GatewayRedbirds.com

http://espn.go.com/poker/story/_/id/699 ... -complaint

If true, the US government did everyone a favor by shutting them down.

In summary: They did not have the players' money on hand as they claimed, but were funneling tens of millions of it to executives and a handful of marquee players.

I don't see how this could surprise anyone. I also would expect they were cheating. How can you know what cards are played for real? 6 guys playing, every now and then, every player loses. How would anyone know?

Just like stocks, bonds, securities, futures?

Faceman wrote:I don't see how this could surprise anyone. I also would expect they were cheating. How can you know what cards are played for real? 6 guys playing, every now and then, every player loses. How would anyone know?

If players are getting cheated it would get exposed and the company would be worthless. Why risk that when you have a gold mine anyway playing things legit? They made something like $3 million a day almost pure profit from raking pots.

It's not surprising they didn't have enough in the bank to cover all of the deposits. They would never owe that full amount unless the site got completely shut down, but I would hope they kept more than they did on hand. Not many players would regularly withdraw money and the rake is constantly reducing the amount of money owed. The owners were just too greedy about aggressively withdrawing profits for themselves. The money isn't gone, it's just divided up among a bunch of people. They are just doing what any other business with large amounts of cash assets would do, but on a more fragmented, individual level. Someone once told me that the top players who were owners got a percentage of that $3 million every day. The number that was told to me was $10,000 a day put in their accounts. So obviously they would be withdrawing money a lot, but not many other people would. I would guess most of the daily profit was divvied up among the owners and player deposits were being used for all of the advertising they did and other operating costs. It would never be a problem except if they had to pay the full amount all at once. This is good news for players though, since now the government will go after all of the owners' assets to get the money back.

I don't know if you can call that a ponzi scheme when banks essentially do the same thing

cardsfansince82 wrote:If players are getting cheated it would get exposed and the company would be worthless. Why risk that when you have a gold mine anyway playing things legit? They made something like $3 million a day almost pure profit from raking pots.

It's not surprising they didn't have enough in the bank to cover all of the deposits. They would never owe that full amount unless the site got completely shut down, but I would hope they kept more than they did on hand.

You're 100% right on the cheating scandal. There was one at Absolute Poker were some players were able to see the other players hole cards - once it was exposed Absolute lost almost all of their player base and profits.

As far as the deposits, my understanding was the reason Poker Stars was able to get their money was because they actually opened bank accounts for each of their players and did the right thing by using profits to pay for advertising and sponsorship. But ya, it's not a Ponzi scheme just like Social Security isn't a Ponzi scheme.

And I wish they'd bring it back.