Quote:
Originally Posted by bbfg
Everyone defending Lederen & Ferguson & other board members of FTP and blaming everything on Bitar:
Do you agree with the notion that a key point of running a healthy poker or betting site should have very strict procedures on what to do with money deposited on the site?
If yes, how can you possibly think that Lederer & Ferguson are relatively blameless?
I find it incredibly hard to believe that these procedures were in place and that they were "fooled" by Bitar, given the size of the gap between customer deposits & money on hand (I don't remember the numbers, but it was huge).
If these procedures are not in place, any poker site is running on a business model that is consistently exposed to liquidity issues. If at any time there is a liquidity problem that is visible to clients, the company is probably done for.
The only argument you could make is that the board members were idiots that did not realize this. But I do not think that is a likely scenario. Especially since FTP was not a tiny company, it likely had senior executives in charge of financial & risk management.
I only see 2 realistic scenarios:
1/ Either Bitar was a genius criminal surrounded by a combination of accomplices and idiots. Your pick who the accomplices & idiots were.
2/ FTP was deliberately run & managed in a highly irresponsible manner, with the only potential outcome being failure/bankruptcy at some point.
And from everything we know 1/ just seems highly unlikely.
yeah i mean any high growth internet business is basically going to operate the same way. This is a subscriber acquisition cost business. Spend huge dollars on marketing to grow your player pool who will return to the site over time and have a lifetime value that exceeds their acquisition cost. Stars operates the same way, as does DraftKings, TripAdvisor, SnapChat, whatever. In this case, they got clocked with a huge regulatory enforcement right as they were hitting their stride on user growth and had no financial ability at that time to withstand a liquidity freeze. You can fault them for it if you want, but without operating this way we probably never would have had a poker boom in the first place since the sites would not have had the capital to invest in marketing and grow their platforms beyond a few thousand loyalists. Cash is fungible guys, that's the bottom line. There isn't a black box of "player deposits" and an operating account. Stars (when it was still Amaya) management told me that only 2% of their players ever make a withdrawal from the site. If you're not using that pool of capital given that kind of win rate than you ARE running your business recklessly. You want them to float a bond and pay 7% interest when they have all the cash they need sitting in "float" from player deposits?
I genuinely feel bad for the founders/RedPros/etc. They probably thought they were worth hundreds of millions at one point and that evaporated after BF. Oh well, tough luck, must've been a fun ride. Rough business model when you have no control over the political/regulatory regime you operate under. This is why Sheldon Adelson's business is so far superior, because that guy will never get caught flat footed on a regulatory change...