Updated Full Tilt Poker Announcements This Week
There has been no investment deal following the end of the exclusivity period with Full Tilt investors, making the future seem bleaker than ever. Full Tilt plan to make several announcements this week covering the investor situation, the deposit discrepancy and the asset seizures made by the DOJ.
So just to bring you all up to date with the Full Tilt Investor / DOJ Seizure saga so far and with some thoughts added along the way …
Full Tilt Investor Exclusivity Ends Without Deal
Last week (Monday 22nd August) Full Tilt issued an “exclusive” press release to pokernews.com here, basically confirming that the exclusivity period with the “white knight” investors was up and that no agreement had been finalised …
“On August 16, Irish based Pocket Kings Ltd., brand executor for the Full Tilt Poker moniker, concluded the exclusivity period of negotiations with their current potential investor.
While Pocket Kings Ltd. plans to continue discussions with its current investor, the company has now begun negotiations with additional potential investors to conclude the sale/partnership of the Full Tilt Poker brand and its assets.
Full Tilt Poker apologizes for its lack of communication with its customers over the last month and a half, but it has been grappling with unexpected and complex legal and financial issues arising from Black Friday and its aftermath.
In addition, the company has had to be circumspect about disclosing the progress of negotiations with potential investors because there is often a requirement of strict confidentiality.
To the extent that it can do so without jeopardizing future opportunities, Full Tilt Poker will strive to have better communication with its customers going forward. Full Tilt Poker’s number one priority remains the same: to secure an infusion of capital to repay all of its worldwide customers.”
It’s believed the main reason that Full Tilt investors were unable to come to a satifactory deal with the DOJ who are rumoured to have unrealistic expectations of the settlement figure. In part this is due to the bizarre Dikshit settlement (when he wasn’t even indicted) for $300m back in the early days of the UIGEA when Party Poker pulled out of the US market.
Full Tilt Lawyer Announces More Announcements
Subsquent to the above anouncement Full Tilt’s Lawyer Jeff Ifrah went to 2+2 forum to address some of the issues and answer some of the many questions from players. A good summary of which can be found on pokernewsdaily.com here.
“Every deal requires the players to be paid,” Ifrah said. “A deal has not closed yet but that is not because of the existence of such a requirement.” and “it will be very difficult for the company to meet all obligations without the help of an investor.”
Latest Full Tilt Announcements
Somewhat unprofessionally and in yet again in badly directed crisis management mode Full Tilt seem to be releasing their announcements as “exclusives” to one site for each announcement which makes no sense as clearly these press statements should be in the public domain and broadcast far and wide within the community.
We will update this page with all three of the Full Tilt announcements expected this week as they come out with additional comments and thoughts … so watch this space
(1/3) First Full Tilt Poker Statement
Released to pokerstrategy.com on 31 Aug 11 07:09 here
Full Tilt Poker have released a statement. In it, they comment on the latest financial issues surrounding the company.
“As is obvious from the events that have transpired since April 15th, Full Tilt Poker was not prepared for the far-reaching, US government enforcement effort of Black Friday.
The events of Black Friday came on the heels of prior government enforcement activities and significant theft. Over the two years preceding Black Friday, the US government seized approximately $115M of player funds located in U.S. banks.
While we believed that offering peer-to-peer online poker did not violate any federal laws – a belief supported by many solid and well-reasoned legal opinions – the DOJ took a different view. In addition, as was widely reported, a key payment processor stole approximately $42M from Full Tilt Poker.
Until April 15th, Full Tilt Poker had always covered these losses so that no player was ever affected. Finally, during late 2010 and early 2011, Full Tilt Poker experienced unprecedented issues with some of its third-party processors that greatly contributed to its financial problems. While the company was on its way to addressing the problems caused by these processors, Full Tilt Poker never anticipated that the DOJ would proceed as it did by seizing our global domain name and shutting down the site worldwide.
Over the last four months, Full Tilt Poker has been actively exploring opportunities with outside investors in order to stabilize the company and pay back our players. At least six of those groups, including hedge funds, operators of other internet businesses and individual investors, have visited Dublin to inspect the operation.
We have recently engaged an additional financial advisor through an investment banking group to assist us in our search for an infusion of cash as well as a new management team to restore the site and repay players. While any deal of this nature is necessarily complex given the current regulatory environment, our players should know that Full Tilt Poker is fully committed to paying them back in full and restoring confidence in our operations.”
