lol, no, the biggest and simplest difference is that one is apples and the other is oranges.

Poker and banking are totally different business models presented to their customers.

Poker sites perform a service, while holding player funds for no other purpose than to meet player liability, and charge fees for the service against player funds which players have themselves paid as fees or put into raked play.

Banks take in depositor funds, which the bank itself lends to third parties; the Bank pays depositors for that use of the funds.

The ONLY similarity is that each model provides for players/customers to demand payment against the balances in their accounts.

That the FDIC insures those funds held by a bank has little to do with the difference between the bank model and the poker model.

(When my then-company launched poker operations in 2001, we were regulated by the Financial Services authority in Antigua, but they had no understanding at all of the poker model or even the idea of a P2P game.)

Cue Nooseknot to explain how a truly decentralized gaming operation never puts player account balance funds into the operators' hands.

Yikes. Sorry to hear. I'd wondered about your scenario many times. On Black Friday itself, as the news of the shutdown spread, people scrambled to their accounts to cash out their money before the site was no longer accessible.

Hell, I tried to do the same, but by the time I got to the client, I couldn't get on. At the time, I was pissed off. In hindsight, it worked out because I WAS able to reclaim what little money I had on there.

However, I can't imagine how many people were in your boat – that is, they attempted a cashout shortly before or on BF and thus had no balance listed by the time the Garden City Group began the remissions process.

^^

I wonder if anyone could make an educated swag at total dollar amount from all players that got caught in that vortex. A dont rem reading as much chatter about these type victims when the chit storm blew up

I didnt have money on site at time, but for sure would have done exactly what you describe.

I think they could get by easily with 20% of funds available for cash-outs. Players rarely cash out. Compared to a B&M casino where they probably need to have close to 80% of cash behind chips. Players aren't going back to Maine with chips.

I rarely cashed out. I think there was a % charge and real low dollar deposit max per day so it would be foolish to cash-out and reload every day.

I think a company should be required to have 2x the expect cash-outs plus an LoC for the rest. No reason they should have to keep 100% of player deposits in a cash-checking account.

So you think that they can use player deposits for their own use and maybe return it from their personal bank accounts if required?

Wow - you are either as dumb as **** or you are a super-troll. Judging by your OOT posts you are the former.

Nevada casinos must keep in reserve, not only every chip in play on the floor, but the total amount advertised on all slot machines and all the payments that the casino owes to previous winners. (copied from casinosformoney)

I didn't say they could use it for their own personal use.

They could have an LoC or some asset (even if not completely liquid) that covers the players' deposits in case the operation completely folds.

As a going concern, having 200% of the historical cash-out rate is plenty to cover any huge cash-outs plus give players confidence that they can cash out.

The FDIC Insurance is very important for the banking system. All of our money that we give the bank is not there. Less than 10% I believe. We deposit it not based on the faith of the bank, but on the government insuring it in case the bank completely screws around with our money. Which is why nobody cares what loans they make with their money. Let them go fund a book-making operation for all I care...or an off-shore poker site.

I believe it. I imagine that a very high majority of chips are cashed out at a physical casino compared to chips at a virtual poker room.

I am going to take a WAG that 50% of chips are cashed out in a casino vs. 10% at an Internet Poker Room.

Note to NVG: don't use golfnutt to escrow a bet.

I've made my mind up - you are just dumb as ****.

I worked indirectly with Caesar's Casino. I knew that 100% of the chips had to be backed by cash. Then again, this was on a casino so everyone was cashing out.

I don't have a personal problem with virtual chips not being backed 100% in liquid cash. I would think 40% in cash (assuming 20% is historical cash-out ratio) and the rest either in an LoC or backed by other assets (that don't have to be quite as liquid).

Ideally, there should be insurance so players don't have to worry about anything at all. That is what gives people confidence to deposits in banks. Otherwise it would be like Mary Poppins and a good old-fashioned bank run.

The last big flareup was in September in OOT. Much more interesting than this thread.

I have a huge problem with this.

