IS INSURANCE BETTER THAN FACT?

[THE SHRINK]

There are many different proposals out there to “insure” player deposits. Some involve a fund set up by the books, while others include an association that agrees to pay out in the event of a failure.


None of these insurance policies are going to work because it makes all the insurers equal, when in reality they aren't.


Why would Olympic, for example, want to be shed in the same light as Pan Am?


By getting into these insurance pools, you are making everyone who is insured equal. There is NO REASON for sports books like a Pinnacle, WWTS or CRIS to underwrite books that are equal or weaker than them.


The whole theory of insurance lies in the act that a few books are willing to cover weaker ones, and that is a recipe for disaster.


I would like to address another side of the safety issue which is cash flow.


The proposed plan would involve documenting that books have at least 10% of the Post Up balances in cash instruments. These would be limited to Neteller, Western Union, or like sources.


The idea is that a book would provide a list of player balances and documentation to show that at least 10% is available for withdrawel IMMEDIATELY.


While some may argue that 10% is not sufficient, it seems a very good first step and something that books should be able to comply with.


For those who argue for higher percentages, I don’t disagree, but many books will have a problem providing BANK info while Neteller and Western Union funds are easy to document and represent a books ability to pay current player liabilities...


Basically, this is contrary to a lot of ideas out there, but it is an IDEA that can be EASILY IMPLEMENTED without forcing books to cooperate with their competitors...


This site would simply list those books who supply BOTH their player balances and documentation that there is current cash flow equal to 10% of those balances.


Any and all feedback would be greatly appreciated...


Thanks,
THE SHRINK

 

[D2bets]

Shrink,

I respectfully disagree about the insurance concept you refer to. While Olympic et al may not want to be shed in the same light as a PanAm, I think they might agree to an association of a group of more established books, even if some are not quite as solid as others. (like SBR'S A- or better propsal). The reason is clear and it would provide all books in the association with a huge competitive advantage than no others would have -- namely, the ability to claim that they are "insured" and backed by a group of other top books and place a large banner on their site to this effect. Naturally the stronger and safer they can make it appear the better. Some outside auditors and/or established insurance companies would be helpful. A major barrier to getting squares in the door is their fear that online books are not safe. This concept wouldn't satisfy all, but it would bring the book unsophisticated players that neither they, nor anyone else, would otherwise get.

The key of course is in how this would be implemented, but conceptually it could work well IMHO. Time will (or may) tell.

 

[SGA]

Shrink,
I would like to make a few comments on your post. First, as you stated there are many proposals currently being offered to help secure the players' funds. This has to be seen as a positive step. Whether one of these plans turns out to be better than another or if two or more plans all succeed in different ways, it will be much better for the player than it ever has been in the past. Next, you go on to say that for different reasons none of these plans are going to work because it makes all of the members equal when in reality they are not. You state 'Why would Olympic, for example, want to be seen in the same light as a Panam'? I ask you why would an Olympic want to advertise at a site that advertises a Panam as well? If a new player visited one of the more popular forums to help aid him in making his decision on where to send his money and was ultimately stiffed by the book he choose that advertised at that forum, would he not also lose faith in other books who advertise with that same forum?
Finally, you go on to say that "There is NO REASON for sports books like a Pinnacle, WWTS or CRIS to underwrite books that are equal or weaker than them". In answer to this I would like to say that the reason some of the upper ( at least currently percieved as upper) level books might see the benefit of securing the very industry that they are seen as leaders of is by offering all players the security of knowing their funds are protected they will see much more growth in the offshore gaming industry. And as leaders in that industry the added influx of new players will benefit them because they are leaders for a reason. It is their customer service, their fast payouts, their no nonsense rules, and many other factors that these upper level books excel at which has aided them in reaching their current status. I do agree that some discretion would be needed as there are some books who are outright thieves and the sportsbooks who are not should have the control to not allow them to be covered. In conclusion you go on to mention cash flow. I can not comment on this as our program does not involve the members to prove their cash flow. However, I do believe a program that does require this also has a lot of merit. As of right now there is not only a lack of a perfect plan for securing the players' funds but there is NO plan and the lack of some type of real protection is the only plan that CAN NOT WORK. I hope all the forums, sportsbooks, and players can work together in a positive way and understand that we all have a lot of interest in this industry and any steps we make as individuals or as a group are positive steps and will aid in the growth of "our" industry. Thank you for your time and I apologize for the length of this post.

