Addressing Questions from NoahSD

Oct. 24, 2011, Posted by Brandon.Adams

Addressing Questions from NoahSD

A response to questions from Noah Stephens-Davidowitz of Subject Poker -----

Noah’s questions are in bold. 

Your Tweet/Blog Post

1) What did you mean when you tweeted "Full Tilt is run by much more honorable people than Pokerstars. So you're money is much more likely to be safe there." ? Did you believe what you were saying at the time, and if so, why?
2) Did you have any specific knowledge of PokerStars that made you think that it was not run by honorable people or any specific knowledge of FTP that made you think that people's money was safe?

Yes, clearly I believed that at the time. 

Regarding that specific tweet, I’ve been hugely surprised that it’s caused a strong negative reaction in the poker community. 

I’d never previously viewed tweets as something that one had to be publicly accountable for; I’ve always viewed them as brief, throwaway messages.  

Anyway, I’m generally not very careful with my public statements, much less my tweets.  I’ve written a short novel called Broke, the primary theme of which was gambling addiction.  I’ve talked about Adderall and other performance enhancement substances with Katie Couric on 60 Minutes.  I’ve written forty or fifty poker columns for Bluff and other publications, often on controversial subjects.  I’ve spoken my mind on and other forums for over five years; I’ve blogged frequently about testy subjects in poker, economics, and politics; I’ve rarely turned down a poker interview and I will field most questions; I have more than a thousand tweets on any number of subjects.  I suppose it is assumed that since I’ve taught Harvard economics classes for eight years, I would be careful and calculating in my public statements, but the reality is simply that I am not.  

I addressed my comments about Pokerstars in a forty-minute interview with Andrew Feldman on the Poker Edge podcast in June 2011.

I wasn’t really familiar with the term “trolling”, but now I see that it means something like “throwing someone under the bus without strong evidence”.  I suppose that I’m guilty of this with regard to Pokerstars, and I am sorry for that.  In general, I almost never criticize people publicly.  

The idea that my public statements have been “bought” by Full Tilt is laughable.  I’ve always spoken my mind.  Anything I’ve said in support of Full Tilt or the people involved with Full Tilt, I’ve said because I believed it at the time.  I’m not an owner of Full Tilt and my deal there was only marginally better than the standard deal of $35/hour plus rakeback. 

I cannot recall the specific situation around that tweet.  I’m often a bit spewy on Twitter – I won’t post for a week or so, then I’ll get bored and fire off 50 or more posts in an hour, often at inopportune times.  The tweet in question came during one of those spew periods.  Whether it was standalone, or part of a longer message, or an answer to someone’s question, I do not know. 

In addition to containing an egregious misspelling, my tweet was poorly worded; “honorable” was a terrible phrase to use.  I suppose that, with the message, I was trying to convey a few different things.  First, I knew the Full Tilt people well and I trusted them.  Second, I had met important people at Pokerstars who had rubbed me the wrong way.  I’ve never met Isai, and I won’t elaborate on this, but I’ve encountered people at Pokerstars whose worldview scared me.  Third, it was my view at the time that Full Tilt owners would pool together to meet player obligations, and I thought this alone would make Full Tilt the safer place for player’s money.   

Regarding this third factor, I thought that it was possible that the Department of Justice would apprehend Isai, owner of something like 90% of Pokerstars, and, if that happened, it wasn’t clear to me who would be there to make good on Pokerstars’ debts.  The way things actually transpired was, of course, polar opposite to the way I predicted; Isai was fully a man of his word and he was not apprehended, and Full Tilt deposits now look to be nearly worthless. 


3) What did you mean on your blog when you posted the following on June 8th, over 2 months since PokerStars had repaid US customers and while FTP had still not repaid, had ceased communicating about the issue, and was failing to process withdrawals to non-US players as well:

“The poker world rightly praises Pokerstars for its extreme efficiency in funding US withdrawals. I’ll admit that Pokerstars is, in a certain way of looking at the world, the perfectly run poker organization. It’s the most efficient and ruthless rake gathering machine ever created. I can admire that, I guess, but my heart is with Full Tilt. They’ve made amateurish mistakes at times, but Full Tilt is an organization run by poker players, with sympathy for the wellbeing of the overall poker community.”

