Home / Poker News June 2011 / Does Full Tilt Have Enough Money to Honor US Withdrawals?
Does Full Tilt Have Enough Money to Honor US Withdrawals?
Posted by: Jo Martin - Thu, 2011-06-02 14:50
According to Phil Ivey it doesn’t, and that should worry US players quite a bit since their funds are in limbo at the site right now. In an ideal world, one would assume that player deposits are left intact by the operator. Money flows from one player to another, changing hands all the time, but if each and every player decided to cash out at the same time, the site could honor their withdrawals without problems, right? Well…the world that we live in, is far from an ideal one and thus the above described situation is much more complicated than that too.
According to Phil Ivey’s lawsuit (which we’ve covered in a previous news-piece of ours)
Full Tilt Poker did not keep enough reserve funds at hand to be able to pay US players their monies back in the wake of the Black Friday indictments.
What did they do with the money? Probably the same thing that banks, insurance companies and investment funds do: they re-invested the money in order to generate additional profits. Of course, they could have kept the money at hand, but that way, they would’ve deprived themselves of additional profits and we all know that in the
online poker industry, profit is king.
For bankers, there are government regulators who watch over how much liquidity the institutions keep at hand. There are also laws based on which these regulators can function.
In the case of online poker operations, the situation is a lot murkier. There are no known regulations requiring
online poker rooms to keep liquidity at hand and it is unclear where the funds resulting from player deposits were invested.
According to Ivey, the site owes around $150 million to US players, and it is becoming more and more likely that not everyone will get paid and that not all monies will be reimbursed in a 100% proportion.
Whether or not Full Tilt has indeed become insolvent remains to be seen…
