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back to article Full Tilt Poker boss arrested over $430m 'Ponzi scheme'

The CEO of Full Tilt Poker has handed himself in to American authorities to face charges of running a Ponzi scheme against its users. Raymond Bitar was arrested by the FBI at JFK Airport, in New York over allegations that his website, at one time the second biggest online poker company in the world, defrauded players by taking …

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Silver badge
FAIL

The odds are...

I'll never understand people gambling online.

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Anonymous Coward

Re: The odds are......

It's a great way to lose your all your money.

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Devil

Re: The odds are...

I down voted you only because I work in on-line gambling and if you discourage others from gambling, I'll have to move into the banking sector... Oh wait.

Bitar will regret getting on that plane. The Puritanical nutjobs are going to lynch him by his underpants

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Bronze badge
Happy

Why not gamble on-line?

In the case of casino games, or even horse-racing (unless you're REALLY an expert), I agree - it's a reliable way of losing money.

But I am sure it's possible, if you're smart, to earn money playing poker on-line. I think it was Steve Davis who pointed out that most people who play on-line poker are dumb or drunk or both. Assuming you're smart and stay sober, you will win. I wouldn't mind betting that more than a few students help themselves through uni by playing poker.

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Anonymous Coward

The odds are...

... that you have little understanding of probability, variance, stochastic processes, statistics, game theory etc.

If you have a good grounding in mathematics then it is possible to make money gambling against other people, whether that is on betting exchanges or any of the many variants of poker. NOTE: you can not make money gambling on house games such as roulette or blackjack.

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Re: The odds are...

Yes you can. Over the whole set of probable outcomes the net gain is to the house but for a finite set of outcomes there is a probability (and a substantial one at that) that you'll win. If EVERYONE Lost casinos would be very empty. You need a largish number of transactions for the pattern to revert to the mean.

You can make money out of casinos provided that you only gamble when the expectation value is greater than 1 and for a brief period before the financial crash that was possible (effectively it's due to the house edge being about 0.3% on blackjack if optimum strategy is played and getting the free money on offer as matched bonuses). Sadly the arbitrage opportunities have gone now. Did make about £20K with my Winrunner based three card poker player though.

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WTF?

Re: The odds are...

Isn't the logical thing just to leave some poker playing software running merrily away?

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Anonymous Coward

Re: Fisher39

> Sadly the arbitrage opportunities have gone now.

I think you fail to understand what an arbitrage bet is. An arbitrage bet is when you can bet on all outcomes and be guaranteed to win. One of the most famous ones occurred when one bookmaker offered 3/2 for Wayne Rooney to score and another offered Evens for him not to score. You could bet on both outcomes and be guaranteed to win. Casinos never have any house games where this could occur.

What you are talking about is getting a cash bonus and then gambling on house game until you have fulfilling the requirements for withdrawing the bonus.

In casino house games there is only one game that offers the possibility for long term winnings and that is blackjack where they do not shuffle after every hand. Online casinos shuffle after every hand.

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Anonymous Coward

Re: Ian

> ... leave some poker playing software running merrily away?

That will be expressly forbidden in the terms and conditions you agree to when you join the site. If they discover you are doing this then they will confiscate all your winnings.

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Bronze badge
FAIL

Re: The odds are...

or you make money taking advantage of free bets/sign up offers. gambling is gambling online or otherwise but the problem here is the US has such stupid laws (gambling is wrong unless its vegas/atlantic city/indian reservation). this leaves a lot of companies registering in costa rica, dutch Antilles (or whatever it is now) and other places with very little oversight (often members of supervisory boards own the gambling outfits they license, this is especially true with online indian casino's). this leaves them operating semi legally and leaves gamblers even more open to being ripped off

Now compare this to the likes of the bookies here such as betfair, WH all licensed, all above board and some even publically traded on the LSE (complete with the oversight that requires). People will gamble all making it illegal does is hand the money to scammers like this lot and lets people be taken advantage of.

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Re: Fisher39

my definition's my definition mate. May not be yours - you can call it what the hell you like and I'll do the same. It's betting to take advantage of tiny differences in the odds in your favour ........

Oh and the fact that haye shuffle after every hand makes absolutely no difference whatsoever, Oh and it's not just blackjack, it's any game in which the expectation value of the bet exceeds one which can include three card poker if played optimally, You can even do it on video poker, but such a large proportion of your return is dependant on straight flushs that you need to bet tiny amounts and play large numbers of games.