 Overall, I regret this statement, though I believe that it comes off as less extreme if viewed in the context of the entire column .  In retrospect, this post looks like the market equivalent of being overly committed to a losing position. 

Any intelligent reader knows what I’m trying to say with this passage.  To put it in Breaking Bad terms:  If you happened to be a drug addict, who would you rather get your stuff from, Jesse Pinkman or Gus? 


4) Did you have any knowledge at that time to support that claim?

Yes:  6 years of watching Full Tilt owners conduct themselves admirably in a wide variety of difficult situations, personal and professional. 

I can’t stress this enough:  the recent revelations about a funding shortfall at Full Tilt came as a complete and utter shock to me.  


Dean Stuff/Your Knowledge of FTP

I guess your official response to the Dean thing is this:


Originally Posted by wins_pot   

Dean, we've chatted once live, lifetime, and I never said anything remotely like this. The one time we chatted, we were in the presence of many others.

But you then posted a long chat log that you had with Dean, including lots of things that referenced other conversations that you guys had apparently had and you sharing your cell phone number with him. So, I'm not sure what you were trying to get across with your statement that you only talked to him in person once and your posting of chat logs, since Dean says that the conversation happened on the phone.

 I recognized Dean as a kindred spirit; an academic type who had a bit too much edginess in his personality to be fully at home in an academic setting.  I met Dean in July 2006, in the presence of academics cut from a similar mold.  I believe that we spoke only once live:  in July 2006, over several hours, in the presence of many others. 

 I strongly deny the quote that Dean recollects.  I believe that I did not say anything like this.  He claims that I said the following:

 Dean’s Post

 Before the events of the past few months I'd only ever once heard rumours FTP was a 'ponzi' scheme, and that was a while ago ...

I met Brandon Adams at the 2006 WSOP, while working as an RA on an experiment carried out in Vegas. Brandon and I exchanged contact details. A couple of months later he phoned me to ask for my assistance in getting a friend to write the foreward to a previously published book of his that was rewritten and getting republished. We got talking and I mentioned playing on Full Till. He said (paraphrased obv)

'No dude, don't play on Full Tilt. I know people involved with it and they just use the money to pay the existing owners. Play on Stars, it's much safer.'

I guess I didn't believe him since I kept playing, but I did find it strange when he signed as an FTP pro. I also found it strange that he made the quote in the OP. It's possible there's an innocent explanation, but I find it unsettling that he hasn't posted in this thread.

Brandon would you care to come in here and let us know what exactly you knew of the financial situation of Full Tilt Poker and when?


I believe, strongly, that the details and spirit of this quote are entirely wrong. 

That said, and I recognize that this in a similar vein to my “Twitter spew” defense, I have been out for long dinners with poker players perhaps five hundred times, and I’m quite sure that the cumulative transcript of these dinners could not bear careful scrutiny. 

I previously posted the entirety of my email/chat correspondence with Dean on twoplustwo.  Most of this has since been removed, for understandable reasons.  Dean claims that we have had conversations by phone as well; this might be true, but I don’t recall any phone conversations.  The record of our online conversations suggests that most of our online conversations occurred in July 2007, a year after we met, and after I was already sponsored by Full Tilt (I started just after the 2007 Main Event).  Dean suggests that the relevant conversation occurred in Summer 2006.  Perhaps we had a phone conversation at this time where some extreme miscommunication occurred, but I definitely don’t recall such a conversation. 

So, perhaps you should just directly answer these questions:

1) Do you remember having such a conversation with Dean? If not, could you imagine yourself having said something like that to Dean given your views/knowledge of FTP back then?


   No, honestly I cannot, because that was not close to my beliefs.  The pre-Black Friday low in my faith in FTP came after I was sponsored, when an FTP owner owed me a large amount personally, but he paid me within a month.  The timing of this corresponds roughly with the timing of my online chats with Dean, so it’s an outside possibility that we spoke about this personal debt over the phone, though I’m sure I would not have revealed the name of the specific individual involved.  Emphatically, though, I never believed Full Tilt to be anything like a Ponzi scheme.  I would have instantly removed myself from association with Full Tilt if I had learned that they didn’t have customer deposits on hand for even a short period of time. 

