Wednesday, October 5, 2011

Ponzi or No Ponzi? That is the Question!


http://online.wsj.com/article/SB10001424053111903791504576585390448785426.html

8 comments:

  1. I don’t see where this creates a major loss for the government and the parties involved. So the FT was running ‘somewhat’ of an online scheme using banks that gave them money to allow this scheme to be an ongoing matter, which should have been questioned first. But really the FT wasn’t collecting actual money from players to begin with, they were just using the money that players were putting into the site and getting from the banks to pay themselves extremely too much for something that really wasn’t going forward according to publish…wait, that does make it a scheme. The banks that were processing the money should have refrained from this to begin with, because it’s illegal to gamble online in the US so why even allow it to start initially? The banks should have done a better job at addressing the people handling the money and what purposes it was being used for. And if the money that is given to the players as “phantom money” that is never actually collected or possessed doesn’t exist then how hard can it be to just cancel out the online poker games? But if money is being owed to the US players and money is actually being collected from US players where is it going? Is that also a part of the owners/executives payroll cuts? For the players, it’s just like online shopping, when you are being asked for your personal information and banking information you always want to know exactly who is on the other side receiving all of that information and if it’s secure and accurate. And it is a risk at times when you are dealing with online sources, but it’s a risk that you go into willingly and know up front all consequences if it’s not handed into the right hands. For players that kept on playing but wasn’t receiving any refunds or rewards after winning so much should have known to stop early or question who they were dealing with. If those people get paid back their money or even something, they should feel lucky and learn from this mismanaged online scheme. But if the government allows online gambling to continue, even with new attempts and management, it should first make the old gambling site pay back what past players are entitled to all over the globe that were playing. But if not, which they shouldn’t be held entitled to, then let this be a learning situation and just go to the nearest casino or slot machine and play there.

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  2. This is why I do not trust sites like these because you are bound to lose your money some how. I think this is somewhat of a Ponzi Scheme no matter what their excuse is. Even if they are telling the truth about, "maybe it is has to do with a problematic bank; a Ponzi scheme requires an investment vehicle in order to receive a certain rate of high return" it is still there fault. When someone is putting that much money into something, you would like the website to honor their half if you actually do win some money. When Full Tilt Poker and alleged investors take 444 million dollars from April 2004 to April 2011, there is something wrong there and they should not be allowed to continue the website.

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  3. I think it was more than mismanaged. Even if it wasn't a Ponzi scheme, the owners still committed fraud with taking the money for their own personal use. I can see where the lawyers could argue that it wasn't a Ponzi scheme because the customers or players didn't invest in the company; they just placed their money into an account for the use of gambling. Was it stupid on the customers or players part to trust the owners of the company not to use their funds for personal use, yes. So even if the owners didn't set up an elaborate Ponzi scheme, they still committed fraud against the people who trusted their money would still be in the accounts for them to gamble with. I don't necessarily agree with the lawyer likening it to the banking downfalls, customers put their money in the banks because there is some form of government guarantee that their money will be there when they need it, FDIC. I don't think the FDIC insures a gambling site.

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  4. I really do not know why, but the line that comes to mind here is, "If you play with fire, you will get burned". I wonder about the people understand to meaning of "gambling". When one places a bet with the hope coming out with a larger win, the chances are already slim. I do not gamble myself, yet I have noticed whenever there was gambling involved one cannot trust the next person with their money. Now this is online that makes it even worse because the person one is putting their trust in with their money could be on the other side of the world. Whether or not this was a Ponzi scheme if the site was "mismanaged", the fact of putting the two words of "trust" and "gambling" in the same sentence especially to someone one does not know personally could lead one the that of "getting burned".

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  5. Personally I would not call this a Ponzi scheme. Was there some scheming going on? Most likely, but if anything it was more in the direction of money laundering then anything else. Just as a kind of side note I would say that if people are really going to take this company to court over taking money from it's "customers", using that money, and not giving any "winnings" back to the players that do win, then we should take our government to court. If this is a Ponzi scheme then the Social Security System is too. That may seem like a bit of a radical stand, but when our government has taken money that it collects from us the taxpayers and instead of setting it aside, like it says it will, it uses that money for whatever it would rather spend it on...well I would say that there is a huge problem. And in this case it's really more of a Ponzi scheme situation because we are technically supposed to be investing our money so that when we get old we will be able to use all the money we have "set aside" to live off of after we retire. However the system is already bankrupt.
    If the poker site is a Ponzi scheme then we need to take a good look and see how many Ponzi schemes are really happening today.

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  6. Full Tilt Poker got caught with their hands in the cookie jar by the U.S. Justice Department. Ponzi schemes are nothing more then an investment fraud. This type of frauds involves payments of purported returns to existing investors from funds already contributed by new investors. These schemes are usually exposed and the individuals are eventually caught by the Justice Department. Ponzi schemes collapse because it often times it is hard to recruit new money meaning the funds dry up. Full Tilt was losing money and yet individuals were getting big paychecks something was not right in bed town. These individuals are ethical egoist perceived as selfish and self interest. These individuals committed a serious degree of white collar crime know as contrepreneurial crime whose world exist of scams and frauds. It laughable because in poker either the house wins or you win so these individuals knew the difference between right and wrong. Full Tilt even registered the website in the U.K. as a method to maneuvering our legal system. For their actions the company should lose their license.

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  7. By understanding the definition of a Ponzi scheme defined by Mr.Ifrah, I do not believe this issue was that of a Ponzi scheme. The definition he gave stated, “A Ponzi scheme requires an investment vehicle in order to receive a certain rate of high return.” And as he also stated, “None of those things happened here.” It is under the understanding that Full Tilt was mismanaged. Instead of giving their customers their winnings the owners and executives of Full Tilt pocketed the money. This is proof of unethical and poor management. This is fraud! I thought it was illegal to play poker online? I’m guessing I’m wrong but I believe internet sites like these should be abolished because they stir up nothing but trouble.

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  8. There's obviously some problems with this online poker site. If the company says that they are going to pay the players, then they should be able to do so. The fact that they are not able to, but somehow were able to take so much money for themselves is definitely wrong and proves that this is fraud. At the same time, I think that the players should have known what they were getting themselves into. To trust a gambling website is pretty naive. I don't think either party is in the right here, but I do think that the company is more in the wrong. They should be held responsible for what they have done. And hopefully this will set an example for others trying to run the same scam and will make the players think about what they are getting themselves into.

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