In separate statements issued at the end of last week, both the American Gaming Association (AGA) and the Poker Players Alliance (PPA) took offense with US Attorney Preet Bharara’s use of the term “Ponzi scheme” when it came to describing the offenses of Full Tilt poker in the run-up, and aftermath, of Black Friday.
The main complaint has to do with the perception of online poker going forward, as the term could cause casual players and non-players to potentially view the online poker industry in the same light as Bernie Madoff. When the truth is that there is a perfect example of a well-run and reliable online poker room sitting right in front of their eyes in the form of PokerStars.
While the alleged fraud perpetrated by Full Tilt Poker does have some of the hallmarks of a Ponzi scheme –particularly in the way the site used incoming deposits to pay out their current customer base with a severe shortfall between the two—it isn’t a Ponzi scheme in the classic definition of the term.
Here is a look at what John Pappas from the PPA had to say regarding the Ponzi scheme allegations:
“This is a sad and disappointing day for American poker players,” read the press release issued by John Pappas, the executive director of the PPA. “If true, these allegations detail a massive betrayal of player trust which will cause financial hardship for thousands, if not millions, of individual poker players, none of whom are accused of doing anything wrong. We call on the Department of Justice to certify that the proceeds of any settlement or seizure that may result from this action will first be dedicated to reimbursing players. We further call on Full Tilt Poker, its management, directors and owners to take all available steps to ensure the prompt payment of players as their first priority.”
“We also issued a guide to our players which provided them legal guidance on what they could do to recover their funds,” said Pappas. “These new government allegations underscore the sincere need for Congress to act immediately to pass legislation that appropriately regulates Internet poker in the U.S. so that players can be protected from the types of abuses alleged by the Department of Justice today. Today’s news does not change the mission of the PPA – to make player reimbursements and effective federal or state licensing of Internet poker a priority.”
While the AGA’s Frank Fahrenkopf pointed to the current situation at Full Tilt poker as the most solid proof that the industry needs to legalized and regulated, saying, “How much money that we don’t know about is being swindled from US consumers and how long will it take before we change laws to protect these consumers?”
For more information on the PPA’s efforts to legalize and regulate the online poker industry you can visit their website at www.theppa.org
For more information on the AGA’s efforts to legalize and regulate the online poker industry you can visit www.americangaming.org