Quote:
Originally Posted by 5thStreet
It reminded of the sort of stuff that went on in the .com boom, when people with skills that allowed them to take advantage of time-specific opportunities- but otherwise utterly incapable of handling a large enterprise- suddenly found themselves in charge of something that vastly exceeded their capabilities to manage. In the best cases, private equity stepped in, installed the needed grown-ups and it succeeded (or cases like Google where Page/Brin brought on Eric Schmidt, acknowledging their own limitations), but if left founder-managed, usually went to **** once they had to make decisions on things that exceeded their expertise.
All due respect to poker players, but it takes a special sort of hubris to think that a bunch of people who've never managed a large enterprise and whose only real skill was poker would be capable of managing a large, complex enterprise, never mind a gray-area one with enormous regulatory risk.
I don't think either of them were 'bad', but probably found themselves at the helm of a ship that took more skill to pilot than they had, whatever went sideways was more a result of that, than a deliberate scam from the outset, which would be someone like Russ Hamilton. They were in over their heads and it was bungled, but also probably fair to point out that most of the people who think they could've done it better would've had the same result.
Exactly. Interesting parallel with the .com boom.
Quote:
Originally Posted by Donkey Schon
Fundamentally disagree on your conclusion, but agree that they were beyond poorly equipped to run a business at the scale of full tilt. Most scams did not start out as one, but I have studied / read about more than I can count and there is always a decision point(s) when it is obvious to the perps that they are doing something wrong / illegal to enrich themselves knowing it will hurt innocent victims. Sometimes they rationalize the action thinking they can fix it in the future and other times they just refuse to think about the inevitable outcome of their actions.
In the case of Howard and Chris (and others who benefited from taking player funds at full tilt) they would have known that the decision to access and distribute money in player accounts would result in harming players. They may have convinced themselves that the site could make enough future profits to repay the amounts they helped themselves to; however, that is no more credible than the accountant who embezzles corporate funds and when caught rationalizes it by claiming they intended to pay it back eventually.
I like to think of myself as a forgiving person, but Howard and Chris have never taken accountability for their actions. Their "apologies" are qualified and they are unwilling to answer basic questions that have been asked since Black Friday exposed their grift. Until they take responsibility I do not think they will ever be welcome in the poker community at large.
Not against this, it's possible that at some point they took money with some sort of moral guilt, but they may have had debts to pay, it can start as a very reasonable thing as start spiralling out of control. But regardless of what ethical guilt might or might not been present, here's an important fact that's more important than whether they felt wrong or right:
It was their money, it was not illegal.
If someone deposits money to your company, you now hold their assets and have a liability to them, the company can shove their money up the butthole if they want to, that's not illegal because it's their money, what they still do have is the liability to return that money though, but these are 2 separate positions.
Banks, of course, do this all the time, and it was surely a point that might have been brought up when justifying this during executive meetings:
"Hey banks do this all the time"
A very basic setup would have been to have 2 separate accounts, one for player deposits and the other with rake profits. It's possible though that they didn't even have this basic accounting setup, but even if they did, if their growth operations and salaries went overboard as income and growth slowed down, and they were out of money would you have:
A) Asked for a loan.
B) Taken money from that huge bank account with player deposits.
That's when the "Banks do it all the time" excuse would be brought up, maybe even the "it's our money" excuse, BOTH true and legal! Of course, they weren't a bank, had no banking experience, were not subject to banking regulations, etc...
But I'm definitely in the band that considers the case mismanagement rather than fraud, something that is settled with a chapter 7, an asset liquidation to creditors, and that's it.
In a sense when one plays poker one assumes risk, they aren't playing poker in a vacuum, you don't have an inalienable right to play poker and the poker rules are not the ones that govern the world, poker is a subset of business rules, and you are allowed to play poker always because a business allows you too (unless you are playing home poker), when that business fails, you really don't have legal rights to your deposits in excess of the assets available to the business.
I'm not familiar with bankruptcy procedures though, I know that it's a crime to embezzle funds before a bankruptcy, but as long as you liquidate existing assets, the business dissolves, business as usual.
If you are going to cite your freedom to play poker, then be prepared to deal with the consequences of that freedom.
This is the nature of any business, and Poker out of any industry is not going to be exempt or especially prosecuted beyond the corporate veil to ensure the assets of degen gamblers are respected, not anymore than the assets of actual banks or real businesses. What do you think happens if your business signed a yearly contract and you are behind on payments and your business goes bankrupt? Do you think I would chase you down personally so that you pay the debts of your business? No you would file for bankruptcy and I would take it as a loss of doing business.
Business as usual, if you can't handle risk don't play poker.