Poker scandal

[Elianna]

Quite a lot. The U.S. didn't shut the entire company down. What it did in April was it seized its U.S. facing domain name (blocking access to the U.S. website), and froze payments working from Full Tilt -> payment processing companies -> banks. It did this along with a couple other major poker sites, the biggest other one being Pokerstars. Both companies continued to operate their sites legally overseas, but froze real money action for all players with U.S. addresses. About a month after the U.S. shutdown, the Feds made an agreement to let the sites pay out the U.S. players' remaining balances, while litigation continues. Pokerstars promptly paid everyone back.

 

Full Tilt however did not. Full Tilt ran into additional trouble, it got its gaming license (issued in some other country) suspended (I forgot exactly why). Also, it came to light that Full Tilt was either grossly mismanaged, or was run by outright crooks, because they didn't keep the money in player accounts segregated from their operations, and used it to pay owners & to run things. A legitimately run site should have been be able to run operations and pay out its profit dividends solely from its enormous incoming revenue stream (the rake), while keeping player funds sacrosanct & separate. But now you have a situation where they owe players hundreds of millions, but only have a few tens of millions to pay them. This is a fraud/theft charge, and a separate legal issue from the original one filed in April, which alleged money laundering (since the payment processing companies weren't properly disclosing the destination of the funds to the banks), among other things. For the April charges, arguably no one got defrauded, since everyone got the money they were supposed to, but for these new ones, people are are being stolen from.

 

Thank you. The part I found especially revealing was

About a month after the U.S. shutdown, the Feds made an agreement to let the sites pay out the U.S. players' remaining balances, while litigation continues.

 

That was the piece I was missing.

[aguahombre]

About a month after the U.S. shutdown, the Feds made an agreement to let the sites pay out the U.S. players' remaining balances, while litigation continues. Pokerstars promptly paid everyone back.

Perhaps, I missed something too. But, what I did read was not clear as to whether the Feds allowed FTP as well as Pokerstars to pay of the U.S. players' balances. It sounded as if perhaps only Pokerstars was permitted to do so; it only took PS about a week to pop my money into my personal checking account.

[luke warm]

it only took PS about a week to pop my money into my personal checking account.

it took an average of 6 weeks for me to get mine, from each of several different sites, but i did get it all

[Gerben42]

I think this is not the most helpful comparison.

 

Less helpful comparison: Prohibited black market (A) vs. legalized/regulated market (B)

 

More helpful comparison: Legalized/regulated market (B) vs. legalized/unregulated market (C )

 

Arguing that B>A does not mean that B>C. I'm not taking a position, but since I suspect that most here will agree that A is the worst scenario, the debate should be between B and C.

 

A is the worst yet it is the case for many products. This is exactly the position of the Dutch government when it legalized soft drugs. What do you think the drug dealer's reaction was?

 

A) Cool, now I don't have to fear going to jail anymore?

B) Drat, now I have to pay taxes and competition is going to reduce my margin.

 

It certainly was B). Another situation is what's supposed to be the world's oldest profession. Those ladies in the red light district in Amsterdam have a labour union. If you are in the business, your work conditions will probably be best in Amsterdam.

 

It simply never works to criminalize an activity that a large segment of the population really wants to do.

 

So true. People are going to do these things anyway, better legalize them so they can be controlled. This should be the way for gambling too.

[blackshoe]

I forget who said it originally, but... "There are two kinds of people in the world. Those who want to control others, and those who don't." The former cause most of the problems, IMO.

[barmar]

The reason it's tough to legalize and regulate things like this is political: legalizing something is interpreted as condoning it, perhaps even encouraging it. If the politician is supposed to be espousing conservative values, he can't vote in favor of legalizing vices without appearing to be hypocritical. That's why it's so difficult to legalize marijuana, gay marriage, various forms of gambling (except state-run lotteries, for some reason), etc. Conservatives are big on the "slippery slope" argument whenever these things come up.

