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Tuesday, September 27, 2011

This Post Needs More MS Paint

As the endless wait continues for our "friends" in Washington to decide that online poker isn't the devil and that society won't collapse if people like to toss around a few electronic cards and win or lose a few dollars, I really have nothing new or interesting to say.  It just happens to be ten minutes to five on a rainy Tuesday afternoon and I'm thoroughly fed up with everything I've been doing, so why not blog.

Lately I've been debating what the wins and losses would be if I simply abandoned the internet.  I don't feel like I spend outrageous amounts of time on twitter, Facebook and other social media sites but I do check them pretty often.  I waste quite a bit of time reading the 2+2 Forums - not so much for the poker strategy but because trolling the idiots who post there is pretty amusing.  There are a few other sites that I read.  All in all the internet consumes a pretty decent chunk of my week.

Back in the day (a hackneyed phrase that I love nonetheless) the internet was a source of profit.  Now, since there isn't any income coming in it's a liability.  Not a major one - I wouldn't save much money if I canceled my domains and my ISP - but an expense nonetheless.

If I abandoned the internet I would certainly be less informed.  I rely on the net for news as well as entertainment and that news includes both "hard" news and Facebook updates about what everybody's kids are up to these days.  I'm not sure it matters.

I would miss interacting with my invisible internet pals, but I'm not sure how much of a hit that would be.  I enjoy y'all but it's not like we talk daily.  Other than a couple folks with local ties I'll probably not see many of the WPBT folks ever again (Las Vegas is not happening in the foreseeable future).

It would not be difficult to fill any time saved.  There is always something.  When I canceled my cable subscription the internet filled the time.  If I surfed less I would probably read more.  There is always something.

I don't make rash decisions - hell, it seems like I hardly make any decisions.  I haven't thought this one all the way through.  But that's what I'm thinking about today.  Honestly, I miss online poker.

Thursday, September 22, 2011

No, Full Tilt Wasn't a Ponzi Scheme ... Not That It Matters

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.