The GPT, or Global Poker Tour, had humble beginnings. Back about 11 years ago or so, a few high-stakes Texas Hold ‘em aficionados got together in a dark room somewhere and began to hatch a plan that would change the poker world forever. Their birth child: The GPT.
It was a simple proposition really. The founders---we’ll Blithely refer to them as “the Masters” for lack of a better moniker---the founders each called a couple of their friends from Vegas and Monte Carlo and Macau and planned to meet one evening for a game of poker. They rented a room at the local Holiday Inn Express, rented a table and some chips, and they were ready to rock!
So, on this pretty starlit evening in 1997, all of the players descended upon room #1600 at the Holiday Inn and the game was on. And it was a good game, with lots of big pots and exciting show downs. And the game went on well into the wee hours of the morning. And by dawn everyone was pretty beat and hungry and in need of fresh air, and so they decided to settle up their accounts and come back tomorrow night for another game.
Now, one of the really groovy parts of the new GPT was that none of the players actually had to bring cash with them. The Masters figured that all were good for their markers, and besides, carrying a lot of cash around ain’t so safe these days.
So at the end of the inaugural game of the GPT, over 3 million dollars had changed hands. (Well you know what I mean. 3 Million chips we'll say.) The big winner this night was poker giant HP who had won over a million dollars in chips! Many others hovered around the break even point, and only AG found himself in the hole over $500,000. Of course, no debts were settled on this evening. The game would continue tomorrow, and trust among fellow gamblers runs as deep as blood.
Night 2 arrived, and 8 more players joined the game! And so the Masters went out and rented another table, and a few more poker chips, and took a bigger room at the Holiday Inn Express, and as the clock struck 8pm it was game on! And what a spectacular night it was for poker lovers!! Over 15 million dollars gambled, with BB finishing the night as the big winner with over 5 million in chips. Again, most players hovered close to even, and only 2 or 3 players had losses over 1 million $$$.
Again, as this was a small game and everyone at the tables was considered good for their debts, no actual money exchanged hands. A few IOUs were scratched out on napkins and torn pieces of dominoes pizza boxes, but that was primarily just for references sake. The GPT was off to a rousing start, and the game was just beginning!!
Well as I’m sure you can imagine, the GPT really took off. Soon games were organized all over the country, and no longer were mere rooms at the local Holiday Inn Express sufficiently large enough---now we were talking ballrooms, and even auditoriums and arenas for the really huge events. And thousands of players had joined the ranks of the GPT brethren, and tens of BILLIONS of dollars was changing hands. And so the Masters met one night and penned a few rules to keep things running smoothly.
The 1st rule of the GPT was that all members were considered absolutely good for their debts. The 2nd rule of the GPT was that no member could cash out and leave the tour without the permission of the other members and particularly without the blessing of the Masters. As such, none of the tens of billions of dollars in debts and winnings needed to take place in cash. It was perfect! And all of the IOUs and markers and debts were recorded in a central repository run by the Masters---and all of the players trusted the Masters as they trusted their own family members. In fact, the GPT became a sort of surrogate family for the members, and loyalty ran deep.
So one day the Masters were discussing how they could grow the GPT without adding too many more actual players. You see, the games had gotten so unwieldy and massive---sometimes involving 10,000 players or more---that entire city blocks had to be rented out to accommodate not only the players but also the growing crowds of spectators.
And then it hit them! The Masters decided that they would create two new parts of the GPT: one would be a method by which spectators could wager with each other on who each thought would win the tournament, who would survive longer in the tournament, who would win a given hand, even who would finish their free cup of coffee first! The spectators could bet on anything and everything that pertained to the GPT! The second part would be a program by which players AND side-betting spectators could purchase insurance against their bets AND debts, just in case some member of the GPT or some member of the spectator group had unexpected bills to pay or, god forbid, broke rule #2 and asked for cash instead of the usual and expected IOU.
Well this idea took off like a jet plane! Soon Trillions and trillions of dollars were being bet and "swapped" by players and spectators and insurers and side-bettors. The excitement was palpable, and the GPT became the world’s highest "grossing" institution. My gosh, at one point it was estimated that the Global Poker Tour was worth, in total assets, almost half a QUADRILLION dollars!!! Of course because the rules were clear, and because a member's word that he could pay his debts if absolutely necessary was good, of that 500 Trillion dollars in assets, only a very small fraction existed in cash, or equity. The rest was debt, or leverage. What a great institution the GPT had become!!
