4 ms·

this is a perfect example of taking something that would normally be legit and because it is outlawed rules and regulations are flouted at best, a massive fraud

by ShawnJG 15y ago

this is a perfect example of taking something that would normally be legit and because it is outlawed rules and regulations are flouted at best, a massive fraud and corruption at worse. When I see cases like this, I was wonder how people involved but they would be able to get away with this if you look at the amount they supposedly had on deposit versus what they actually had it doesn't take an accounting major to know there is a huge discrepancy that you will unlikely be able to pay back. It's clear the poker sites make some money through ads and transactional commission but since people play against each other they don't benefit from the advantages a normal casino would have. Although people lose their money they lose it to the person across the table not to the "house". With this high-profile company now under a dark cloud of suspicion, they are definitely putting a big if not final nail in their coffin. With player bots, player collusion and security vulnerability in their systems people start to think long and hard before they wager money online.

mc32 15y ago
Financial "products" are regulated by the gov. That didn't seem to have the desired effect back in 2008. I don't think fraudsters care about regulation. They care that they can sucker people.
- notahacker 15y ago
  The financial crisis (and gambling losses at legitimate sites) weren't the result of bankers diverting investors' funds into their personal bank accounts, as is alleged here. That's illegal, and easily prevented at a regulated site where deposited funds are required to be accounted for (and preferably held in escrow). Regulation in banking or in gambling doesn't make it impossible to lose; it makes it possible for winners to get their money and impossible for the company handling the money to simply pocket it.
  - mc32 15y ago
    My point was that regulation and scrutiny didn't prevent the likes of a Bernie Madoff providing a financial product and running a ponzi scheme. In addition, the financial industry at large can legally provide all kinds of leveraged products which pass scrutiny and result in hefty bonuses (personal profit) but which can end with ruin for the individual and group investors because they are structurally unsustainable (i.e subprime lending had to come crashing). On top of that, the institutions which benefitted during the boom then turned around and asked the people to prop them up despite the questionable risks they took because the world could not afford to have them fail --we blinked.
    - Steko 15y ago
      Your premise seems to be that all regulation is the same. Correct me if I'm wrong but your argument essentially is saying: "financial products were regulated in 2008, well see how that worked out, therefore regulation doesn't really work well" Sorry I don't buy that. Financial regulations put in place during the great depression worked pretty good. Then they were slowly pared back over three decades starting with Reagan. All the evidence I've seen is that the financial products were massively under regulated.
      - mc32 15y ago
        I see what you are saying. I think regulation helps and it provides a way for redress. Those are good byproducts of regulation. I think my point was that bad people will still try to pull fast ones -regulated or not. I imagine the frequency of fraud could be reduced by regulation. So, from that standpoint it might be better to have it on the up and up and supervised -but supervised with a very keen eye and a regulation with teeth, as it were.
tptacek 15y ago
Note that in this case, you mostly get the "benefits" of legalization by including strict regulations in the package.
ShardPhoenix 15y ago
The poker sites make a large amount of money by taking a 5% rake on every pot played.
kooshball 15y ago
> It's clear the poker sites make some money through ads and transactional commission but since people play against each other they don't benefit from the advantages a normal casino would have. Although people lose their money they lose it to the person across the table not to the "house". You clearly dont understand how poker rooms, online or physical, operate. They take a rake from each hand regardless of winner. This article has nothing to do with the "advantages" of the house, more about accounting fraud that allow partners to cash out deposits from players.

by ShawnJG 15y ago

mc32 15y ago

Financial "products" are regulated by the gov. That didn't seem to have the desired effect back in 2008. I don't think fraudsters care about regulation. They care that they can sucker people.

notahacker 15y ago
The financial crisis (and gambling losses at legitimate sites) weren't the result of bankers diverting investors' funds into their personal bank accounts, as is alleged here. That's illegal, and easily prevented at a regulated site where deposited funds are required to be accounted for (and preferably held in escrow). Regulation in banking or in gambling doesn't make it impossible to lose; it makes it possible for winners to get their money and impossible for the company handling the money to simply pocket it.
- mc32 15y ago
  My point was that regulation and scrutiny didn't prevent the likes of a Bernie Madoff providing a financial product and running a ponzi scheme. In addition, the financial industry at large can legally provide all kinds of leveraged products which pass scrutiny and result in hefty bonuses (personal profit) but which can end with ruin for the individual and group investors because they are structurally unsustainable (i.e subprime lending had to come crashing). On top of that, the institutions which benefitted during the boom then turned around and asked the people to prop them up despite the questionable risks they took because the world could not afford to have them fail --we blinked.
  - Steko 15y ago
    Your premise seems to be that all regulation is the same. Correct me if I'm wrong but your argument essentially is saying: "financial products were regulated in 2008, well see how that worked out, therefore regulation doesn't really work well" Sorry I don't buy that. Financial regulations put in place during the great depression worked pretty good. Then they were slowly pared back over three decades starting with Reagan. All the evidence I've seen is that the financial products were massively under regulated.
    - mc32 15y ago
      I see what you are saying. I think regulation helps and it provides a way for redress. Those are good byproducts of regulation. I think my point was that bad people will still try to pull fast ones -regulated or not. I imagine the frequency of fraud could be reduced by regulation. So, from that standpoint it might be better to have it on the up and up and supervised -but supervised with a very keen eye and a regulation with teeth, as it were.

tptacek 15y ago

Note that in this case, you mostly get the "benefits" of legalization by including strict regulations in the package.

ShardPhoenix 15y ago

The poker sites make a large amount of money by taking a 5% rake on every pot played.

kooshball 15y ago

> It's clear the poker sites make some money through ads and transactional commission but since people play against each other they don't benefit from the advantages a normal casino would have. Although people lose their money they lose it to the person across the table not to the "house". You clearly dont understand how poker rooms, online or physical, operate. They take a rake from each hand regardless of winner. This article has nothing to do with the "advantages" of the house, more about accounting fraud that allow partners to cash out deposits from players.