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Meanwhile, the sequence of recent events – since Dayanim’s disclosures last month of several players’ indebtedness to FTP and since PPN’s identification of substantial additional roadblocks to closing a deal — have been fast moving.

In my conversation this morning with Dayanim, he was mum as to any specifics of current negotiations explaining in his usual polite manner the reasonableness on my part in probing for information, and the reasonableness on his part in deflecting my invasive questions for another day.

Like an airplane delay, affected players are frustrated by the lack of updated information as to the real progress in getting them to their destination. The primary purpose of this update is to allow players a bird’s eye view of the current machinations, even if the ending is not 100% clear.

Lawyers not intimately connected to the GBT-DOJ-FTP negotiations but well informed for one reason or another (they prefer not to explain publicly), provide useful information and insights. The lawyers consulted have all proven themselves as knowledgeable resources in the past.

They generally concur in their analysis of where things stand, citing five major developments that have breathed new life into a deal that was primed to crater:

1. Necessary Investor money is now in place. Investor commitments at the time Dayanim announced the complications caused by the player debt were wobbly; Tapie was not persuaded to take the necessary risks of the deal with the broad array of uncertainties that had risen to the surface during the due diligence process. The player debt contributed to the angst but was not the most significant cause of it. The player debt was well known prior to completion of the due diligence.

2. A late arriving investor reportedly “close to Full Tilt” has stepped up to the plate since the announcement of the threatening crash of the deal in part due to the 16.5 million dollars of player debt.

3. There is a concrete understanding as to the breadth of the total liabilities it will inherit – beyond the player repayment requirements, and in a better position to work out a plan to address them. While FTP was in worse financial condition than anticipated, the breadth and depth of investor participation is expanded.

4. There is a better handle on the extent to which they will inherit troubled assets —namely player debt that will be hard if not impossible to collect. Tapie has a clearer picture as to which players will make arrangements to discharge their debt as well as those who lack the funds or the honor to do so.

Note: Given the reportedly sparse documentation for these loans, collection efforts through enforcement proceedings are now viewed as worse than unappetizing. This was probably the reasoning for the shaking of the leaves — to see if public shaming of indebted players by Dayanim last month might unearth some additional monies. The tactic was of little effect in inducing recalcitrant players to resolve their debt, but apparently it unexpectedly drew in one additional needed investor.

5. Tapie is developing a more definitive plan by which to assure proper and orderly repayment of rest of the world players. The smart money is betting if this issue is resolved, as is now anticipated, the final arrangements will fall into place.

Explaining that it is their understanding that the DOJ has discouraged discussions with media while negotiations of any kind are in progress, lawyers queried sympathize both with the Government’s concerns of disruption of progress and with players’ frustrations over being kept in the dark for so long.

Perhaps the most interesting comment was made by one highly regarded gaming law expert not in the mix of protagonists. He said, “I wouldn’t be surprised if the Government is in an end game to position itself not only as the power that has taken down illegal online poker in the US but also as the players’ hero in picking up the pieces,” in the United States and around the world. The smart money is betting that the DOJ has become more keenly interested in assuring that victims overseas will be repaid their funds and that an orderly process is in place to do so.

Extensive player skepticism in the US notwithstanding, lawyers consulted for this article, including Government affairs experts with ties to the DOJ in Washington, D.C. express increasing confidence that the Justice Department intends to use the money from the anticipated sale ($80,000,000) and more money if recovered through other efforts, for repayment to American players.

As they say, in some places — from their lips to God’s ears!

Judge Lewis Kaplan Has Plenty to Ponder

Last week Kramer Levin Naftalis & Frankel LLP, the law firm recently brought in to defend Chad Elie and John Campos at their upcoming trial, hit the ground running. Elie and Campos are two of the indicted defendants in the April 15, 2011 Black Friday indictments in U.S. v. Scheinberg et al and the related civil forfeiture actions.

Counsel has submitted a motion to the Court in limine, asking permission to present evidence to the jury concerning poker as a game of skill. Judge Kaplan, in charge of the upcoming trial of Elie and Campos, has thus far shown little sympathy to counsels’ arguments that poker is a game of skill; but, he did leave the door ajar.

There are pressing questions now center stage in Judge Kaplan’s courtroomnin the New York Federal District Court. Is poker gambling as a matter of law? Is poker a game of skill as a matter of fact? Is there an element of chance in the game? Is there a predominance of skill over luck required to be a winning player? Does an outcome depend to a material degree on chance?

Lawyers Weigh In

Several lawyers familiar with the cases say the recent appointment of Kramer Levin as counsel for trial makes eminently good sense, praising the new defense team as both highly intellectual in arguing the law and uniquely capable in resonating with a jury. Most lawyers queried for this article believe the defendants’ prospects for victory would improve dramatically if the judge rules favorably on this motion which gives poker its due as a game of skill. They explain the Government seeks to establish that poker is gambling as a matter of law.

Just days after the signing of UIGEA, the Fordham Intellectual Property, Media and Entertainment Law Journal published an article by Bennett Liebman titled: “Poker Flops Under New York Law” (2006, Volume 17, Issue I, Article 1 — available on the internet) which includes a comprehensive analysis of the skill v. chance arguments that swirl around poker.

At the time of publication, Mr. Liebman was the executive director of the Government Law Center at Albany Law School. He is now deputy secretary to New York Governor Andrew Cuomo for gaming and racing. He is tasked with the broad review of all gambling issues with a view toward considering legalization of gambling in New York under sound policies.