Who cares anyway. We are both right we are both wrong. They could have 400 percent of the players deposits and the company was still going to be closed by the US government. Perhaps when companies like this come back they will be regulated differently.

Well, no. If they had 400 percent of the players' deposits, they would have been able to disburse all player deposits on their own rather than have PokerStars bail them out years later.

Responsible regulation should require online gambling sites to be able to cover all deposits and unregulated gambling sites should be illegal.

Thanks for the thread Layla123. Very interesting to read some of the stories. Especially after the years have made the stories more clear.

JFC, I can't believe some people who were fully deserving of reimbursement didn't get reimbursed. I thought the people that didn't get reimbursed fell into a few of the following categories. Some people never heard that they could get their money back. Some people had too small of a balance to care. Some people thought it was illegal and didn't want to get in trouble for asking for the money back. Tax worries. Or, some worked for the sites and they weren't allowed remissions. But to be owed legally, to apply for as required and then to not be paid is quite disheartening.

The ignore function on this site is useful, I will not say who everyone should have on ignore.

I would like more information about the "phantom money." I understood that at the very end people realized that they could deposit money there and it would not be taken from their bank account so they just kept doing it, but my understanding was that only happened a week or so before black friday. I do not understand how 130 million dollars was phantom money and players were passing it back and forth? That was roughly 30% of the total money in the site!

Are phantom money and phantom deposits two completely separate things? Or, do I just not understand that aspect of the story? Can someone enlighten me with some cliffs, or a link that explains that whole thing. Thanks.

It's been some years since I took a closer look at this case, and for some reason I recalled that the phantom deposits either never left bank accounts or ”got lost” on the way (but Full Tilt credited the money to player accounts anyway).

Now that I took a closer look at the FT Amendment Suit, it implies that ”phantom deposits” ($130 million) is exclusively money that was never withdrawn from bank accounts (if this is true, then obviously my theory in the opening post about some people potentially channeling some of that money to themselves can’t be true):

Source: http://online.wsj.com/public/resourc...ept20_2011.pdf

Also, from DiamondFlushPoker.com:

Source: http://diamondflushpoker.com/2012/12...final-summary/

This sort of data is presumably subject to freedom of information legislation.

I wouldn't be surprised if the number were even higher - if you include extremely small balances.

As long as you only count balances over, say, $100, this obviously changes, and for the purpose of this discussion it is reasonable to ignore micro balances.

I'm just saying that a seemingly high percentage of "non-compensated people" might well be quoted somewhere, but would have to be seen in context.

Analogies to a bank that keeps a fraction on reserve are lol ridiculous. A bank puts money that isn’t on reserve to work via making loans. This generates income that flows back to the company. They don’t give all that money to the board of directors so they can fly around in jets and play craps with it.

Also sick of hearing Ferguson and his apologists cry “everybody got paid” ...no damages? What about the wait? The lack of being able to use your own money? Interest? Where do you draw the line? What if you had to wait 100 years to get your money? 25? Even those who got paid were damaged.

at first thought the thread was basically all old news and totally hashed out multiple times in multiple threads.

But i have learned one thing about the fiasco.

The phantom deposit issue I already got, but only benefited players, some knowingly and some accidentally.

What I didnt understand is that some players got caught in the "withdrawal vortex", meaning they just happened to process a withdrawal at the worst possible time. Their withdrawal deducted from FTP balance but never made it to their bank accts.

Would the total amount of dollars in the "withdrawal vortex" be estimated in the range of $100,000's , $1,000,000's, or $10,000,000's ?

Finally I still am confused with the % of total player deposits that WERE NOT ever paid back. Was it 1%? 5%? 10% more ? Reading conflicting info ITT.

The 2 lesser amounts were denied for unspecified reason, and neither was an affiliate. The elderly gentleman had no idea about the entire process, and told me he was frankly stolen from. I informed him of the FT payouts but it was already past some deadlines, plus the dude is 80 freaking yrs old, not exactly a daily visitor to 2+2. Sad that Judas and Biteme stole from these 3 individuals.

As to some FTP folks who did not get their deposits returned by the remission, Well, No matter how hard and how long you try , some folks just don't get the word.