Poker site accused of $440 million Ponzi scheme

[berniebrewer4life]

Full Tilt poker apparently was siphoning the winnings off to board members. Can't say I'm too shocked here.

 

http://money.cnn.com/2011...onzi/index.htm?hpt=hp_c1

[PrinceEatMeat]

Holy crap, that's crazy.

[Funketown]

What a surprise. An online gambling site is actually a scam.

[dadofandrew]

I don't think they're using the proper definition of ponzi scheme, as poker sites make their money from rake. I believe what is being said is they did not have proper reserves, and because of the gov't shutdown, were caught without enough cash on hand.

 

Now, is the reason they did not have the cash is because they were paying owners/founders/red pros a ton of money? Quite possibly. No excuses for that, as Poker Stars paid all Americans back every penny, including me. I have to think at some point, Tilt will say all would have been fine had they been able to continue to function and collect rake.

[RightFieldCoder]

Yeah, I didn't get the "Ponzi Scheme" angle. The government runs programs closer to a Ponzi Scheme than this place. Still a criminal organization that was paying out off too much cash, but not a Ponzi.

[bullox]

I have to think at some point, Tilt will say all would have been fine had they been able to continue to function and collect rake.

That was Madoff's plan as well. That's the problem with Ponzi schemes; the bigger they get, the harder they are to keep going. They all fall apart eventually.

[dadofandrew]

Well, if you collect enough rake, you make up all that paid out to folks. I think that was the idea. As I said, when they ran their big Sunday tourney each week, they charged $16 to enter, and usually had about 5K entrants...that's $80K. They had SNG's going nonstop, and others starting every few minutes, so they had cash coming in. Was it as much as investors/pros were getting? Maybe not. But, the way ponzi was used is not correct, at least how we see it.