[aguahombre]

But "legalize" means they made it illegal to begin with. Therein lies the problem; Legalizing is merely undoing someone else's meddling.

 

Regulation, on the other hand, is a response to a perceived need. Deregulation is also undoing someone else's meddling :rolleyes: but regulation by government theoretically occurs only when the private sector is incapable of handling things.

Edited September 26, 2011 by aguahombre

[blackshoe]

Theoretically, maybe. In practice, regulation occurs when some group lobbies (or bribes) politicians to pass regulatory laws in their favor. It becomes worse when the politicians establish a bureaucracy with its own power to regulate. In theory, if politicians vote to do things we don't like, we can vote them out of office and put in somebody who will undo those things. Getting rid of bureaucrats is harder.

[mike777]

"...Full Tilt allowed some U.S. players to wager with funds it never collected, creating what the government says was $130 million of "phantom money." The government said the business became a Ponzi scheme.."

 

 

 

 

http://online.wsj.com/article/SB10001424052970204422404576592813676923134.html

 

 

 

 

"Last Tuesday, in its amended complaint, the Justice Department accused Full Tilt owners and executives of paying themselves $444 million since 2007 while defrauding players"

[blackshoe]

"Phantom money". Kind of like what the banks do with "fractional reserve banking". :rolleyes: :lol: :lol:

[ArtK78]

In the end opinions are like asses and everyone should treat their religion like their penises, but we'll continue to discuss all this all over again.

I am not exactly sure what you mean by this last remark. It is certainly true that many people stick their religion in places where it doesn't belong.

[wyman]

I am not exactly sure what you mean by this last remark. It is certainly true that many people stick their religion in places where it doesn't belong.

 

"It's fine to have one. It's fine to be proud of it. But please don't wave it around in public, and please don't stick it down my children's throats."

[Foxx]

In the end opinions are like asses and everyone should treat their religion like their penises, but we'll continue to discuss all this all over again.

 

So if I'm an atheist, are you saying . . . . . . .

[aguahombre]

From all that I have read, the only person I believe is clean ---and truly cares about the players ---is Tom (Durr) Dwan.

 

But, I really really hope P.I. turns out to have merely made some questionable choices.

[phil_20686]

Another example is abortions. Before they were legal, women got "back alley" abortions, and complications (including death) were common due to poor conditions. Legalization meant that they could be done in legitimate hospitals and clinics, and the government and medical community could set and enforce safety standards.

 

It simply never works to criminalize an activity that a large segment of the population really wants to do.

 

This is a myth. Abortion was roughly as unsafe as any other surgery back in the day, but by 1972 the number of deaths from abortion was 39. That number rose again after abortion was legalised as abortion became more common, then fell again as surgery became safer. The number of deaths from surgical abortions is now between 20-30 in a given year. However the total number of deaths could be as high as 50 as the number of deaths from RU486 remains very unclear.

 

 

As of 2006 the FDA release a report in which there were 7 known US deaths from RU486, and 72 cases of septic shock resulting in blood transfusions which were a confirmed as a result of RU486, but it is very unclear what the detection rate is, and no studies have been done involving large enough numbers of people to pin down the death rate with any certainty. There was a death in the Canadian trial and an almost death in the US trial, but clinical trials tend to be on relatively small numbers of people. I don't even have reliable data on the total number of times RU486 was prescribed, although sales are up a lot since then. One trial of 2000 cases found that 8% suffered serious side effects including significant bleeding and sepsis, although no one died. However, developing sepsis during a clinical trial is likely to be picked up on far faster than in RL, and it can kill is a relatively short space of time (3-5 days). If you added up all the clinical trials you would get a death rate of between one in 10000 and one in 20000-but that sample is still too small, the last data I have for use is for 2005 when 13% of 1.2 million abortions were provided by RU486. That would give an implausibly high number of RU486 deaths, which just tells you that there are not any big enough studies to be accurate.

