Quote:
Originally Posted by Gzesh
Could not disagree more, with pretty much everything you wrote.
The ship should not have been difficult to sterr, they just did not bother to run it honestly and looted the assets.
The online poker business model was NOT really complex. It was really very simple to NOT take money out when the business could not cover player liabiiity for one example. Similarly, it was really pretty simple to NOT manufacture uncovered liabilities by failing to process deposits upon receipt.
(Besides, why do you think Ferguson's only skill was poker ?)
As much as I will never forgive them, saying running an online poker site was not complex simply isn't true. Let me frame the situation those two guys found themselves in:
They committed to a business model that was US-focused, entered contracts, and hired hundreds of people on the incorrect assumption that the market would remain gray and therefore highly profitable.
In the months leading up to Black Friday, the money inflow was severely restricted but it seemed potentially temporary. At that point, you have a choice:
1) Do what they did - trust that eventually the deposits will be processed and the party keeps going. Liquidity on the site carries on and growth continues. Remember, there had been many past processing issues of a similar nature that had been resolved and you don't know Black Friday is coming.
or
2) Decide you can't risk that temporary hold being permanent, and you cut expenses only to what you can confirm received funds for. This annihilates your site liquidity, and you start to eliminate promotions and do massive layoffs as well as of course eliminating all distributions to the board. With site liquidity and promotions gone, the site starts circling down fast, meaning more cuts and eliminations, and fairly quickly, you're out of business or irrelevant.
Sure, there's some sort of middle ground (eg, carry on the liquidity, eliminate distributions, do some amount of layoffs but not the full amount you need, cut promotional budgets but not eliminate them) but essentially those are your choices.
From an ethical perspective, the choice is clear. From the real world? Maybe not. It's certainly not a simple question.