That rumour doesn’t seem to make much sense, since the online rooms never had a deal with Harrah’s/WSOP for online entries, they just offerred them up. In fact, when i was signing in for my first WSOP tournament, i heard them telling one woman that “Pokerstars shows up every night and pays the buy-ins for their players”. That certainly made it clear that Stars, eventhough it was renting a hospitality room at the Rio, had no deal/credit line with Harrah’s for paying for entries.
just my observations. Dean, from Aus, was there too and much more active (talking to the various participants), so he may know more details of how it worked last summer.