A question for Posters regarding Trust and Escrow accounts.

PariActionOffice · Aug 4, 2003

One of the other sides of the coin regarding trust accounts is that if a book were starting out and putting players money into trust, there could be times that they would be underfunded in Neteller and SecureBuxx etc. The reason is that they have to keep more than 100% of their money in a managed trust account. Contrary to popular opinion, offshore bank wires do not happen instantly and the process normally takes between 72 hours and as long as 15 days, depending on the bank and the jurisdiction. If a managed trust account requires various signatures etc. and there could be delays funding e-commerce transactions if there were a run on the bank (like we saw recently at majorbatting). Also if an e-commerce company like Neteller had problems or their assets frozen, it is risky to keep too high of balances there.

My question is. What is more important, having the money secured in trust or having money available for instant e-commerce transactions.

[This message was edited by RPM on August 04, 2003 at 03:15 PM.]

lander · Aug 4, 2003

Keep you money at Pinnacle & you won't have to worry about ANY problems.

chips · Aug 4, 2003

Escrow/Trust means dick!!

Immediate payouts is what counts!

TheGeneral+ · Aug 4, 2003

I would think any solid financial management would account for both sides. Would a book not have atleast 25% of the total asset on top, therefore allowing that 25% to sit in money processors, and 100% of the players money in trust.

I know that is not the case, but it should be something like that. The book should be able to support both ends if they have good honest management and a real desire to take care of players.

PariActionOffice · Aug 4, 2003

125% does not cut it if you include operating expenses , marketing etc. It takes about 225%

Chips,
Escrow accounts keep the OWNERS from raiding the till and this is the #1 cause of sportsbook failures...

[This message was edited by PariAction Office on August 04, 2003 at 04:19 PM.]

jjgold · Aug 4, 2003

escrow accounts mean nothing period.

We just want to get paid when we win and one of the best books in the world pays so fast and any amount and has no escrow accounts, ect and the book is Grande.

Also great payers like Cris, Hollywood, Canbet, Pinnacle and Greek have no escows, ect.

Dante · Aug 4, 2003

Instant Payouts, IMO it is more important to have the neteller fully funded

PariActionOffice · Aug 4, 2003

So, is it the consensus of posters at the RX that sportsbooks should not put players' money in trust acocunts?

TheGeneral+ · Aug 4, 2003

I wouldn't say that we do not want them. It is so hard to trust that they are really beneficial. I am skeptical about whether the trust accounts are any safer than non trust accounts.

Im sure others feel the same.

TTinCO · Aug 4, 2003

Good point General. If trusts really don't guarantee anything, they are pointless.

In the end, players will DEMAND liquidity & quick payouts-as dumb as it sounds, this is probably more important to the majority of players than anything else.

PariActionOffice · Aug 4, 2003

I thought that this post and dialog would have been welcomed here, but I was wrong. I do not want to be accused of being a shill, so I will not reply here but will on other sportsbook forums.

TheGeneral+ · Aug 4, 2003

PariAction Office,

The topic was put back because we do want to discuss. Please continue. Your questions are valid. What are you getting at?

THE SHRINK · Aug 4, 2003

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by PariAction Office:
I thought that this post and dialog would have been welcomed here, but I was wrong. I do not want to be accused of being a shill, so I will not reply here but will on other sportsbook forums.<HR></BLOCKQUOTE>

Pariaction,

WHO said your post on this thread isn't welcomed here?

And I don't believe anyone is accusing you of shilling either...

THE SHRINK

PariActionOffice · Aug 4, 2003

Ken,
The thread was MOVED to promotions!!!

In the thread:
http://therxforum.com/6/ubb.x?a=tpc&s=100090022&f=988094022&m=34310133

RPM (a moderator) stated:

ok, ill put it back ttin. ill give it the benefit of the doubt this time. but looks like nothing but a allworld shill post to me...

I really had no intentions of using this to schill but I thought that it was a very valid issue in light of some recent events and for the industry in general.

PariActionOffice · Aug 4, 2003

My point is that by the very NATURE of trust accounts, liquidity is reduced...

Samurai · Aug 4, 2003

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by PariAction Office:
125% does not cut it if you include operating expenses , marketing etc. It takes about 225%<HR></BLOCKQUOTE>
What do operating expenses and marketing have to do with players' postup funds?

Every book should have at least 100% of players funds (deposits + winnings) readily available simply because IT'S NOT THEIR MONEY. Books are the temporary custodians only, and should be accountable for ALL the monies they are holding on behalf of the players. In addition to having all the players funds, books also need money for operations, but that is a separate issue and shouldn't be mixed in with trust accounts.

I read where Canbet keeps 150% of players' funds in a separate account. That may be more than necessary, but I don't think asking for 100% in a trust account and another 25% readily available for funds processing is asking too much.

The question here is not whether players want easy access to their money OR trust accounts. All else being equal, the books that offer both will end up with a lot more players than those that offer one or the other, and those that offer neither will eventually disappear.

[This message was edited by Samurai on August 04, 2003 at 03:54 PM.]

TheGeneral+ · Aug 4, 2003

It is a valid issue, so let's continue

Your last question is interesting coming from you pariaction. Do you feel we need trusts/escrows? Hopefully we get more answers from the players/posters.

Samurai · Aug 4, 2003

If a book doesn't have enough capital to cover all their operating costs plus potential losses, while keeping 100% of the players' postups available, then they probably shouldn't be in business.

oldmantime · Aug 4, 2003

Great Post PariAction:

But if this BS gets through Congress---it will make no difference to a lots of players.
But I applaud your posting and talking!

PariActionOffice · Aug 4, 2003

One of the reasons that I am asking this is because I was asked by someone very important in CR about the subject. YES, I believe they should be MANDATORY. Aces Gold was once considered the safest place to play.

I think that if a smaller book needed a few days to tranfer money into their e-commerce accounts that they would not panic if they knew that it was an inconvenience caused by their money being held in trust.

Samurai, I agree 100% with all you say. Unfortunately it make take some more high-profile failure in the industry before the players stand up for it.

The only thing that the stuff in congress will do it make it all go more underground and more players will be have to deal with agents etc.

[This message was edited by PariAction Office on August 04, 2003 at 04:18 PM.]