The Myth of the Rich Pro
Last week, a fantastic article by the donation (not affiliate) funded poker news site Subject: Poker examined the financial relationship between Full Tilt and two of their sponsored pros, Phil Ivey and David Benyamine. The report by Noah Stephens-Davidowitz was eye-opening to put it mildly.
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Based on data provided from an anonymous source, Subject: Poker was able to open the curtain a little on the inter-workings of Full Tilt. What they learned is that Full Tilt was directly loaning money to players; from June 2009 to April 2011, Phil Ivey borrowed more than $10 million from the site repaying only around $5 million of that money in that time frame. This lends considerable credibility to Full Tilt's claim that Ivey owes the site money.
Subject: Poker was also able to demonstrate that David Benyamine's rakeback and hourly payments as a sponsored pro were being deducted from his account the day that he received them. This was the case all the way up to Black Friday which suggests that Benyamine, like Ivey, also owes the site money.
Ivey and Benyamine are just two of the 173 (former) sponsored pros at Full Tilt. It seems unlikely that they were the only two players receiving loans from Full Tilt. Odds are that a few, or even several other players were also receiving loans from the site. If a sizable number of these loans are still outstanding, it would help to explain why Full Tilt's coffers are apparently empty.
To speculate a little further, it also seems possible that Full Tilt was granting these loans from money they didn't have (ie: printing money basically). It seems very possible that the company's existing financial woes are the result of basically a giant ponzi scheme in which they were creating more money than they were taking in via deposits. The site was founded by TV pros and ran for the benefit of TV pros. These guys' whole lives have been predicated on things always going up, up, up. It doesn't seem too ridiculous to believe that Full Tilt owners were willing to assume they'd eventually receive the necessary deposits to make up for money they were loaning out to players. However, the dust is far from settling on the Full Tilt saga; it could take years before we know exactly what happened with poker's Enron.
Taking a few steps back, let's re-examine one of Subject: Poker's major findings: Phil Ivey was getting loans from Full Tilt! Why, one might wonder, would a guy who has very possibly won more money playing poker than anyone in history, not to mention a guy who receives fabulous compensation via endorsements, need to borrow money from his sponsor? The answer is very possibly because Phil Ivey is basically broke. Yes, that's right. A guy who a year ago most people assumed was worth in excess of $100 million may be busto.
If Ivey is indeed busto (or even just worth less than $10 million which would basically be "busto" relative to how wealthy people perceive him to be), how could it be possible? It's hard to say for certain. Rumors have existed for a long time in the poker world about Ivey's addiction to craps. I can recall talking to a poker reporter my very first year at the WSOP in 2005 who told me that Ivey blew his entire $635,000 score from winning the $5,000 PLO event at the craps table that night. At the time, I was horrified and didn't believe it. But the reporter assured me that Ivey has an insatiable thirst for pit games.
For a moment, let's pretend these rumors are true. Let's pretend that Ivey has been a degenerate pit game loser for several years. Could it then be possible that his tens of millions of winnings from poker have all been given back to casinos via pit games? Sure it could! If you bet high enough, often enough, and dumb enough, it's not hard to blow 7- or even 8-figures in equity to a casino over the course of several years.
Ivey and Benyamine are just two examples of high stakes players who, evidently, have quite a bit less money than one may be led to believe from observing their poker careers. The Subject: Poker article was huge not just for unveiling Full Tilt's operating methods, but also for providing some evidence to support those who have suggested there is considerable dissonance between the image of some poker pros (rich) and the reality of their personal finances (busto and in need of loans).
To name names of other players who may be in a similar situation would just be irresponsible speculation. We can't do that. But what we can do is make a blanket suggestion that these "wealthy" TV pros are not nearly as loaded as the masses have been led to believe. Pit game degeneracy, lavish spending habits, and selling a majority of their action to other players are just a few ways that players who appear to be worth a ton of money may actually be broke.
The Subject: Poker article confirmed what plenty of people have speculated for years: on average, these guys don't have nearly as much money as the casual poker fan has been led to believe they do.