“Poker players don’t make good businessmen," says Doyle Brunson.
With the poker world reeling from the addition of Howard Lederer and Chris Ferguson to the DOJ's civil complaint against Full Tilt Poker, many are confused by the discrepancy between their reputations and the allegations being laid against them.
And while the majority of the poker community bases their opinions on little more than what they see on television and read in the media, there are those who know the two FTP owners personally.
Doyle Brunson and Barry Greenstein can certainly be counted among the latter group.
“I’m extremely surprised because I’ve known Howard for years and years and I’ve always held him in very high regard,” Doyle Brunson told PokerListings.com on Day 1A of the 2011 EPT London main event.
“I always believed he was a very ethical person and I have to believe that he didn’t really know what was going on,” Brunson said.
In the amendment to the civil complaint against Full Tilt the DOJ asserts that Lederer received at least $41.8 million between April of 2007 and April of 2011. Ferguson is alleged to have received at least $25 million in the same time period.
The problem is that while the owners of Full Tilt Poker were receiving monthly dividends totaling $443 million over those four years, the company was for all intents and purposes insolvent in the time leading up to Black Friday.
The question is, how could intelligent people mismanage such a profitable company to the point of insolvency?
With player accounts totaling roughly $390 million in March of 2011, and FTP holding just $60 million in assets, the civil complaint claims that in an attempt to cover up the company’s dire financial straits, decisions were made to maintain the appearance that everything was business as usual.
Malicious Intent or a Misguided Attempt to Save the Site?
Poker legend Barry Greenstein has known Lederer and Ferguson for many years and has an idea about what may have led to their current quagmire.
“Let’s pick a name, Ray Bitar is usually the name people pick, didn’t want to alert anyone to the problems so to keep it on the down-low [dividend payments to owners] had to continue,” Greenstein told PokerListings.com.
“There’s no doubt in my mind that their thought wasn’t ‘We’re going to steal from customers’ but when Black Friday hit it came at the absolute worst time for them.”
Full Tilt Poker has since released statements pointing to a number of reasons for the company’s shortfall, including payment processor problems, government siezures and outright theft.
Compounding the problem, Full Tilt Poker was reportedly crediting players’ FTP accounts despite the funds never actually being withdrawn from the players’ bank accounts or credit cards, in efforts to keep the online poker room running smoothly.
Since the company would be unable to pay out any significant amount of player funds should they be requested, it was paramount to keep its insolvency under wraps. And that likely included keeping the information from owners of Full Tilt not in the know.
“Most of these guys on Team Full Tilt are friends of mine and most of them definitely didn’t know what was going on,” said Barry Greenstein.
“The big issue is when people found out what the problem was,” he added.
Barry Greenstein seems to give Lederer and Ferguson the benefit of the doubt when it comes to their intentions.
So the continuing payments to the owners could be interpreted as being motivated by good intentions, to avoid a scare that might result in mass withdrawals while the online poker room was trying to rebuild its assets.
“I don’t think anyone believes that the initial intent was to defraud the customers, it just worked out that way in their method of fixing the problem,” Greenstein continued.
Brunson agrees that while their intentions may have been noble, there were serious mistakes made by FTP’s management.
“I know they didn’t have any checks and balances in place which is understandable to me as a gambler because every business I’ve ever been in I never made the right decisions.
“Poker players don’t make good businessmen,” he said simply.
Lack of Regulation in the US Partly to Blame
Another point Brunson and Greenstein agree on is that the US government, while not complicit in the mistakes made by Full Tilt Poker, definitely set the stage for something like this to happen.
By cracking down on off-shore online poker rooms with the UIGEA legislation, but never outlawing the activity of online poker, the US government created a grey area for its citizens putting their money in the hands of unregulated online poker rooms subject to little or no oversight.
“I don’t think the government should be blamed for Full Tilt’s mistakes but it set up a climate in which poker wasn’t regulated and the potential for bad things happening was there,” said Greenstein.
And as far-fetched as Full Tilt’s management, or lack thereof, seems, the US government’s failure to capitalize on the online poker industry is just as mind-boggling, especially considering the country’s economic state.
“Economically there’s money in online poker and we shouldn’t be shipping that money out to other countries that house online poker rooms that cater predominantly to American customers,” said Greenstein.
“The money needs to stay in America and we need to be employing Americans.”
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