Now the interesting thing that differentiates PokerStars quick settlement and Full Tilts seeming intransigence is not IMHO that the finds weren’t segregated as alot of doom-sayers keep banging on about.
But that as I’ve said before Full Tilt ended up with a lot more of their own funds actually getting seized putting them under a lot more financial pressure regardless of whether they had “segregated” funds they got afaiks proportionately far more seized.
In addition there is the freezing of additional accounts in Ireland. Plus the even bigger than first rumoured “US player loans” made by Full Tilt which is ably covered by SubjectPoker here.
What many irate and angry players across the globe have seemingly failed to understand is that while Full Tilt clearly won’t win any awards for crisis management and public relations quite simply the mess they’ve got in is directly down to the UIGEA, the DOJ and the US gov’t. While they might not have managed things as well as they could alot of the sh*t being flung in their direction should have been better directed at the real source of the problem …
As I’ve said several times before …
Blame the UIGEA (which is likely unlawful if anyone ever really tested it in court), the dubious way it got through tagged on another bill, the teams at the DOJ furthering its own career progression and the US government for overstepping it’s mandate in the face of WTO rules and global trade agreements etc etc etc.
The trouble is probably being right legally ISNT going to change anything without a very very very very expensive and extensive legal battle to prove that the UIGEA is infact unlawful … In the absence of that legal case testing it, the “law” stands untried yet at the moment being enforced.
Just because nobody has challenged the UIGEA doesn’t make it legally right, it just makes it currently enforceable by those wanting to climb the slippery poll of career politics.
As others have pointed out, the most interesting and frankly worrying thing is that apparently six different investors, investment groups or other poker rooms have looked at Full Tilt after the seizure and none have come through to complete the deal.
On the upside it does seem genuine that the player funds IS the priority of Full Tilt in seeking a deal / investors for the current management and that management would almost certainly change when a deal is finalised.
Let’s hope things look a bit more promising by the end of the week and the other 2 announcements. Certainly by the time the AGCC hearing begins by the 15th September latest let’s hope we have some positive news and a future for Full Tilt
(2/3) Second Full Tilt Announcement
It’s still unclear if Full Tilt still plan to make a total of 3 announcements or if this announcement is an additional late pre AGCC hearing press release (made “exclusively” to pokerstrategy). It has been suggested that the first statement was effectively the originally promised three statements in one.
“On April 15th 2011 the United States Department of Justice unsealed a federal indictment against a number of individuals employed by major online poker operators. After the issuance of that indictment and a related civil case brought by the United States government, Full Tilt Poker withdrew from the US market. Then in a related action, on June 29th, 2011, Full Tilt Poker had its operating licenses suspended by the Alderney Gambling Control Commission.
As a result, Pocket Kings Ltd. (provider of marketing and technology services to Full Tilt Poker) has adopted a cost optimization program and estimates that they need to reduce their costs by approximately $12m. This program is intended to streamline the company’s operations in order to better position itself for future growth and profitability in Full Tilt Poker’s markets outside of the U.S.
If all of the required cost savings were to be achieved through redundancies, approximately 250 positions could be affected; however the exact number cannot be confirmed until the conclusion of a consultation process with its workforce.
Notwithstanding the foregoing, Pocket Kings firmly believes it has a very strong future in Full Tilt Poker’s Non-US Markets, and is fully committed to ensuring Full Tilt Poker restores the site and repay players in full. To this end, Full Tilt Poker has retained Sea Port Group Securities, LLC as its financial advisor with regard to raising capital and/or assisting in securing a strategic partner in order to fund continued operations of Full Tilt Poker’s non-U.S. business. The Company is in active discussions with several parties and will provide a further statement in due course.”
I dont think anyone really knows what to make of any Full Tilt announcements at the moment, this seemingly upbeat announcement about staff cuts (which have been ongoing since Black Friday seems whilst important to be skating around the rather more important issue of player funds and working capital.
AFAIKS either that suggests things are more solvable than many fear or that Full Tilt is even more deluded than most tend to believe … We will see during the AGCC hearing (actually we won’t as its being held in private) or at least after it.
Comment & Discuss
- Full Tilt Poker Announcements and Statements
- Full Tilt situation should we all be concerned about online poker ?
- Full Tilt – Down But Not Out ?
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