation).
The things that makes this different than a typical fixed annuity, is that instead of a bank, it's the government. Instead of investing in things that might generate a return greater than the inflation rate, it just invests in US treasury bonds. This is pretty much a guarantee of a low rate of return.
The real problem with SS isn't that its a fixed annuity + insurance product. The real problem with SS is that it isn't totally funded as the promised benefits cannot be paid out with the projected future premium stream. If this event were to happen with a "real" standard financial product, the issuer would stop selling that product, figure out a new annuity product that would "work" and start selling it instead. Maybe this new product would have a higher retirement age based on new annuity tables, lower benefits, or whatever.
The problem with SS is that the US government (or by extension, the "people") refuse to close the current product and create a new product that has real annuity-like properties (as opposed to looking more like a pyramid scheme, not a ponzi scheme).
Politics is preventing discontinuing the current product and creating a new more viable product, but in reality if SS was a product sold by a company, I'll be the Feds would eventually shut it down as it is looking more and more like a pyramid scheme.
By going after these ponzi schemes, the U.S. government might be able to actually fund social security.
Oh my god who would have ever thought that online poker sites could be anything less than one hundred percent trustworthy this is an outrage etc.
In Europe, taxes are much higher. Then again, a lot of things are cheaper or free, because of government subsidization. You could argue you don't want your government to force you to pay taxes for things you are not using at that moment, but there are a lot less poverty and a lot less insanely rich, mostly because of this. Taxes can be used successfully to distribute wealth easier, even if you have an inefficient government doing the distribution.
I was promised a flying car. Where is my flying car?
If the owner was running a scam then he deserves to be caught. My own opinion is the finances would have been a lot more transparent if there wasn't a US ban on online gambling. If the ban wasn't there there would be no reason to set up fake florists and other companies worldwide to handle payment processing from US gamers. Of course they shouldn't have been trying to attract US players in the first place but I'm guessing the financial reward to do so plus the fact their operations were outside the US meant they thought they could get away with it.
they are just trying to protect US casinos from being destroyed by online casinos, which still will happen. The casino lobbyists seem quite effective so far.
SS is basically like a typical standard financial product: a fixed annuity with insurance premiums.
- they called it premiums to make it LOOK like an insurance program, but those were NEVER premiums.
The gov't had to argue specifically that SS taxes were NOT premiums, were not earmarked for any specific purpose and there was not fund, they had to argue this in front of SCOTUS, who unfortunately was just a puppet in the hands of the government.
So I give this case as an example, and the important part of the ruling is there
(http://slashdot.org/comments.pl?sid=2437746&cid=37462432)
SS is unconstitutional, it's funded like a ponzi scam and it never had any trust fund by government argument that was used to pass it.
it just invests in US treasury bonds. This is pretty much a guarantee of a low rate of return.
- bonds are a guarantee that you will have inflation destroy your investment, because USA prints money and is not on any gold standard, so US debt is worthless because US Federal reserve note is worthless.
And saying that t-bills are investment?
It's like writing an check to yourself for a million dollars and saying you are a 'millionaire', but you are not. That check is an asset and a liability at the same time. And it transfers the payment from you to the next generation (what a way to SCREW YOUR CHILDREN.)
You can't handle the truth.
Not enough money to cover deposits. Highly paid executives. The only difference is that it is the depositors gambling with the money NOT the compnay.
Sig (appended to the end of comments you post, 120 chars)
By this definition JP Morgan, Goldman and the rest should be shut down
See http://maxkeiser.com/2011/09/21/by-this-definition-jp-morgan-goldman-and-the-rest-should-be-shut-down/
If only Full Tilt Poker were incorporated as a bank, they'd be okay:
http://en.wikipedia.org/wiki/Fractional_reserve_banking
-=/\- Jizzbug -/\=-
I find it mildly amusing that, from the stories I read: ...and now the US government accuses THEM of a ponzi scheme? Gee, I wonder why they had financial shortfalls... (not to say that fulltilt's management didn't screw up - they probably did, but not to the extent they are being accused).