Respectfully,
SGA

 

[wilheim]

D2bets - Good points but having a group of the super strong books insured is financially redundant. Take the top 5 (we pretty much know who they are) is anyone really concerned about them going the BetPanAm route? What is needed is protection for players at the not so well established but still competitive books, (like SBR's B's and C's). This is where we run into the "why should I get invovled" problem of the strong and the not so strong. I certainly hope something can be done to avoid any further book failure, unfortunately I am not sure what that might be.


wil.

 

[Journeyman]

The really great books would never do this...why would they want or need to be grouped together? They got there by doing things the right way, why take a step back to assure smaller books?
All they really would be doing is possibly helping their competitors gain a piece of the pie...

 

[D2bets]

wil, it may be redundant to people like you and I, but to less sophisticated newbies it would provide a needed and added level of protection that others couldn't offer. From my selfish point of view, I agree, I'd like to see the "lesser books" be insured, but this is obviously a bit more tricky. If the "bigs" successfully grouped together like this, it may in fact continue to strengthen themselves at the expense of the smaller books.

Journey, if all of the books who already eat a lot of the pie group together then they would really all be helping themselves to an extent. It has the possibility of being a win-win if done right, but it has a lot of risk if done wrong.

 

[Buzzsaw]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> (like SBR'S A- or better propsal). The reason is clear and it would provide all books in the association with a huge competitive advantage than no others would have <HR></BLOCKQUOTE>If nothing else, its a good starting point. Good post by D2.

 

[jerseymike111]

If a good book is willing to insure my acct.I would rather have my acct insured.
To me it's as simple as that!

 

[SGA]

All,
I would like to comment on something D2 said, 'Journey, if all of the books who already eat a lot of the pie group together then they would really all be helping themselves to an extent. It has the possibility of being a win-win if done right, but it has a lot of risk if done wrong'.
I agree that if all the strongest books worked together to the exclusion of the next level of books they would get a bigger piece of the pie. However, it will be the same size pie. If more books work together the whole pie would grow by many new players. This is what the so called upper level books need to realize. Secure the industry and the industry will grow exponentially. With this new growth the upper level books will continue to be leaders and in so doing will see all of their individual client bases increase. The big picture has to be kept in mind.

SGA

 

[chips]

This whole concept is a complete joke! Why in the world would Pinny, Oly and Cris want to insure that other books dont go down??? They are competing with the same books, so you expect them to stand behind weaker books so you can send your money to the weaker books and not to Pinny, Oly and Cris???? LMAO. The reason the better books get the money is because people feel safe with money there!

 

[drunkguy]

This sounds like some more spin doctoring identical to what happened after the Gamblers Ave collapse. "Let's all sit around and jerk each other off and propose solutions and wait until everyone forgets about it".

Talk is cheap.

The few legitimate chances at a plan that have been floated out there have been SHOT DOWN by the "powers that be", for reasons that seem at best to be motivated by politics, power struggles, and greed.

Will this change anytime soon? Not if the current "watchdogs" have anything to say about it...everyone has to start opening their eyes and realizing that the whole forum financial model is built on the risk inherent in the industry. No one that has their hands in the pot is going to work to change it...

 

[Jazz]

Without delving into this specific concept, what is so bad about the site that accepts advertising revenue from sportsbooks from requiring them to post an escrow account (or bond) in the amount equal to the amounts received by the book from people signing up through that site?

Seems to me that if the Rx is making money by posting "Cactus Jack's" banner that they could require that site to post up to the Rx the same amount that Rx-referred account holders are posting up at the book. In other words, it would now make it absolutely imperative that a site accepting advertising revenue insure the players' accounts which it was responsible for creating in the first place, which would have the effect of ensuring a site accepting advertising vetted the SHIT out of a book desiring to advertise there.

 

[Jazz]

Drunkguy:

"This sounds like some more spin doctoring identical to what happened after the Gamblers Ave collapse. "Let's all sit around and jerk each other off and propose solutions and wait until everyone forgets about it"."

Well said.

