Quote:
Originally Posted by Skallagrim
I am hardly naive.
The term used was "illiquid" not "solvent" and there is a distinction.
While I admit I may be wrong and stated originally that it was merely my guess, it remains my guess that if BF had not happened FTP would have had the liquidity to maintain operations and satisfy obligations and recover from the losses due to processor theft, prior DOJ seizures of processor funds, and the no-processor deposits.
This is different from saying that on 4/14/11 FTP had enough cash on hand to totally pay every account balance forthwith. Given what Todd Terry stated was said at the hearing and Subject: Poker's excellent follow-up regarding the uncollected deposits, it is pretty clear this was not the case.
But on a balance sheet before BF, those uncollected deposits would still be listed under "accounts receivable" and thus would offset the "accounts payable." After BF, the deal with the DOJ essentially turned those accounts receivable into bad debts.
Finally, please note that this is not meant to defend FTP in anyway. They played loose and fast with fire and got burned (and thus burned the players too) - on that maybe we can all agree.
Skallagrim
We would agree that they probably accounted for these transactions as you suggest. However, besides the fact that FTP would have been in violation of AGCC rules which require financial solvency (they have three specific rules you can find on their site), they were not acting in accordance with GAAP accounting for a gaming operation. Moreover, if they had any reason to believe that they may not be able to collect on these funds - ANY - then they should have been charged off - any proper accountant who watched these funds accumulate to the size they accumulated to without taking action or charging off some of the receivables was acting in an irresponsible fashion. This problem, according to their statement had been going on for a long time, why did FTP wait so long before addressing it or not properly account for it? Estimates are the player balances were around $300M, to let it get to the point where over 1/3 of your deposits are uncollected is absurd - not even the PPA can defend that action! The evidence is piling up that even if BF hadn't happened, that FTP may have had eventually faced a serious solvency issue due to all the issues it has now acknowledged publicly that it was facing if any more negative events had occurred (another seizure, another theft, etc..) it's not a stretch to make that statement if you think through the numbers.
We do not believe poker is illegal, just as we dont think pornography is!
However, there are many local jurisdictions who (at least in the case of pornography and poker) have chosen to pass laws against it - that is a fact.
But the fact is that American is a puritan country and democratic country, FTP and PS and many of the others didn't play by the rules and they blatantly broke US laws (you can say it remains to be proven, but we will happily point you to at least one plea agreement by a former FTP payment processor acknowledging guilt). You are welcome to defend their actions or the actions of PS, but the evidence is damning and we doubt this will ever see a court room.
Your organization is at least trying to work through the process of changing the laws - so good on you for following democratic principals and not breaking the law.
However, if you are going to change the laws then correct the real issues about online poker. Get good regulation with real teeth that not only holds owners accountable, but players or owners who cheat, affiliates and media companies (or poker sites) whose media tactics entice kids to play or software companies that make and sell a host of cheating tools - then you may have done something useful for Poker.
Last edited by LedaSon; 09-01-2011 at 10:24 PM.