Apparently, Phil Ivey is suing FT.  This is terrible news for FT players.  Not because this would add to FT's legal woes.  But because this *probably* means we are not going to see our money in the near future.  I had been somewhat optimistic after the DOJ unfroze one of FT's bank accounts last month that we *could* see some money later this month [EDIT: Apparently this was just a rumor].  But alas... it looks like it could be *at least* another few months.  Because I would think Phil Ivey wold have had some conversations with FT before he filed suit.  If we were all getting our money in a few weeks, I think FT would have said, "Hey Phil...  you might want to hold off on that lawsuit."

And then I got to thinking about FT's finances.  The only thing I know about the company is that they have on the order of $400 million in revenues annually, pre Black Friday.  And for some reason, I thought they must've had like a billion or more in (player) assets.  I mean a lot of the high stakes players probably have 7 figures online, so why not?  But then, the more I thought about it, the more I began to think that maybe they didn't have that much in assets.  If most of their player base was like me (I'm not typical), their revenue (net rake) to asset ratio would be 8:1.  That is, I generate about $8 in rake (after rakeback and other benefits) annually for every $1 average balance I keep online.  Granted, that ratio puts me on the super-high side of the spectrum (I don't keep a  lot of money online).  I can see Tom Dwan generating far less rake than I, while keeping 200x more money online.  The higher stakes you play, the more you need to keep online - in case there's that juicy 10/20, 25/50 or 50/100+ game you want to play.  I would think most smaller stake players wouldn't need to keep much online (altho in practice, I know a lot of regs do).  So let's say for regs, that ratio is 1:1.  But for most non-regs, that ratio is going to be >>> 8:1 ratio - mostly because they are losing players and keep having to redeposit.  So if we just take 2:1 as the average of the player base, then based on a $400million rake figure, we might only be talking about $200mil in player deposits.  Um... Surely, FT has some non-seized assets somewhere? Even if Ray Bitar spent Charlie Sheen kind of money on hookers and blow, FT generates enough cash flow to cover $100million in a year.

I heard rumors that they had tens of millions of dollars in player deposits they never collected.  So obviously, we are dealing with a level of incompetence rarely seen in a multi-billion dollar company.  I understand that accounting is so bad at FT, that they are still trying to figure out how much they owe people (converting points, tourney tickets, etc.)  But seriously, WTF?!?  How long could that possibly take?  Considering how many people are VERY nervous, I think the LEAST they could do is say, "Hey!  We know you all are getting antsy about your money.  HOW ABOUT WE GIVE YOU HALF OF YOUR CASH BALANCE NOW TO MAKE YOU FEEL MORE AT EASE, UNTIL WE SORT OUT ALL THE OTHER DETAILS?  In a few months (end of the year, whatever), when that gets sorted out, we'll send you the balance."  This would take 90% of the nervousness and anger out of the system, and will avoid the "run on the bank" mentality that has already started to take hold.  There are obviously a bunch of details to be worked out (like paying 75% now would be even better, you probably only need to do this for accounts over a certain balance, maybe send a goodwill gesture so we'll come back one day, etc) - but I think FT needs to start sending some player money ASAP before they run that company into the ground.

Like the Great Depression analogy I used before, sometimes, even perfectly healthy banks would go under when enough customers asked for their money bank.  Right now, because of FT's incompetence, a lot of international players are feeling nervous about the company and have withdrawn.  That's a double whammy because not only are liquid assets being taken from FT, but those players aren't generating any more rake.  If they don't do something fast, they are in danger of dropping not only out of the #2 seat in online poker, but out of the top 5.  At the current 1 month pace, they will be with AP/UB in another 6 months.  At this point, they need to do is to restore confidence in the system.  Whether they owe someone $500 or $512.15 can be figured out later.