Originally Posted by repulse
... Also, in the current deal, ... the DOJ was allegedly interested in making sure that it didn't sign on to a deal that wouldn't repay ROW players, which implies that they would want the same type of fair repayment for the US players as well.
I don't think this conclusion follows logically at all. The DoJ doesn't care about what is "fair" as much as what is legal. The DoJ recognizes that there was no legal impediment to FTP providing play to ROW players. Therefore it believes that the results of play are what legally drives payouts to ROW players. However, it alleges that it was illegal for FTP to provide play in the US. This could lead them to believe that it would not make legal sense to recognize the outcome of this illegal activity as a basis for remission to US players.
Given the alleged fraud, poker players at FTP are analgous to investors in a Ponzi scheme. Indeed the DoJ seems to have regarded them as such in some of their public comments. Investors who appear to be winners in a Ponzi scheme do not necessarily get to keep their winnings. They may be subject to clawback. This is because their payouts were not based on actual investment gains. The DoJ may be reluctant to recognize the results of illegally offered poker games as actual wins and losses.
The DoJ will not be motivated by what (winning) poker players see as a fair outcome. They will make a choice which they believe is most consistent with the law.
Originally Posted by repulse
Paying based on deposits would leave many Americans having been better off (or worse off) if they had left the country shortly after Black Friday, which seems like it could cause pretty bad PR.
And a ROW player who moved to the US shortly before or after BF may be worse off than one who didn't.
PR is not going to matter much in the selection of payoff criteria. The AFMLS is not directly subject to election. Public opinion of gambling in the US is so deeply divided, and this issue is of such little importance to the average voter, that electoral or PR concerns are unlikley to affect the decision.
Originally Posted by repulse
I agree it could go either way, I still think a scheme based on deposits is very unlikely but not impossible. I do think it would be a tremendous injustice and have serious implications on the poker world.
A remission scheme pro-rated on net deposits would be most consitent with treatement of Ponzi scemes, would be consistent with the DoJ refusing to recognize the results of allegedly illegal gambling operations, and would return the most dollars to US players. It also would be arguably fairer than remitting balances less winnings. What it wouldn't do is recognize the results of play by US players. I'm not so sure it would be unjust to refuse to recognize the outcomes of games it was illegal to offer.
As to the likelyhood of any specific approach, I would agree that, to this community, it has looked most likely that balances would be the basis for remission. The way remission was handled in the Bet On Sports case would also seem to indicate that the DoJ has been prepared to use balances as the basis for remission in the past. I don't know enough of the particulars of that case to understand how applicable it would be to the FTP case.
People will argue that the fact that the DoJ allowed Stars to repay US players based on balances is a further indication that FTP's US players will also be compensated based on balances. I'm not sure this follows. There are signifcant differences between the two cases:
- Stars paid Stars' US players. Stars/FTP will not be paying FTP's US players, the DoJ will. What Stars would be willing to recognize as owing will be diven by different principles than what the DoJ may recognize as owing.
- Star's US players were paid amounts that they and Stars agreed were amounts owing by Stars to the players. FTP's US players will be paid compensation for losses suffered by victims of fraud. What the fraud allegedly did was to persuade victims to deposit and/or keep funds on FTP. A victim who was not fraudulently induced to deposit on FTP would not have lost or won any money in poker games on FTP. Hence, it was their deposits they lost due to the fraud, not their balances. Once one accepts that the deposits were fraudulently obtained, what notionally happened to the funds after the deposit (as part of the fraud) may be no more relevent to the amount remitted than the fictional gains in investments in a Ponzi scheme*. Nobody has alleged that Stars defrauded players. Hence there is no reason to regard deposits as being what Stars players had lost (before the refunds).
The allegation of a Ponzi scheme in the FTP case is also a significant distinction from the Bet On Sports case. AFAIK, nobody alleged that BOS was deceiving players into depositing. The allegation was merely that BOS was operating gambling illegally. As such, basing remission on balances seems reasonable. If the DoJ is providing remission to FTP players on the basis of those players having been defrauded of their deposits, it would seem to make more sense to base remission on the deposits, rather than on the balances.
Essentially, the complication regarding remission in the FTP case is that what most players consider themselves to have lost is not the amount of which they were allegedly defrauded, but rather the amount which they thought was the balance of their account - which, for any individual, could be significantly more or less than the amount of the alleged fraud. Is this significantly different from a Ponzi victim who was told his fictional investment made a 15% return thinking he was owed more than a Ponzi viticm who was told that his fictional investment lost 15%?
A further complication is that it is entirely possible that some of their deposits were not originally fraudulently obtained. IF FTP wasn't a Ponzi scheme all along, then the amount of the fraud may be balances as of the date it became a Ponzi scheme, plus net deposits after that date.
*I'll go farther than that. When a Ponzi victim makes withdrawls that are larger than his total deposits, he may be subject to clawback of any amount over the deposits. He is not entitled to keep gains, even if the deposited money did make some positive return while deposited. In a Ponzi scheme, neither fictional nor actual
gains or losses made on an individual's contributions after they are deposited affect the amount of compensation the victim may subsequently receive, except as it affects the total amount of funds available to compensate all victims. Therefore, despite the fact that there were actual poker games played in which FTP players won and lost, those wins and losses may not affect the basis of compensation.