Full Tilt scandal & $731M deal
Full Tilt was called a 'global Ponzi scheme'; PokerStars settled for $731M and absorbed its rival.
After Black Friday, prosecutors alleged Full Tilt Poker had paid owners while owing players about US$390 million against only ~US$60 million on hand, calling it a 'global Ponzi scheme'. On 31 July 2012 PokerStars settled the civil case by forfeiting US$547 million and agreeing to repay foreign Full Tilt players (~US$184 million), a total of US$731 million, and acquired Full Tilt's assets. US players were later repaid through a DOJ remission process.
The Full Tilt case turned on the failure to keep player deposits segregated from operating funds. US Attorney Preet Bharara alleged the company had distributed hundreds of millions to insiders while lacking the money to cover players' balances, framing it as a Ponzi-like arrangement rather than a licensed, ring-fenced operator. The 2012 settlement resolved the civil forfeiture claims against PokerStars and Full Tilt without an admission of wrongdoing: PokerStars forfeited US$547 million, took over Full Tilt, and funded repayment of players worldwide. The episode became the industry's cautionary tale for why regulators now mandate the segregation and protection of customer funds.
The scandal made segregation and protection of player funds a core regulatory requirement worldwide, and consolidated online poker under a single dominant operator.
A teaching summary, not legal advice. Dates and figures are simplified for learning; confirm against the primary sources before relying on them.