[phil_20686]

So true. People are going to do these things anyway, better legalize them so they can be controlled. This should be the way for gambling too.

 

This seems like an example of the fallacy of composition. Legalisation certainly makes it safer for those people who would do it anyway, but it might make the problem worse if the result of legalisation is that more people do it. The second half is the argument for making things illegal. Even Amsterdam has a healthy catalogue of illegal drugs. It would be beyond absurd to legalise heroin, given that it really can hook you in a single outing. Legalising cannabis and alcohol makes much more sense. All drugs lie somewhere on this spectrum.

 

Tobacco is probably an example of the other side, it seems to have far more harmful effects than beneficial ones, and since its attraction is virtually purely social, making it illegal, as a social effect, would probably reduce the number of smokers by a large margin - even the partial ban on smoking in public places in teh UK seems to have haad a large beneficial effect.

[kenberg]

This business of illegality is intriguing. With the death of Steve Jobs I learned that he had taken LSD. I am of an age where I knew more than a few who did. Myself, I have never even smoked pot. Whatever its merits, I'm sure I can do without it and I am not interested in ingesting a substance that I purchase from a person who, by the very transaction, is a known law-breaker. I take the same attitude toward online poker. Who needs it?

 

Some years back there was a story about a guy who was arrested for fraud. He had claimed that he could help people duck taxes by shipping some of their money offshore. You would think it would occur to people that giving their money to someone who is advertising himself as a crook is not really a good idea, but apparently many gave him their money.

 

As to abortions, I was young at the time abortions were illegal. Since I was put up for adoption by my unwed nineteen year old biological mother, I suppose I might think twice about the effect of having abortion made legal. At least retroactively. But I think that it should be legal. It's really a completely different matter than online gambling or dropping acid. No woman thinks "Gee, I think I will have some fun today and get an abortion". It's a tough call for any woman and I favor staying out of her way as she makes this difficult decision.

[blackshoe]

I question your statistics, Phil. Or perhaps you're talking about something other than you appear to be. IAC, see http://en.wikipedia.org/wiki/Abortion#Unsafe_abortion

[phil_20686]

I question your statistics, Phil. Or perhaps you're talking about something other than you appear to be. IAC, see http://en.wikipedia....Unsafe_abortion

 

Here

 

http://en.wikipedia....of_legalization

 

 

Its a CDC number, so it should be reliable.

 

PS All statistics above were for the US obviously.

[luke warm]

As to abortions... I think that it should be legal.

would you be against individual states deciding this, and other (say weed) issues?

[kenberg]

would you be against individual states deciding this, and other (say weed) issues?

 

 

I suppose that all I am really saying is that I prefer that it be legal. How to resolve the issue when clearly others feel that it should be illegal is a tougher matter on which I have no seriously original views. From the point of view of online poker, my main point was that the abortion issue, and for that matter other family issues involving children, fetuses, religion, schooling, etc, should not be lumped in with what might be called freedom of pleasure issues. It's just really a whole different kettle of fish.

 

For the freedom of pleasure issues, I guess I see the question as "How much, if at all, should we interfere when someone seems to clearly be ripping someone else off if the ripee is a willing sucker?" If someone really wants to throw his money away, is it condescending to try to stop him? I suppose so. Actually I sort of regret jumping in here. I don't but lottery tickets. When we visited the Grand Canyon, Yellowstone, etc we landed in Vegas for convenience and left with a rented car, all w/o visiting a casino. I just don't get the allure, and I guess I will back off in commenting.

[aguahombre]

would you be against individual states deciding this, and other (say weed) issues?

States are governments. Either you are for governments deciding the legality of things for you, or you are against it.

 

I don't care what a government where I don't reside does to you, and would prefer that the one where I reside doesn't decide certain things for me.

 

Unfortunately, Utah has some of the stupidest alcohol regulations on the planet; but, they didn't consult with me on the issue. I have the choice to live here and it creates more bureacratic jobs :rolleyes: