If it wasn't for flipping, would the online poker boom still be booming?

For those who don't know, black friday happened after PStars and FTP tipped the feds to a guy that set up their payment processing and skipped with a few million dollars of their dough. He flipped.

Because the geniuses running FullTilt would surely have fixed their 100 million dollar discrepancy and all would live happily ever after? Maybe Edog would be a world class sports bettor today?

This is my question. Would FTP have imploded? Or would they have been able to hide or payback the shortfall over time? We blame Prada for being a douche (I loved it when Trump sacked him even though he was otherwise doing good work) but would the sites have gone down eventually anyway, and if so, when?

fyp, while I believe that tipping of some manner occurred, and the witness definitely flipped, the two are not necessarily related... enforcement and prosecution did not depend upon the one guy you cite.

No, the "poker boom" was too attractive and big a grey market not to attract enforcement interest. (The Poker industry was subject to competitive pressures that lead some industry providers to color WAY outside the lines to grow as big as they were. A tipping point on "legitimacy" also had been reached ,where certain Nevada gaming operators were entering into prospective agreements with more than one of the eventual indicted BF companies.)

Something was going to happen. There was more than one investigation ongoing by DOJ prior to BF. The SDNY and District of Maryland reportedly were squabbling over which would get to proceed against which online gambling entity. SNDY drew the nod for FTP, Stars and Absolute; DMd got Bodog and a few others.

While flipping makes cases easier to prove, consider that Manafort's recent conviction in Virginia on those 8 of 10 counts did not depend upon the credibility of the flipped Rick Gates.

Let's see how things unfold next month in the next trial.

A lot of people make comparisons to fractional reserve banking and speculate that they could have stayed afloat if left to their own devices, but who knows?

My guess is no. Tzvetkoff only hastened the inevitable and FTP would have crashed eventually. The board was extremely greedy, paying themselves ridiculous salaries out of player accounts.

And they mostly got to keep that money. Crime pays.

FTP was collapsing before BF, due to its inability to compete with Stars, which it insisted on trying, without dipping into player funds. However, it is clear that a significant amount of pressure on FTP, and the industry generally, arose because of pre-BF seizures of funds and interference with payment processing relationships.

What if ?

FTP imploded because it was kiting player deposits while still making cashouts and drawing down funds .... That could have gone on longer, and perhaps someone would have bought them out, as Stars eventually did at the point of DOJ's gun. I happen to doubt a deal would have emerged without such external pressure, that it happened at all was keyed to DOJ pressure and some very creative deal-making in the settlement.

Absolute had already imploded beyond resurrection in my opinion.

The boom was already over before Black Friday.

Besides that, even without BF, FTP would have eventually collapsed and PokerStars would have gained the near monopoly they have today. Probably with exactly the same consequences.

In 2009 or 2010, I was consulting for a large European gambling company that planned to aggressively enter the German speaking markets. After crunching a lot of numbers, the decision was made that FTP and PS had cornered the market to a degree where only an absurd amount of money could challenge them and that it wasn't worth that considering the kinda bleak outlook for online poker.

Yep if you look at the numbers that were released afterwards there was no way FTP wouldnt collapse. Black Friday just sped up the inevitable. The greed and delusions were huge

The German speaking markets were/are a small subset of the world markets, but you are correct about the likelihood of consolidation.

The consolidation challenge, expressed in terms of players' demand for greater liquidity, reigned supreme for years. It was like climbing a burning rope to compete.

Aside from the issues in German markets, US market providers faced additional pressure in processing payments and banking, which is what was killing FTP.

FTP, as a business had value and was not doomed to collapse, but FTP under its then management/ownership probably was .... Rather than sue for peace with Stars, and negotiate a business deal somewhere with Stars or a third party, they tried to hide their problems (unsuccessfully), hold tight to their positions on top of their cashflow, and doubled down competitively while short-stacked.

They stole player funds to cover kiting deposits and ongoing seizures, then played the industry like floating a very thin draw to the river. The proposed deal with Station Casinos was not going to save the day, even in the absence of the BF prosecution.

In retrospect, it worked out for them as far as no one went to jail .....

Tzvetkoff along with every single gov buddy was going to be overmatched at the trial. The defense spent millions putting flippers under surveillance. Every single person was in some sense that was presented as a witness for Preet & Arlo. Some potentials had 2 , 3 man teams on them. With daily and weekly updates. They had Jeff Nelson purchasing drugs with his kid in the car. The defense mandated that Daniel have his 302's unredacted and shown that he was a key informant against an Australian case. From what I am told, that seemed to be more of importance with what he did for Black Friday in terms of being a flipper. The mere fact that poker is or is not gambling is the only argument.

The importance of a flipper is the setup before the case even begins. They agree to plead guilty for big named crimes in exchange for what is called a "downward departure". They get time in front of the judge long before you have ever been named. The feds start the game way before your name is in the grand jury. Flippers make this easier for them. The feds use the flippers to mold their case to their set of truths. Daniel actually started to fight his trial. Since the operator's lawyers are the ones that gave Daniel position to the sdny to detain, they couldn't exactly help fund his defense, after all, Daniel did get away with 100m of player funds.

Tilt was still making 40M without the USA. They declined many real offers prior to BF. Real as in, not like what you read about after BF with the ivey groups etc.

Without a criminal legal enforcement, FT would have been fine. Civil settlements talks with SDNY started while Reid was promising the lame duck session. It was a favorite at one point.

FT would have added sports and crushed it. While Stars would have bought wsop maintained the "poker only" stance and online poker would have been epic right now.

Really good/informative insight all. I agree with others that FTP would have eventually collapsed based on info that's now publicly-available. And like Madlex said, the "boom" ship had already sailed before 2011.

FTP didn't sink (just) b/c the company took players money. no glorification of the laughable management back then, but w/o tzvetkoff the DOJ most likely wouldn't have been so fast. especially cutting the banking options. therefore FTP wouldn't have to deal with such a huge amount of 'ghostfunds' (which is obviously management's fault). is still think it's quit funny, that Ray, Chris and Howard are the bad guys, but at the same time the banking issues (if you deposit via bank, they couldn't charge you) were a known thing to a certain degree and some players abused this.

Having said that, there's also some chance the DoJ wouldn't have needed tzvetkoff. there was a 'whistle blower' at utah sunfirst bank (can't recall her name, but she was an employee getting suspicious and going to the FBI). maybe that would have been enough for the doj, but not sure. given the insight tzvetkoff had, it's fair to assume that a 'mini black friday' would have had much smaller impact.

i believe the global decline would have been similar, but w/o the BF, the American market would have shrunk at a much slower pace. all the other factors, like the raise of the Russian Market and the Boom in South America would have happened too, so overall it wouldn't be that different.

the smaller rooms would have went 'rec player model' first, some would have closed, the big rooms would have been getting bigger. the over all deposits would have been smaller each year until even the market leader(s) would have changed their system.

tl;dr: maybe not epic, but probably more competition