The site was set up in such a way as to get around the Unlawful Internet Gambling Enforcement Act which effectively prevents gambling online by stating the prize money up front. The bad thing is, they never got enough people to sign up to justify the gigantic payout and now still owe $475,000 in prize money payouts to its customers. Too make it worse, they have $850,000 in current liabilities with no cash coming in to save them yet.
"The problem is that we front-loaded money as entry fees came in. I shouldn’t have assumed we were going to get a certain level of growth. Had we known we weren’t going to get the growth, we wouldn’t have made software changes. Then, we wouldn’t have set the prizes as high as we did. People think we’re running away with the money. We’re not running away with any money; it went to the business.”
Whoops. Looks like they overestimated things a little bit. They should have followed another old axiom "Promises are like babies: fun to make, but hell to deliver."Story from Fantasy Fanatics