But as we must remember, the 2 rules of the GPT were sacrosanct. All of the transactions were accounted for through IOUs and promissory notes and contracts and everyone in the GPT abided by these rules, and all grooved along quite swimmingly….that is, until the fateful day. The fateful day to which I refer----it makes me shudder to remember that awful day---that fateful day was the day that Bobby Lehman, one of the tours rising stars, realized that he couldn’t pay some of his bills…and he broke the 2nd rule! He went to his friend and fellow star, Franky Goldman, and told Franky that, as unfortunate as it was, he needed to cash in on Franky’s IOU to Bobby----an IOU totalling 22 billion dollars.
Franky was stunned. Franky didn’t have 22 billion dollars in cash!! The only way Franky could pay Bobby was to find his buddy Tommy Stearns and demand the 56 billion dollars that Tommy owed Franky.
Well I needn’t tell you what happened next. T’was a sad day in not only the life of the GPT, but also for the whole wide world. The avalanche of margin calls and requests for payment of debts and requests for payments of side bets and demands for payments of insurance policies exploded. And while theoretically the whole thing added up to zero---many people just figured that it wasn’t a big deal because everyone could just get together and exchange all the money and everything would work out---there were lots of flies in the ointment.
First it was discovered that the clearing house created by the Masters for all of these IOUs hadn’t really done a great job of accounting for everything. There were lots of holes in the books and strange entries and "fuzzy math" and missing pages. Second of all, the web of IOUs and debts was so tangled and so huge, that there was no way for everyone to be able to work out their debts with everyone else simultaneously and in a way that would leave everyone back at zero. Thirdly, literally MILLIONS of players and spectators and side-bettors had used their IOU "winnings" as collateral to buy stuff like houses and yachts and airplanes, and so the IOUs really didn’t represent the zero-sum dynamic that everyone said it did. And fourthly, some of the players and side-bettors and insurers were more entangled than others---just like O’Hare airport is more entangled with flights that the airport in West Lebanon, NH----and so lots the more entangled players ended up getting so overwhelmed that they----I hate to say it---took their own lives and left all of their counterparties holding IOUs that had no way of being paid.
What a disaster this was. What a mess! What had begun so innocently and had been so small at first became the engine that ended up bringing the entire world’s economic system tumbling down. And all of the leaders of the world got together and decided that they still wanted the GPT to exist, because it made them really really rich, but that they could never ever let anyone break rule #2 again! And so there would be no more Tommy Lehmans. Anytime a player was broke and needed cash for some reason, the governments of the world would give them the money and the people of the world would pay back the government through taxes. And that way the Global Poker Tour could survive and live on forever! Because the survival of the GPT, after all, is best for everyone.
It was a simple proposition really. The founders---we’ll Blithely refer to them as “the Masters” for lack of a better moniker---the founders each called a couple of their friends from Vegas and Monte Carlo and Macau and planned to meet one evening for a game of poker. They rented a room at the local Holiday Inn Express, rented a table and some chips, and they were ready to rock!
So, on this pretty starlit evening in 1997, all of the players descended upon room #1600 at the Holiday Inn and the game was on. And it was a good game, with lots of big pots and exciting show downs. And the game went on well into the wee hours of the morning. And by dawn everyone was pretty beat and hungry and in need of fresh air, and so they decided to settle up their accounts and come back tomorrow night for another game.
Now, one of the really groovy parts of the new GPT was that none of the players actually had to bring cash with them. The Masters figured that all were good for their markers, and besides, carrying a lot of cash around ain’t so safe these days.
So at the end of the inaugural game of the GPT, over 3 million dollars had changed hands. (Well you know what I mean. 3 Million chips we'll say.) The big winner this night was poker giant HP who had won over a million dollars in chips! Many others hovered around the break even point, and only AG found himself in the hole over $500,000. Of course, no debts were settled on this evening. The game would continue tomorrow, and trust among fellow gamblers runs as deep as blood.
Night 2 arrived, and 8 more players joined the game! And so the Masters went out and rented another table, and a few more poker chips, and took a bigger room at the Holiday Inn Express, and as the clock struck 8pm it was game on! And what a spectacular night it was for poker lovers!! Over 15 million dollars gambled, with BB finishing the night as the big winner with over 5 million in chips. Again, most players hovered close to even, and only 2 or 3 players had losses over 1 million $$$.
Again, as this was a small game and everyone at the tables was considered good for their debts, no actual money exchanged hands. A few IOUs were scratched out on napkins and torn pieces of dominoes pizza boxes, but that was primarily just for references sake. The GPT was off to a rousing start, and the game was just beginning!!
Well as I’m sure you can imagine, the GPT really took off. Soon games were organized all over the country, and no longer were mere rooms at the local Holiday Inn Express sufficiently large enough---now we were talking ballrooms, and even auditoriums and arenas for the really huge events. And thousands of players had joined the ranks of the GPT brethren, and tens of BILLIONS of dollars was changing hands. And so the Masters met one night and penned a few rules to keep things running smoothly.