- The US government has been seizing fulltilt funds for some time prior to Black Friday (something that fulltilt just worked through)
- The US government shut down their payment processors, so for a long time, it was impossible for Fulltilt to access player accounts for deposits. Fulltilt made the questionable of just crediting players the money they "deposited" thinking they'd get the money later. They were in the process of collecting (though they not were nowhere near finished) when black friday hit and they were shut down completely.
- The agreement they were forced to sign with the US gov in order to get their domain name back after Black Friday, basically means they cannot go after funds US players owe them as I understand it.
That's some nerve... *cough*social security*cough*
Again, allow me to reiterate the things you are incorrectly conflating:
capital gains
earned income
wealth
job creation
the stock market
dividends
BASEBALL
and TAXES.
You had claimed that you were being "double taxed" on corporate profits that you received that had already been taxed.
Now you're conflating that with a baseball. Another weird tangent from you.
Then you went on about how stock price is linked to corporate profits. When I showed you a company with a high stock price and NO PROFITS you claimed it you were talking about some kind of possibly expected future profits (but not actual profits that can be identified today).
Again, another weird tangent from you that has NOTHING to do with your ORIGINAL claim of being "double taxed". Or baseball.
If it really is your money then you can go in and take it.
Since you cannot, it is not your money.
Therefore, when you do receive it, it will be taxed.
Um isn't this exactly what banks do?
They take in say 300 Million, but only hold onto say 50 Million, and then get to play the stock market with the other 250 Million?
I thought this was standard operating procedure for businesses?
As I understand, at least with banks, there is regulation to say how much you have to actually keep, and with deregulation that ratio got so low, that they were playing with like 297 Million and only keeping 3 Million in reserve, so when things went south, they really went south.
Anyway, I know they aren't a bank, maybe that's the problem.
But there's still some fishy business going on from the owners of the site. If you read some similar articles online, you'll see that the real problem here is the distribution of the money from the site to the owners or shareholders. Furst received 12 million. Lederer received 38 million. Ferguson received 24 million, and so on. Full Tilt's defense in this whole thing is "In a statement in August, Full Tilt acknowledged that it was having problems processing player money and said it lost $115 million to government seizure and $42 million it says was stolen by a third-party payment processor. (Taken from a WSJ article with some more details)
Well that's fine, but what about the other 200 million of player funds - where did that go? If the government did in fact seize over 115 million dollars, then they might have a legitimate excuse here - but only for that portion of the missing money. In this case, they should still have 275 million in the bank at a minimum, to account for 390 million in player funds - correct? If the payment processor actually scammed them out of 42 million, then it shouldn't be coming out the pockets of the player money, it should be returned from the shareholder / owner proceeds. The numbers just don't add up - even if you take the government seizure out of the equation there's still too much unaccounted for.
Maybe this wasn't always intended as a ponzi scheme - the guys that started the site had the intention of setting up a legitimate site. The government started cracking down and seizing money - so maybe the owners decided to grab a big chuck of the player money and siphon it off to themselves before the government got the rest. Maybe the 390 million in player assets include hundreds of millions of the equivalent of counterfeit money - Full Tilt dollars created without any real dollars going into the bank accounts (by the owners, or programmers). Either way, the people getting screwed here aren't getting it as a result of the government, there's a lot of malicious accounting and action taken by Full Tilt here.
Global warming and other natural disasters are a direct effect of the shrinking number of pirates - Gospel of the FSM
One thing they are failing to remember is that there is a rake taken almost every hand/tournament entry. Nearing 10% of tournaments entered or hands played (for cash games). They don't need cash on hand like someone said except for the money in play that can be extracted. My guess is that the bankrolls of players is around $60 million and the rest (that has slowly trickled to the business owners) is the profits from the RAKE!! Its not that difficult to understand, someone missed this completely with these charges/summary. But then again it is slashdot and why not try to mislead the readers a little bit. Not as bad as the US government trying to get their hand into online poker through legal punishment.