The big news of the week obviously is the branding of Full Tilt Poker as a "Ponzi scheme" by the Department of Justice. The "big lie" technique once again proved effective, landing Full Tilt coverage a leading spot in major news outlets including the New York Times and Wall Street Journal.
So was Full Tilt a Ponzi scheme? I would say no, not in the classic sense of the term. Not even close.
A Ponzi scheme at heart is a simple investment swindle. A con man takes in money, promising an abnormally high rate of return. Old investors are paid using money taken in from new investors, with the crook pocketing as much as he can skim. There is rarely any operating business or actual investment involved, at least beyond whatever facade is necessary to perpetuate the scam.
Full Tilt, on the other hand, was a legitimate, operational, almost certainly profitable business - and it remained so almost up to the end. Distributions would have been made out of actual revenues. It is entirely possible that the distributions may have been excessive, but that fact in isolation is neither criminal nor indicative of a Ponzi scheme. The DOJ conveniently doesn't tell us much about when distributions were made.
In the end game, the rules changed and Full Tilt was not receiving money from new "investors" - to the contrary, it was crediting accounts but not receiving the cash. Cannibalization of existing assets followed and you get to today. It's media-friendly to call it a Ponzi scheme but that's it, it's not the truth. The truth is far more complex.
That said, it doesn't matter.
At this point, Full Tilt as a viable entity is almost dead. For U.S. customers it is absolutely dead. It is possible that some offshore investor might find value in the name and non-U.S. customer base, but it's far more likely in my opinion that the company will end up in liquidation and those assets will be sold piecemeal.
I also think that U.S. customers are going to find it particularly difficult to recover any money even in the case of a last-minute white knight because of the payment processor problem. How do you fairly compensate player X who "deposited", was never charged any money, and ended up with a balance on the site? Do you just deduct what was never received? If so, how is that fair to player Y who had actual money at risk and lost? It's going to be a mess.
So, in conclusion, RIP Full Tilt, RIP bankrolls, gg online poker.