Black Friday and the aftermath: Online Poker Implications

[Royal Flush]

I blame climate change.

Speeding imo

[AndrewT]

I blame climate change.

Speeding imo

Problem is obviously speeding by autistic Christians

[TheoneTwo]

does anyone know who, out of the big fulltilt players, lost their rolls and how much, has this been disclosed/discussed anywhere?

i heard jungleman 6 mill is that confirmed?

i'm hoping brian townsend and brian hastings got stuck for a bunch and isildur1 is laughing

[TightEnd]

Correction posted 10/5/2011 8:06 PM EST.

In light of some widespread rumors that are running rampant across the internet regarding the acquisition agreement between Groupe Bernard Tapie (GBT) and Full Tilt Poker, Subject: Poker has contacted several of our sources to get clarity.

There is indeed a tentative agreement to purchase Full Tilt Poker that’s been signed by all parties. As is to be expected, it’s a provisional agreement, where certain contingencies must be met. The agreement was executed on September 30, when the previously reported letter of intent was due to expire.

In an interview with Behnam Dayanim, an attorney for GBT Managing Director Laurent Tapie, Dayanim stressed that the Groupe is focusing on moving forward to complete the sale and maintains its aim to see that Full Tilt customers are repaid the account balances that are due to them.

Bernard Tapie, Laurent’s father and owner of GBT, said in an interview with Agence French Presse that his company was only willing to finance 5%-10% of the sale on its own. Mr. Dayanim insists that is not true at all. While there are outstanding issues that need to be resolved, not the least of which is an agreement with the US Department of Justice, he says that rumors that the Groupe will continue with the sale only by having additional investors come aboard with a majority interest are entirely false. Subject: Poker can confirm that the documents that we have seen suggest that GBT plans to buy the large majority of Full Tilt itself.

GBT may, however, look for some smaller amount from other sources. For example, the Groupe is considering allowing some current owners of FTP to retain some ownership in the relaunched company in exchange for further investment or forgiveness of debt. If this were to happen, however, Mr. Dayanim is quick to point out that these shares would amount only to a small minority interest at best, and that the owners of such shares would not have votes or say in any decision-making processes or have any link to the management of the company whatsoever. However, such a deal would have to be accepted by any future regulator of Full Tilt.

Dayanim also discussed the possibility of giving players, especially those with a sizable account balance, the option to convert their balances into equity in the new company. Dayanim says that, if such a plan came to fruition, these shares would have to be held for some minimum specified period of time, and at some future time, they could be sold back to the company at market value, in addition to some additional incentive. This potential plan would have to pass muster in a number of ways; in particular, it would need the approval of the US Department of Justice and securities regulators, as well as the future regulator of Full Tilt.

The elder Tapie also mentioned in his interview that the International Stadiums Poker Tour, a new poker tournament company that is partially owned by GBT, is a key part of the deal. Mr. Dayanim says that, though the Groupe does own part of the ISPT, the poker tour is not mentioned in its agreement with Full Tilt Poker.

Dayanim admits that the Groupe regrets that the AGCC revoked the licenses of Full Tilt Poker last week, but he says he is hopeful with that such a revocation does not automatically rule out the new company being relicensed there. Dayanim explained that the AGCC’s familiariarity with Full Tilt Poker makes it the obvious choice for the potential new regulatory body. Indeed, the AGCC’s statement announcing the revocation of FTP’s licenses says, “The revocation of FTP’s licences does not, as has been suggested, prevent a reactivation of the business under new ownership and management.”

Last but not least of course, an agreement with the DOJ is paramount to finalizing any deal. Mr. Dayanim met with the DOJ in New York for some preliminary conversations on October 3. Both sides are now considering issues raised during that meeting, and Dayanim says another sit-down for further discussion will take place soon. According to Dayanim, the position of the DOJ with respect to the allocation of seized funds being used to repay players is still unsettled.1

Multiple sources close to the negotiations tell Subject: Poker that the $128 million in uncollected e-check deposits that is partially to blame for FTP’s insolvency is part of the discussion between the DOJ and GBT. It is still unclear, in light of the DOJ’s stance on the legality of online poker, the legality of gambling debts in the United States, and the legality of Full Tilt’s decision to effectively loan players money without telling them, whether any of this money could ever be collected. Even if collections did take place, it is possible that they would not be particularly successful.2

In addition, there still remains the question of whether Full Tilt itself will agree with the deal. A source close to FTP says that Full Tilt’s corporate structure requires that owners representing two thirds of the shares of Tiltware must sign off. The same source says he hopes that a vote will take place in the next few days.

[titaniumbean]

I blame climate change.