2) In particular, what was your opinion of FTP back then? What was your opinion of Stars? And what did you know back then about their handling of player funds?

 I thought that both companies ran good operations and kept 100% of player deposits on hand at any given time.  If pressed, I would have said that their assets were a multiple of player deposits.  It was my belief that these companies printed money.  They have some of the best economics that the business world has ever seen. 

The really shocking thing about the FTP scandal is not that the owners paid themselves $400 million; it is that FTP only made $100 million over the life of their business!  This is remarkable, and it suggests a level of incompetence or theft or both that defies imagination.  This is a company that raked up to $3 million a day.  Most owners never considered for a minute that their dividends came from customer deposits.

3) If your opinion was similar to what Deans version of events implies, why did you post something that said the exact opposite on April 16th on Twitter and the follow-up blog post on June 8th?

As mentioned, my opinion was wholly different than what Dean’s recollection of events implies. 


4) When did you learn of FTP's insolvency?

 At the time of my tweet, my belief was that Full Tilt had never been negative equity for even a short period. 

Within a week of the tweet, it became apparent that player withdrawals would be slow.  At this point, I strongly suspected that Full Tilt was negative equity.  

At that time, I believed the widely circulated rumor that over $100 million was seized in conjunction with Black Friday.  This rumor was widely believed by people associated with Full Tilt.  I believed that it was these seizures that pushed Full Tilt into negative equity.  We now know this to be false. Recent evidence suggests that Full Tilt in fact only had a total of $65 million on hand two weeks before Black Friday.  This number comes from the DOJ and is probably a lower bound (known deposits).  It might be revised upward over time, but for now it represents our best estimate. 

5) When did you learn that they didn't segregate player funds?

I only learned about the lack of fund segregation after Black Friday.  As mentioned, I assumed that Full Tilt made insane amounts of money and had plenty on hand to cover player deposits (fully) as well as ongoing expenses. 

6) When did you learn about the e-check debacle/shortfall/backlog/whatever you want to call it?

 Not until after Black Friday.  That’s one of the worst business decisions I’ve ever heard of, and I have no explanation for it.  I’d heard of stories about unfunded  deposits, but I would have never guessed that they were a matter of policy and amounted to $100 million or so.  I thought they were isolated instances resulting from payment processing seizures.  I knew (along with many observers) that the government was more aggressive about these seizures starting in late 2010 or early 2011. 


7) When did you learn that owners were paying themselves with player funds?

Not until after Black Friday.  The scope of things was not apparent to me until the DOJ’s civil indictment against the FTP Board came out recently.  I had never thought carefully about it, but my belief was along these lines… FTP raked about $3 million a day, meaning that their gross was around a billion a year.  Intuitively, their margins should be quite high, at least 25%.  This means that their profit would be $250 million.  The week before Black Friday, if I had to set a line on the five-year cumulative profit of FTP, I would have said $700 mill.  If asked to set a line on the amount paid to owners, I would have said $250 mill.  Those answers would have implied assets on hand equal to player deposits plus initial owner contributions plus $450 million.  Obviously, my beliefs were very far off the mark. 


Originally from New Orleans, Brandon Adams entered the Doctorate in Business Administration program at Harvard Business School in 2001 (he went ABD in May 2004).  Brandon taught eighteen courses at Harvard, including twelve sections of “Behavioral Finance” and two sections of “Fun and Games” (game theory).  Most recently, he taught four sections of “The US in the World Economy,"in 2009 and 2010. 

He’s been a regular in the biggest poker games held over the past five years.  He's played on High Stakes Poker, Poker After Dark, and numerous other televised cash games and tournaments.  Adams is the author of the self-published Broke: A Poker Novel.  He is also the Founder of, a digital business that uses the internet’s sweet spot – disintermediation – to connect experts in all fields with those who need consultation services.

Have Your Say

Tell us what you think...

(will not be posted)