It's not just the expectation value it's the standard deviation of expected outcomes, which is why the expectation value principle doesn't really work on National lottery betting.

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Re: Fisher39

OOPs,. Before the arsey pedants arrive I should have said 'distribution' not standard deviation.

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Silver badge
Facepalm

Re: The odds are...

"NOTE: you can not make money gambling on house games such as roulette or blackjack."

Yes you can. That's the point.

It's just that *statistically* over a longer period of time, you won't. Casino takings on their games are - in percentage terms - small. US casinos even added an extra zero to their wheels to make more money (so play craps in US casinos: The odds are better).

It's not my thing, because ultimately gambling is a tax on people who can't do maths, as in the long-term, gambling against the house is a fools game. But that's not to say that you can't walk into Vegas and walk out richer thanks to Lady Luck.

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Anonymous Coward

Re: Fisher39

> my definition's my definition mate

Your definition is incorrect.

> Before the arsey pedants arrive I should have said 'distribution' not standard deviation.

If you are making up your own definitions then it doesn't matter whether you call it 'distribution', 'standard deviation' or dingbats. Unless you use standard definitions for your terms what you say has no meaning to anybody but you.

> Oh and the fact that haye shuffle after every hand makes absolutely no difference whatsoever

It makes every difference. With the shuffle future results do not depend upon previous. Without the shuffle they do. This is what card counting depends upon.

> it's any game in which the expectation value of the bet exceeds one

A positive EV does not guarantee to you will win. An arbitrage bet does.

> which can include three card poker if played optimally,

Three card poker has a negative EV. The house edge is typically between 2 and 7%

> You can even do it on video poker, but such a large proportion of your return is dependant on straight flushs

Only a few of the video poker games have a positive EV when played optimally so be very careful which ones you choose to play.

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This post has been deleted by its author

Re: The odds are...

I don't think it's Puritanical to expect people not pluder *ring-fenced* accounts. There would never have been any question of "paying them back" had these funds been legally handled.

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FAIL

There's a certain irony here...

...gambling in its truest form!!

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Stop

hmmm

"I have worked hard on possible solutions to get the players repaid. Returning today is part of that process"

Will paying back the millions he stole be part of the "process" as well?

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"Bitar will regret getting on that plane..."

He should've got in touch with Bernie Madoff first and asked how it all worked out for him.

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FAIL

The house always wins?

Not in this case it seems!

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Anonymous Coward

You've got a have a very weak level of morality to work in the gambling industry anyway, so this comes as no surprise.

Gambling causes many social problems.

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FAIL

Nope, judgemental people like you cause social problems. On line gambling is just another part of the entertainment industry. No surprise your an AC. no balls.

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You'll be claiming that they don't ban big winners next. That makes them parasites in my book.

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Anonymous Coward

So you don't think poor people with gambling addictions cause problems in society?

http://www.guardian.co.uk/money/2012/apr/20/gambling-hell-betting-addiction-debt

It's entertainment if you don't have to pay much money to take part. It is gambling when you have to cough up money.

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Silver badge
WTF?

But isn't that how it's *supposed* to work anyway?

Punters pay you money to play. You use the money in your account (which all came from punters who lost) to pay the punters who win. As long as the games are rigged so more money will end up being lost than won (by carefully adjusting the rake and having "bot" players controlled by, and whose winnings go to the house), you will never have to cover anyone's winnings from your own pocket.

I'm afraid I really can't see what he is supposed to have done wrong.

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Silver badge

Re: But isn't that how it's *supposed* to work anyway?

He didn't keep the money. He took it out and spent it.

It takes an impressive level of fail to turn a reliable money-making machine into a criminal enterprise with guaranteed jail time.

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Silver badge

Re: But isn't that how it's *supposed* to work anyway?

So he ripped off his own business, by taking money that should have been used to pay out winners' winnings?

That sort of makes sense, a bit; but surely they would have to prove he wasn't just borrowing the money?

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Re: But isn't that how it's *supposed* to work anyway?

"So he ripped off his own business, by taking money that should have been used to pay out winners' winnings?"

In a perfect world we would discover that he took the money to pay off gambling debts!

