Full Tilt Poker Site Accused Of Cheating

The Manhattan U.S. attorney's office accuses the online poker site Full Tilt Poker of cheating. The government complaint accuses the off-shore poker company of using money from ordinary players to enrich its own board of directors, which includes some of the biggest names in the sport.

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The online gambling site Full Tilt Poker stacked the deck against ordinary players. That's what the U.S. attorney in Manhattan alleges in a federal complaint filed yesterday. The government accuses the offshore poker site of using money from players to enrich its own board of directors. NPR's Joel Rose has the story.

JOEL ROSE: Until it was shut down by the feds in April, Full Tilt Poker took real money from players who used the website to gamble against each other and the site built awareness for the brand with instructional videos like this one featuring some of the biggest celebrities in poker.

CHRIS ROSE: I'm Chris Rose, joined once again by the professor, Howard Lederer, and look at this roundtable we have in store for you, led first of all by the 2004 poker player of the year...

ROSE: According to the government, those celebrity players were among the big winners. The complaint charges that Full Tilt Poker took in more than $390 million from players around the world, but instead of holding onto that money as it promised, the company paid out even more money, some $440 million, to its board of directors.

US Attorney Preet Bharara described that as a, quote, "global Ponzi scheme." That accusation continued to reverberate through the online poker world today.

John Pappas directs the Poker Players' Alliance, a nonprofit that lobbies to legalize online poker. Pappas says the alliance worked with Full Tilt Poker until April on recruiting new members.

JOHN PAPPAS: If true, these allegations, we believe, detail a massive betrayal of player trust. Ponzi scheme, fraud, whatever you want to call it, it's really a blow for the individual poker players.

ROSE: Even if the allegations are true, Pappas and others insist Full Tilt is an outlier in the online poker world where a company's reputation counts for a lot.

LAWRENCE WALTERS: If this was a pervasive problem in the industry, the industry would cease to exist because no one would send their money to people who aren't properly allocating reserves.

ROSE: Lawrence Walters is a Florida attorney who represents other online gaming companies. Walters thinks the Full Tilt case underscores the need for Congress to create a legal online poker industry inside the US, one that could be effectively regulated like the casino industry.

WALTERS: This cries out for legalization. This illustrates the reason why the Department of Treasury or some other agency in the United States government should be regulating, overseeing, licensing and permitting the online gaming industry.

ROSE: Efforts to legalize and tax online gambling have so far stumbled in Congress. A lawyer for Full Tilt Poker declined to be recorded for this story, though he insists the company is not a Ponzi scheme, but a real business with legitimate infrastructure.

Joel Rose, NPR News, New York.

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