Speeding imo

Problem is obviously speeding by autistic Christians

AndrewT wins again!

[TightEnd]

Sources close to Full Tilt tell Subject: Poker that the acquisition agreement between Groupe Bernard Tapie (GBT) and Full Tilt contains a clause requiring that an outside independent entity be appointed to protect the current and future assets of the poker site pending its final sale.

GBT intends to appoint a chief restructuring officer (CRO) who will, in effect, replace the current board of directors of Full Tilt Poker. Among the responsibilities of this newly created post will be to protect all assets of FTP and related companies while the Groupe continues to negotiate the potential acquisition of Full Tilt with the various parties involved. To accomplish this, the CRO would, in effect, obtain final say over any and all financial and managerial decisions of the company, except for payment of mandatory obligations, such as employee salaries.

There is also a clearly stated mandate that no dividends or disbursements be made to any shareholder during this interim time period.

Sources tell Subject: Poker that GBT is still interviewing candidates for the new position. The final decision for hiring the CRO rests solely with GBT and there is no appeal process available to current ownership.

As we previously reported, the ratification of the agreement itself requires the approval of owners representing two thirds of the shares of Tiltware. The hiring of the CRO, as a part of this agreement, would be subject to that same vote. Sources tell Subject: Poker that such votes are being called immediately, with a final tally due any day.

[TightEnd]

AGCC Interview

[Hairydude]

Bernard Tapie is such a straight laced stand up guy too

[TightEnd]

The Alderney Gambling Control Commission admitted that its regulatory procedures rely upon the truthfulness of its operators to determine if violations occurred.

Its “regulate by report” model – which requires honest and complete reporting on the part of the operator – meant that, even when the indictments were unsealed on Black Friday, the AGCC was “pretty confident that there wasn’t a problem.” But there was a problem: 300m of players funds had disappeared.

In an interview from the Global Gaming Expo in Las Vegas, André Wilsenach, the Executive Director of the AGCC, stated that even after the indictments were handed down he believed Full Tilt was solvent.

“It was only after when we started investigating that we realized […] they had wrongly reported to us and misled us as in terms of their financial position,” said Wilsenach.

Part of the problem was that millions of dollars, frozen by the DOJ, was reported to the AGCC as cash-on-hand. That, coupled with a regulatory method that relied on the operator’s integrity, was how the players’ funds deficiency was able to grow so large, undetected.

Justifying the AGCC’s “regulate by report” method, Wilsenach stated that “there must be a certain level of trust,” and in the case of Full Tilt, “that trust was in place.”

players’] interest.”

He also confirmed that Full Tilt’s argument for having the license suspension hearing held in private was to avoid the public disclosure of information that might be incriminating to Full Tilt in the US. “As a regulator we have a responsibility to keep crime out of the industry” Wilsenach stated.

Apparently, the way to accomplish that goal under the “regulate by report” system relies on unscrupulous operators to do the right thing.

[tikay]

Oh my, that's today's new word for me - "commingled". Love that. One of those words I've never seen or heard before, but it's meaning is immediately evident. I shall use it at every opportunity, especially when commingedling different subjects.

Commingleding ftw, super super sick commingle-age.

[Bongo]

Isn't commingleding a commingling of words?

[doubleup]

The FSA uses the same method of regulation.  Madoff stole billions under the US model of regulation.  

Regulation does not stop FTP type of events happening.  Good regulation tries to minimise bad outcomes by controlling the people who enter an industry, making their responsibilities clear and having severe and credible sanctions to deal with renegades.

[AlunB]

The FSA uses the same method of regulation.  Madoff stole billions under the US model of regulation.  

Regulation does not stop FTP type of events happening.  Good regulation tries to minimise bad outcomes by controlling the people who enter an industry, making their responsibilities clear and having severe and credible sanctions to deal with renegades.

I read a quite amazing article in Rolling Stone about the SEC in the US. http://www.rollingstone.com/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817

I think you've hit the nail on the head there really though regarding offshore licensing bodies. What can an offshore jurisdiction really do aside from revoke a licence in terms of sanctions? And as such where is the downside risk?

[Bongo]

I think he's written a few like that...

http://www.deepcapture.com/ is a site pretty much dedicated to the same theme.

[tikay]

Ladbrokes just reported Poker Revenues down 12% in the quarter.

If memory serves correct, that's about the 10th successive qtr in which Laddies Poker has declined. Not sure how long that can continue.

Its damaging to the overall brand, & I'm sure, having failed to buy someone else, or sell it, they'll close it soon, but I've been saying that for 2 years now, so probz I got it wrong.

There'll be quite an exodus of Rooms from Online Poker in the next few years though, of that, I'm very sure.