In my usual surfing, passed across this, a Forbes post about one of those online poker sites that answered why I hadn’t seen commercials for those on the tube lately* — in short, a big-ass fraud charge. Among the details given was the following:
The management of Full Tilt Poker, the feds say, “operated Full Tilt Poker with the hope that only a small number of players would try to withdraw funds at any one time, and that Full Tilt Poker would regularly receive additional deposits in amounts greater than any withdrawal requests.”
Sound familiar to anyone?
According to the proposed complaint, when the U.S. government unsealed an indictment against [Full Tilt Poker CEO Ray] Bitar and effectively shut down Full Tilt’s U.S. operations in April, Full Tilt’s leaders realized they were facing a serious cash crunch but continued to accept foreign player funds while facing $300 million in liabilities. In June [board member] Lederer allegedly told others at Full Tilt that the company only had $6 million and Bitar worried in an internal email about a “run on the bank.” (emphasis mine)
Considering the legal dark-grey area that gambling — that is, other than state-run lotteries — occupies in most of the U.S., the interest on the part of government for the bottom to fall out is undeniable, even if the charge in the end is correct. “Look how risky online gambling is! See why we keep trying to ban it, which has the side effect of increasing the risk?”
If only these guys had skipped open gambling altogether and gone into “investment” banking. They’d be sitting on fresh scrilla from the Fed right now instead of indictments.
(* – through a loophole, they could advertise their “.net” sites, which were endorsed as free-to-play with the occasional tournament w/ prizes. People who wanted the real thing simply switched the last part to “.com”.)