 

[drunkguy]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Jazz:
Without delving into this specific concept, what is so bad about the site that accepts advertising revenue from sportsbooks from requiring them to post an escrow account (or bond) in the amount equal to the amounts received by the book from people signing up through that site?

Seems to me that if the Rx is making money by posting "Cactus Jack's" banner that they could require that site to post up to the Rx the same amount that Rx-referred account holders are posting up at the book. In other words, it would now make it absolutely imperative that a site accepting advertising revenue insure the players' accounts which it was responsible for creating in the first place, which would have the effect of ensuring a site accepting advertising vetted the SHIT out of a book desiring to advertise there.<HR></BLOCKQUOTE>

Jazz-

I too was apparently misled into thinking this is a decent idea. I have yet to see any good reason why it is not, but apparently it just is and that's that. It is also apparently illegal when it involves Neteller in any way. And god forbid anyone do anything of questionable legality around here...

 

[wilheim]

Jazz - There is absolutely noting wrong with a "site that accepts advertising revenue from sportsbooks" to post up funds in an escrow account, IF that site prefers to. In fact it would be quite a marketing tool. Tell Olympic we referred you and we will post up an amount equal to your deposit in an escrow account. As a player who sees Olympic, or any other sportsbook for that matter, advertising on at least 4 or more web-sites, I would be foolish not to say the escrow site referred me. The concept has always been one any watchdog or gambling portal site has had available to them. The real question is why has'nt anyone done it. Perhaps you have the answer, quite honestly I do not.


wil.

 

[Jazz]

Well fu-ck Netteller then! Let's use E-gold - Phaedrus has been around recently talking about that - lol. As far as having to use Netteller, seems to me a Swiss or Cayman Islands account would serve fine.

 

[Jazz]

Cool, Wil. But I believe I do have the answer, excepting Olympic (not many are asking for that kind of protection for Olympic, as you know): "Perhaps you have the answer, quite honestly I do not"

The answer appears to be that a site accepting advertising revenue from any book other than a blue-chipper (like Olympic or Pinnacle) in no way wants to accept the risk that the said book will do a 'blue marlin'. In other words, putting a site at risk for encouraging people to send their money to a book that might not make it would be akin to Marlboro paying the hospital costs of long-time smokers with emphysema (like my father who suffocated to death with it in front of me). Point is, they know better.

 

[neilm]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by THE SHRINK:
I would like to address another side of the safety issue which is _cash flow._

The proposed plan would involve _documenting _that books have at least 10% of the Post Up balances in cash instruments. These would be limited to Neteller, Western Union, or like sources.<HR></BLOCKQUOTE>

Ken,

You can't be friggin serious. 10%??????????

Off by one lonely digit. Try 110%.

 

[wilheim]

Jazz - Actually that is my very point. The concept (escrow) has always been available but no watch-dog or gambling portal is going to play insurance man for sportsbooks when they really have no idea how financially sound they are. So we are back to square one, how does the industry regulate itself? How does it prevent Aces Gold and other debacles in the future.

BTW. My dad died from Pall Malls in his early 50s of throat cancer.

wil.

 

[Jazz]

Wil - about your Dad, then you know what that feels like - nuff said.

The 'industry' sincerely doesn't give a freaking shit about 'regulating itself' - why should they?? In this environment, if they do well, banzai - they don't have to pay a lot of taxes. If they don't - banzai, they simply fu-ck over the players and split. What's NOT to LOVE as far as the books are concerned about this situation right now? The problem lies with the PLAYERS. PLAYERS cannot enforce regulation by themselves, unless improbably they were to form a gigantic union - no, the only hope of regulation is on a group-by-group basis right now, based on Internet sites like this one who are accepting advertising revenue from sportsbooks in exchange for implicitly and/or explicitly promoting that book to the site's members, as well as any other revenue a player's new account may offer.

Let's be honest - if you told me I had the choice of the following, which would I choose?

(1) Accept $15,000 advertising fees from Yellowfin Tuna Sportsbook with no strings attached

(2) Accept $15,000 advertising fees from Yellowfin Tuna Sportsbook but require them to post on a daily basis the amount that players who signed up from my site deposited there, as insurance against their going belly-up

As to the technicalities, I'm sure a BANK could be called on to hold the cash in a verifiable account.