The 1st rule of the GPT was that all members were considered absolutely good for their debts. The 2nd rule of the GPT was that no member could cash out and leave the tour without the permission of the other members and particularly without the blessing of the Masters. As such, none of the tens of billions of dollars in debts and winnings needed to take place in cash. It was perfect! And all of the IOUs and markers and debts were recorded in a central repository run by the Masters---and all of the players trusted the Masters as they trusted their own family members. In fact, the GPT became a sort of surrogate family for the members, and loyalty ran deep.
So one day the Masters were discussing how they could grow the GPT without adding too many more actual players. You see, the games had gotten so unwieldy and massive---sometimes involving 10,000 players or more---that entire city blocks had to be rented out to accommodate not only the players but also the growing crowds of spectators.
And then it hit them! The Masters decided that they would create two new parts of the GPT: one would be a method by which spectators could wager with each other on who each thought would win the tournament, who would survive longer in the tournament, who would win a given hand, even who would finish their free cup of coffee first! The spectators could bet on anything and everything that pertained to the GPT! The second part would be a program by which players AND side-betting spectators could purchase insurance against their bets AND debts, just in case some member of the GPT or some member of the spectator group had unexpected bills to pay or, god forbid, broke rule #2 and asked for cash instead of the usual and expected IOU.
Well this idea took off like a jet plane! Soon Trillions and trillions of dollars were being bet and "swapped" by players and spectators and insurers and side-bettors. The excitement was palpable, and the GPT became the world’s highest "grossing" institution. My gosh, at one point it was estimated that the Global Poker Tour was worth, in total assets, almost half a QUADRILLION dollars!!! Of course because the rules were clear, and because a member's word that he could pay his debts if absolutely necessary was good, of that 500 Trillion dollars in assets, only a very small fraction existed in cash, or equity. The rest was debt, or leverage. What a great institution the GPT had become!!
But as we must remember, the 2 rules of the GPT were sacrosanct. All of the transactions were accounted for through IOUs and promissory notes and contracts and everyone in the GPT abided by these rules, and all grooved along quite swimmingly….that is, until the fateful day. The fateful day to which I refer----it makes me shudder to remember that awful day---that fateful day was the day that Bobby Lehman, one of the tours rising stars, realized that he couldn’t pay some of his bills…and he broke the 2nd rule! He went to his friend and fellow star, Franky Goldman, and told Franky that, as unfortunate as it was, he needed to cash in on Franky’s IOU to Bobby----an IOU totalling 22 billion dollars.
Franky was stunned. Franky didn’t have 22 billion dollars in cash!! The only way Franky could pay Bobby was to find his buddy Tommy Stearns and demand the 56 billion dollars that Tommy owed Franky.
Well I needn’t tell you what happened next. T’was a sad day in not only the life of the GPT, but also for the whole wide world. The avalanche of margin calls and requests for payment of debts and requests for payments of side bets and demands for payments of insurance policies exploded. And while theoretically the whole thing added up to zero---many people just figured that it wasn’t a big deal because everyone could just get together and exchange all the money and everything would work out---there were lots of flies in the ointment.
First it was discovered that the clearing house created by the Masters for all of these IOUs hadn’t really done a great job of accounting for everything. There were lots of holes in the books and strange entries and "fuzzy math" and missing pages. Second of all, the web of IOUs and debts was so tangled and so huge, that there was no way for everyone to be able to work out their debts with everyone else simultaneously and in a way that would leave everyone back at zero. Thirdly, literally MILLIONS of players and spectators and side-bettors had used their IOU "winnings" as collateral to buy stuff like houses and yachts and airplanes, and so the IOUs really didn’t represent the zero-sum dynamic that everyone said it did. And fourthly, some of the players and side-bettors and insurers were more entangled than others---just like O’Hare airport is more entangled with flights that the airport in West Lebanon, NH----and so lots the more entangled players ended up getting so overwhelmed that they----I hate to say it---took their own lives and left all of their counterparties holding IOUs that had no way of being paid.
What a disaster this was. What a mess! What had begun so innocently and had been so small at first became the engine that ended up bringing the entire world’s economic system tumbling down. And all of the leaders of the world got together and decided that they still wanted the GPT to exist, because it made them really really rich, but that they could never ever let anyone break rule #2 again! And so there would be no more Tommy Lehmans. Anytime a player was broke and needed cash for some reason, the governments of the world would give them the money and the people of the world would pay back the government through taxes. And that way the Global Poker Tour could survive and live on forever! Because the survival of the GPT, after all, is best for everyone.
