Major Online Poker Site's Owners Gambled with Players' Deposits

Illustration for article titled Major Online Poker Sites Owners Gambled with Players Deposits

Even though they've been shut down for months, online poker sites are still finding new ways to get themselves into trouble. Full Tilt Poker—probably the most popular site for high-stakes players—is accused of taking players' deposit money and gambling with it.

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After several high profile poker sites were shut down earlier this year, most came to an agreement with the government to unfreeze their assets so that they could refund their players' deposits. Except Full Tilt's coffers came up well short, and when prosecutors looked into it, they found that owners and management had tapped the secure accounts—where $390 million had been deposited by players—for their personal use.

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Oh, and those owners? They just happen to be some of the most visible high-stakes pros in poker, like Howard Lederer and Chris "Jesus" Ferguson.

Federal prosecutors call it a "global Ponzi scheme," and the shoe kind of fits. The bill came due and the money wasn't there. But not so, say pro-online poker advocates! Full Tilt was simply lying to their customers and embezzling funds. Which makes all the difference, I guess? [NY Times]

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DISCUSSION

DennyCraneDennyCraneDennyCrane
DennyCraneDennyCraneDennyCrane

It's not a Ponzi scheme.

A Ponzi scheme is where you are promised big returns on your money, so you invest, and when it's time to cash out, the 'growth' is taken from new investors.

This is embezzlement, plain and simple. Money has been stolen for the private use of somebody with access to the funds. Calling it a Ponzi scheme is entirely dishonest, and I'm guessing only got used because of the numerous Ponzi schemes which have been uncovered recently (It tends to happen in recessions, since people pull the money for 'safe' investments and suddenly, POOF, money's all gone...) and the Feds wanting to associate online poker with them...

Which is stupid, because "embezzlement" is just as worrisome, and a hell of a lot more accurate.