$17.5B was the principal amount of the investors' original investment.

This this this this this. Anyone any proof that Dwan is staked apart from some minging attempt at banter with the whole "Chinese Triads" thing?

Banks also have assets to cover their liabilities even if they are less liquid than the deposits.

When there was a run on the UK's Northern Rock in 2007 the government had to put in 1.4 billion and take it into public ownership to stop the run. They eventually lost 400m on the deal when they sold it, though it was argued at the time they sold it too cheap.

This was a company with a 45 billion mortgage book though, so the loss from guaranteeing the deposits was a small fraction of the size of the business.

As a moderate libertarian obviously this isn't something that "should" happen, but the other choices
1) banks scrapping savings accounts and replacing them with long-term savings bonds you can't cash in or

2) banks only lending money very short term or with the right to call it in at short notice

seem worse than

3) the present state - banks taking deposits you can withdraw short term but giving long term loans you repay over years or decades,

even if 3) requires some form of government intervention.

"Most" of Madoff's victims wont see a dime yet every Full Tilt player will get every single player? There are more artful ways to avoid being proven wrong son.

I wasn't proven wrong. You didn't address half of my post. Particularly the part where most of Full Tilt's depositors willingly lost money on the site without even being remotely schemed into doing so the way they are in an actual Ponzi scheme. How were these people deceived, exactly?

The only reason this gets labeled as a Ponzi scheme is because your outdated 200 year old political system can't keep up with the times and create a new legal term to describe it. Which, is really what should happen.

Please explain how the majority of losing players who deposited money on this site were schemed into losing their money. If you can't then there is no "scheme." Trying to equate a poker site to an investment fund is ******ed. Your entire legal system in the US is ******ed.

I'm sorry, but Full Tilt was not scheming anyone into believing they would see a guaranteed return on their deposit the way actual Ponzi schemes do. 90% of the losing players who accounted for the majority of the money on the site we're not investing in anything, guy. They were willingly losing money without any deception taking place.

What does a losing player have to do with the fact that Full Tilt did not properly segregate player funds? It's a gambling site - losing players are going to lose what they gamble. The question is whether Full Tilt properly segregated the funds that were on deposit and/or whether they had financial backstops to guarantee they could return all those funds to players. They couldn't. The only reason Full Tilt players got their money back was because there was a financial incentive for a competitor (PokerStars) to make those players whole, which was done to protect the industry and maintain the trust of players. The only reason Madoff investors are getting their money back is because the conservator found enough deep pockets in the industry to sue for their tacit enabling of Madoff's actions.

Because the money in the Full Tilt system wasn't acquired by deceiving depositors into believing that they would see a guaranteed return on their investment. In an actual Ponzi scheme the investors in the fund are deceptively guaranteed a profitable return on the investment. Hence, the term "scheme."

No such guarantee was ever made by Full Tilt and the fact that they didn't have enough funds in their system to cover player accounts doesn't make it a "Ponzi scheme" by default.

Is it financial fraud of some kind? Yes.

Is it a "Ponzi scheme?" Nope.

P.S. If a person was dumb enough to leave all their money on a poker site after the government started causing issues for online poker sites in 2006, then they deserve to have issues getting their money back. Only a naive child would think everything is fine with online poker after the biggest site in the world was kicked out of the market in 2006. I have no sympathy whatsoever for any player (myself included-I had $5k on Absolute Poker that I'll never see again) who kept money on an online poker site after 2006. Players had ample time to remove their funds to a more secure place and they possessed all the warning signs that would motivate them to do so.

Full Tilt claimed that all player funds were held in a segregated account, which by definition meant that 100% of funds would always be available for demand withdrawals. So there was a reasonable expectation by players that their money was safe.

Full Tilt instead those funds as a piggy bank for ongoing operating expenses and dividend payments. They expected future player deposits and the absence of a mass withdrawal to cover their illicit commingling activity. That by definition is a ponzi scheme.

I don't perceive degenerate gamblers paying for entertainment on a poker site that clearly operated in a legal grey area as "financial investors" hoping to gain a return on their deposit.

These were customers purchasing a product. No investments were made by these people. As a result, no "Ponzi scheme" took place. As investments need to take place in order for a "Ponzi scheme" to take place.

I've already said that I agree there was financial fraud, but I'll never agree that this was a Ponzi scheme because it wasn't. Just because you can present a few parallels between an actual Ponzi scheme and the situation with Full Tilt doesn't make the situation with FT a Ponzi scheme...it makes it a coincidence and nothing more.

How far off the tracks have we gotten since post #1????

You boys and your online pokerZZZ.....

(emphasis on the ZZZ as you guys are boring the crap out of what was a fun read)

Can you take it back to your containment thread please?

Oh, I think the discussion is over trixie.

Hey leaky chips. I played on FTP from 2006-2011 and did 6 figure bank wires every year from 2007-2010. I loved FTP and will always have fond memories of their site. However, what you post is not true on cash outs prior to Black Friday. I attempted to bank wire either 120k or 160k in both Jan and March of 2011, and was told both times they were having problems with their processors and to check back soon. I didn't think anything of it at the time because of of all prior smooth withdrawals, their god like status within online poker, and my immense love for the site itself. But the fact is I wasn't able to cash out in early 2011 as I had done for 4 straight years prior to 2011.

No, they were paying for a service. There is no "product."

/nit

FTP was in a bad way before BF. There were problems with payouts before then.

And not everyone is getting repaid in full.

Basically LeakyChips, you're wrong.

I don't care if you had problems. It doesn't make it a Ponzi scheme. I'm not arguing with anyone about financial fraud taking place.

Maybe, the government was screwing with processors. Technical difficulties are common for entities under investigation by US authorities.

Can I ask you...what went through your head after Party got kicked out of the USA in 2006? Did Black Friday seriously take you by surprise? The only thing that surprised me about Black Friday was the fact that it didn't happen much sooner.

Poker sites are only one area of focus for the government...they were focused on taking down a lot of sites. This all started in 2006. Cannabis horticulture sites were also being taken down starting in 2006. That's when Overgrow.net was taken down and the owners extraditied to the US. Now that poker sites are down they're focused on going after alternative media sites that promote conspiracy theories. The situation with poker sites was all part of a large plan by the government to take over the internet.

Poker players look at Black Friday being all about poker. In reality, that was just one tiny little step in a much larger plan.

$250K limit on the FDIC though. Just pointing out.



EDIT:

Also, Full Tilt was clearly not a ponzi scheme. A ponzi scheme is an actual defined thing with an actual specific definition. Full Tilt just didn't meet the definition. Ponzi scheme was said in press releases for what I assume are publicity reasons; people have heard of "ponzi scheme".

If by the FDIC you mean tax payers then, yes, it's backfilled by the FDIC...

Lol. Full Tilt was a Ponzi scheme. Lots of people lost money because of what happened. Stars paid the freight to keep players whole but that doesn't magically make it not a Ponzi scheme.

Not everyone on the planet can see the hidden truths of reality as people like you see it. Sheeple gonna sheeple in the end, and all you can do to help is you continue talk about your predictions that you did not actually make before the fact. Perhaps with enough of that hindsight insight more people will finally understand your special grasp of how everything is interrelated.

Be sure to keep all the theories on yellow sticky notes so that the government cannot spy on them as they take over the internet, especially now that you have alerted them that you are onto them. You are that important, so you should take proper precautions.

All the best.

op wrote this 8 years after the fact so hellmuth was wrong

Phils a pretty smart guy or must be to have all you idiots still following him or kissing his ass after making a fool out of all of us and at a mnimum promoting (therefor assisting) blatant theft by UB.

But **** it yeah lets keep talking about how good the guy is, why not

Yea. Not to mention, he was friends with Russ Hamilton, too.

Right, because people making financial transactions with a poker site had no idea that there was fraud involved when those transactions started showing up on their bank accounts as "golfballs" and "weddingphotos."

Those people DESERVED to lose their money for keeping that much on a shady poker site that handles transactions like that. They knew fraud was involved and had no business keeping that much money on the site in the first place. I have no sympathy for players that lost money on Full Tilt and I believe it's an insult to victims of actual Ponzi schemes to try to equate Full Tilt players to them.

Players were willing participants in the fraud (myself included), not victims. Go spout your "Full Tilt victims" whiney little b***h sob story to someone who gives a ....

The main difference between ponzi schemes and fulltilt, is full tilt actually had revenue and the ability to exist indefinitely with a profitable business model. A ponzi scheme cannot.

Just because they paid out dividends in excess of their assets and/or retained earnings (I don't know the specifics of what they did), doesn't qualify it as a ponzi.

They look similar to the untrained eye, but they are very different. It's not fair to lump them in the same category.