Do sites invest the money you deposit

[Cactus Cactus]

It seems like the online sites are making bigger and bigger limits, however in terms of a profitablity view, I can't imagine that these tables are too profitable when they (1) rarely go on (at some sites) (2) it is the same amount of rake, and (3) imagine the neteller costs.

I am wondering if the reason why the sites do this is to attract the players with bankrolls of 100K+ to deposit. Now with that money do they invest it?

[randomstumbl]

The same argument can be made about high limits at B&M casinos.

You're overlooking the one big benefit that these games offer: free advertising. A lot of casual players railbird the bigger limits online. If they start watching Ivey play 1k/2k, they're much more likely to deposit at Full Tilt when they start playing for real money.

The same arguement can be made about the Bellagio. People go there for a chance to see the big name players and end up playing 4/8 or blackjack since they're already there.

[BruinEric]

They almost certainly invest the money we deposit, either in a method which bears them interest, or by actually "investing" the money in their own business.

I would suspect that poker sites don't have cash-on-hand equivalent to all deposits on hand. If everyone rushed to cash out at once, they wouldn't be able to immediately settle.

Of course, this would be no different than banks here in the USA either.

[pyroponic]

Of course they invest it. Basically they just have in accounting terms "payable accounts," and probably invest the majority of the money which is now an cash asset on their site. They probably don't have to keep much cash on hand, as the rake devalues account balances over time and probably have lending aggreements setup so they can borrow if they need to convert many poker balances to cash on short notice.

[Mempho]

Yep, they invest it. It's usually listed as a liability titled "deposits on hand" or some other accrued liability. The cash in the bank will not come close to that accrued liability account.

[ADBjester]

PokerStars keeps 100% of player account balances in segregated accounts, and could pay out every penny even if every player cashed out instantaneously.

Your funds are always safe at PokerStars. All players' account balances are held in segregated accounts and not used for any operational expenses. These segregated accounts are managed by the Royal Bank of Scotland PLC, one of Europe's leading financial services groups.

[pyroponic]

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PokerStars keeps 100% of player account balances in segregated accounts, and could pay out every penny even if every player cashed out instantaneously.

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Your funds are always safe at PokerStars. All players' account balances are held in segregated accounts and not used for any operational expenses. These segregated accounts are managed by the Royal Bank of Scotland PLC, one of Europe's leading financial services groups.



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lol

[jedi]

[ QUOTE ]
PokerStars keeps 100% of player account balances in segregated accounts, and could pay out every penny even if every player cashed out instantaneously.

Your funds are always safe at PokerStars. All players' account balances are held in segregated accounts and not used for any operational expenses. These segregated accounts are managed by the Royal Bank of Scotland PLC, one of Europe's leading financial services groups.

[/ QUOTE ]

I believe they're not used for "operational expenses." But of course they're sitting in a bank or mutual fund or something else earning interest.

in many cases, the jurisdiction of license says how much money a site MUST have on hand to pay people in case of some type of liquidation event. in kanawake, for example, card houses aren't required to keep *any* of players' deposits on hand; in malta card houses must have *all* deposits always ready.

[Rudbaeck]

PS does the right thing here. Holding players money in escrow is the proper thing to do, and hopefully more and more gaming jurisdictions will enforce this.

Then there will be no more Dutch Boyds.