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The San Francisco Chronicle featured an interesting piece on the current crisis surrounding Full Tilt Poker and its impact on the Internet gambling sector as a whole.
Last week, US Feds accused Howard Lederer, Chris Ferguson and Rafael Furst of defrauding thousands of poker players out of more than $300 million.
Last week, Lederer, Ferguson and Rafael Furst, another Full Tilt director, were accused by DOJ in a civil suit of defrauding thousands of poker players of more than $300 million. All three men are said to be owners of the site. There are reportedly 23 total owners, most of whom are poker pros and it is unclear at this time whether the DOJ will be pursuing others.
When the site was shut down last spring, it owed $390 million to players around the world but had only $60 million in assets, Michael Shapiro of the Chronicle noted.
Shapiro insists that online gambling in general operates in a “murky” environment. Truth be told, only a handful of big name sites of shut down in over a decade owing players money and we can count them on less than two hands.
At the dawn of online sports betting, Sports International shut its doors owing money to big time bettors who first discovered the world of offshore gambling. Sports International went online shortly before Intertops.com, a company that still thrives today.
A few years later, Aces Gold, another popular online sportsbook, shut down after the Super Bowl owing millions of dollars to players. In the whole scheme of things, recreational players had little exposure to this particular online gambling website.
The biggest game changer in the world of online gambling shutdowns was BetOnSports.com. When it was forced to shut down in the summer of 2006, BOS was the biggest online sports betting site catering to North American gamblers, at least in terms of space occupied (9 floors of the bustling Mall San Pedro in Costa Rica) and the number of employees (peaking well over 1000 at one point). BetOnSports advertised just about everywhere including a two-page spread in Maxim Magazine.
This year’s casualties were among the biggest we have seen in the industry to date. Full Tilt Poker was joined by Absolute Poker, which is still open to players outside the United States and continues to pay non-US customers, albeit slowly.
BetED.com was a relatively small online sports betting company that catered heavily to recreational gamblers. They were caught up in a sting operation set up by the Maryland US Attorney’s Office.
There is no question Full Tilt Poker’s closure is the worst this industry has ever seen. But the reality is that the vast majority of online gambling websites of the past that are no longer around today were either fly-by-night businesses that can barely get off the ground in today’s environment or companies that have been purchased by bigger better financed brands. Our friends at Bookmaker have acquired a few dozen of those over the past decade and all players were paid as a result.
- Chris Costigan, Gambling911.com Publisher
