For years, online poker players (yours truly included) have been saying that the Absolute and UB scandals were anomalies and that we can put our trust in the bigger sites.
"There's no profit in them stealing our money. They can make plenty of money off the rake."
"This is poker, they're word is what they have, if they were to cheat us, they'd lose everything."
Well as it turns out, there are even less companies to trust. Apparently there is profit in stealing from poker players... Profit, to the tune of $300,000,000 (or $400,000,000 in distributions to owners). Oops.
As many of you know, the Southern District of New York has amended their original complaint against FTP, what is known as Black Friday in the online world. Wicked Chops Poker has a good breakdown of the highlights.
- As of March 31, 2011, Tilt owed players from around the world over approximately $390,695,788 but had only approximately $59,579,413 in its bank accounts. (page 72)
- Howard Lederer received approximately $37M in distributions as well as another $4M in profit sharing (page 72).
- Chris Ferguson received approximately $25M in distributions. (page 72)
- Rafe Furst received approximately $11.7M. (page 73)
- In all, it claims there are 19 owners of Full Tilt Poker. (page 73)
- An owner, named as “Player owner 1″ but clearly Phil Ivey, is alleged to have received at least $40M in distributions, “as well millions of dollars characterized as loans,” of which $4.4 million have not been repaid. (page 73)
- On that note, interestingly no other Full Tilt Poker owners where named in the amendment.
- Owners continued to receive approximately $10M/month even though beginning in the summer of 2010, management/the board of directors were aware of issues in collecting funds from U.S. players. (page 73)
- Approximately $130M in U.S. player funds were never collected due to payment processing issues. (page 74)
- The amendment claims that Tilt was “extremely insolvent” by March 2010, however owner distribution payments continued as late as April 1, 2011. (page 74)
- After 4/15, Tilt continued to accept funds although it had worldwide liabilities of over $300M. (page 75)
- In an internal e-mail on June 12, 2011, Ray Bitar expressed concern that a company announcement regarding lay-offs and the Board (including himself) being replaced would be seen as bad news (which we find unbelievable–as most would’ve considered it great news), which in turn would cause a “new run on the bank,” adding that “it could be a huge run” and that “at this point we can’t even take a five million run.” (page 75)
- Any property, including money, used in [an illegal gambling business] may be
seized and forfeited to the United States–or better put–the accounts assets of Howard Lederer, Chris Ferguson, Ray Bitar, and Rafe Furst would be gonzo. (page 77) - Also, ownership percentages for the four Board members were listed as Ferguson (19.2%), Lederer (8.6%), Bitar (7.8%), and Furst (2.6%).
They are calling it a Ponzi Scheme. While there are those that are going to show, "LOOK! AT THIS! THIS WOULD NOT HAVE HAPPENED IF IT WERE REGULATED!" I think this will put a huge delay into any kind of regulated online poker. It is going to scare the casual players away from playing anywhere. They're not going to see it as an issue of regulation vs the Wild West. They're going to see it as more evidence that these companies are just going to steal from you and that they should stay away.
With Full Tilt added to the list of untrustworthy poker sites, it starts to make you wonder, how clean is Pokerstars' closet?
-My name is Unimpressed, and I'm an donkaholic.
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