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Anonymous Coward

Re: But isn't that how it's *supposed* to work anyway?

> That sort of makes sense, a bit; but surely they would have to prove he wasn't just borrowing the money?

According to the terms of the gambling license they operated under they had to keep enough cash on hand to cover every punters balance. They submitted false financial certificates to hide shortfalls in cash.

Right up to the end they where claiming that all of the punters money was kept in a ring-fenced account that was never used for operational expenses. This claim was false and therefore any money they received from players was obtained by deception.

Between 2007 and April 2011 the owners of FTP paid themselves over $430 million dollars. This payout came from profits and players funds.

In August 2010 (before US authorities took any action) FTP owed $322.5 million to players. They only had $124 million in the bank which meant there was a shortfall of $200 million.

So no, he can't claim he was just borrowing the money.

DISCLAIMER: I'd better add this this in case. All of the above are allegations only and have yet to be proven in a court of law.

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Anonymous Coward

Re: Zombie

Poker sites don't care about big winners, in fact they like them.

A poker site makes its money from the rake. If a thousand players enter a tournament for $10 + $1 each then $10,000 goes in prize money and $1,000 goes to the poker site. The site does not care who wins the $10,000 - it does not affect their profits.

Perhaps you could give us a real life example of them banning big winners? Don't bother with Bruno Venturi, he exploited a software bug that enabled him to gamble for no risk.

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Bronze badge
Go

Re: Zombie

Plus they're insured against the risks.

Big winners mean big marketing opportunities mean more players....

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Anonymous Coward

There'll always be a place for him on the Groupon board

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Silver badge
Headmaster

"You'll be claiming that they don't ban big winners next"

Casinos ban people who win big - and regularly - at games played against the house because the odds in such games are loaded in favour of the house. Anyone who wins them regularly is probably shaving the odds somehow, the most common method being card counting in blackjack.

However, casinos never ban people who win big at poker because it's not their money being won, and because having a famous poker player at your tables attracts gamblers through the door. Moreover, casinos make their money from poker through the rake, which is basically a small percentage tax on each hand. The bigger the hands, the bigger the rake - so keeping those big winners who play high stakes poker at the table is more profitable.

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JDX
Gold badge

Re: "You'll be claiming that they don't ban big winners next"

Casinos negotiate with big players (not poker players) based on knowing how well that player plays. If the person starts winning too much, they can ban them or retract the special dispensations they offered to get them to play.

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Anonymous Coward

real thief here is the US government

Hadn't US authorities stolen the money it would have all been well.

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Anonymous Coward

Re: real thief here is the US government

You have no idea what you are talking about.

In April last year the DOJ gave Fulltilt permission to refund players. Fulltilt claimed in a press release they could not do this due to "legal issues". The reality was that the players money had already been distributed to the owners.

The owners of FTP paid themselves hundreds of millions of dollars from the players funds.

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Silver badge

Silly bastard

If he'd moved the money through several other companies with names like insurance, derivatives and investment in their portfolios he could have gone bust and got government support for exactly the same scheme. Apparently its not a crime if you share it about.

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Anonymous Coward

All on-line poker sites are Ponzi schemes

Incredibly easy to pay money in, but they make it very difficult to remove it. All the time they are making interest on your capital, taking a rake with each hand you play, and absolutely no way of guaranteeing that if everyone tried to cash in that they hadn't stolen all your money in the mean time.

The only way these Ponzi poker schemes don't collapse more often, is that people are happy to leave the cash on 'their' accounts and seem happy to top it up with more when they lose it.

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FAIL

Re: All on-line poker sites are Ponzi schemes

Your first paragraph does not, in any way, describe a ponzi scheme. Apart from that, great post.

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jke
Paris Hilton

Easy to profit from gambling

But a casino. Paris, because even she knows that.

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Card Counting

You know, if you can count that many cards, in your head, then good luck to you, it certainly isn't "cheating", it's math. Unless you have secret microswitches in your shoes or something. May have watched too many CSI's.

I wouldn't gamble online, as opposed to going to a casino or racetrack or bookmakers simply because I do not believe that they don't have an extra house protection layer built into them. A good croupier can put the ball on a roulette wheel into a given quadrant, the computer.. can pick every number not gambled on all night.

As for defrauding gamblers, well isn't that the definition of gambling?

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