Liebman’s Article: Must Reading for Laypersons and Lawyers

Gaming law experts consulted for this article, acknowledge Mr. Liebman’s treatise as undeniably thorough in its discussion of both the straightforward and garbled questions and answers that have become part of an ever-fattening book of poker cases in courtrooms around the country. For non-lawyers (you should know I am not a lawyer), it speaks in clear English about relevant poker definitions and points made in court cases with abundant references to these cases among the author’s 240 citations.

Unmasked only at the very end of the article is Mr. Liebman’s apparent disposition toward poker as a game that requires a predominance of skill over chance and a game that should be removed from criminal prosecution and the clutches of gambling (as a matter of law). It is as startling as it is refreshing for professional poker players in the United States.

The article presciently concludes:

“It may be possible for poker in New York to reach the levels W. C. Fields suggested for it in the 1940 movie My Little Chickadee. Fields’ character, Cuthbert J. Twillie, is asked about a poker game by the prototypical rube Cousin Zeb, played by the actor Fuzzy Knight: “Uh, is this a game of chance?” Fields’ character responds, “Not the way I play it, no.”

Billy Baxter: Ahead of the Times

Back in the mid 80s when most top poker players kept their winning strategies close to the vest and above all avoided publicity about their skillfulness, William (“Billy”) Baxter Jr., a highly successful professional gambler with enviable poker results, was on the same page as W. C. Fields’ character in the movie (see updated author note at the end of the article).

Mr. Baxter took on the Internal Revenue Service in a landmark case that determined he had “derived his gaming income actively from his expenditure of time, energy, and skill rather than passively from use of his property: thus his gaming income constituted ‘earned income’ at a lower tax rate than if it had been judged a lucky windfall.” The trial judge famously quipped, “I just wish you had some money and could sit down with Mr. Baxter and play some poker.”

Liebman Has His Eye on the Ball

Liebman’s research ends in 2006, but neither the many poker skill studies conducted over the past few years nor the more recent cases in state courts diminish his work. In the course of reading Liebman’s law journal article, one stumbles into an understanding of the Government’s vulnerability in pursuing gambling charges related to poker and possible reasons for the Government’s decision to prosecute online poker defendants in New York.

Without drawing legal conclusions the takeaways from Liebman’s article could be simply the following: the laws related to gambling and to poker in particular, are filled with riddles that make for unending confusion in determining the legal status of poker as gambling.

To make matters more complicated in the state of New York, the test of a predominance of skill over luck in determining if an activity is gambling under the law, as applied in many states, apparently is not necessarily applicable in the Empire State.

Liebman’s research indicates there could be a serious problem of overcoming Judge Lewis Kaplan’s apparent leaning toward the treatment of poker as a “gambling” activity as a matter of law and thus not a question of fact for a jury to decide.

Wide Range of Experts Tell It Like It Is

In recent years numerous academic studies are virtually unanimous in their conclusions that skill is the predominant factor in distinguishing winning players over losing players. These collective findings are more than sufficient cause to ask jurists to visit anew and with open minds, the role and extent of skill in modern day poker with a view toward removing it from the status of conventional gambling games to be played in casinos. A non-exhaustive but significant representative list of relevant and publicized studies since 2006 is provided at the conclusion of this article.

In addition to serious academic studies and empirical data produced by the poker community, esteemed gaming lawyers and professors including the likes of Harvard Constitutional law giants Lawrence Tribe and Alan Dershowitz and even Louis Freeh, the former head of the Federal Bureau of Investigation have weighed in on the skill argument for poker as a matter of fact.

Poker Pros Prove Their Skills

Professional poker players, generally regard any contentions that poker is gambling as not only misleading but factually unsupportable and therefore outdated legal drivel. The poker community has mobilized in making a direct contribution to the arguments for poker as a game of skill.

Epic Poker League: Annie Duke, a co-founder of Federated Sports + Gaming and Commissioner of its Epic Poker League sought the help of professionals in information systems and software development to create the Global Poker Index. The GPI is arguably the first poker ranking system to be taken seriously — both by professional players and the mainstream press. The League is a “members only” organization, designed to include the top 300 performing poker players in major tournaments worldwide, in accordance with the GPI ranking formula. The rankings are published weekly in the pages of USA Today.

International Federation of Poker: The International Federation of Poker, led by acclaimed British journalist and recreational poker player Anthony Holden was launched in 2009 with a mission that combines a commitment to poker as a mind sport and a skill game. The website flashes its poker mantra boldly: “No gambling! It’s a game of skill.”

Holden spent a full year on the international tournament trail observing the variable skills of his opponents for his poker memoir “Big Deal” in 1990 and followed up with a sequel, “Bigger Deal,” in 2007 before founding the IFP.

Germans Prove Most Skillful: In 2011 The IFP held a “duplicate” poker tournament that attracted top performing poker players from around the world, teasing, “Time has come to find the most skillful nation in the world.” It would seem that the IFP did just that! At its inaugural “Nation’s Cup” last November, Germany emerged victorious, following up on top performances by German players Pius Heinz, main event winner at the 2011 World Series of Poker, Benny Spindler at the European Poker Tour’s London stop last September, and Martin Finger at EPT Prague, thereafter.

United States Poker Federation: The nascent United States Poker Federation is a member nation of the International Federation of Poker; it is headquartered in New York within walking distance of Wall St. USPF President, Peter Alson, points to Wall Street as “one of the biggest institutions in the country and the biggest casino in town.” A Harvard graduate and regular poker warrior with substantial writing credits in gambling subject matter, Alson labels as a “hypocrisy” any scorn toward poker as a mere gambling game against the backdrop of accepted professionalism of stockbrokers and traders who make dicey bets, daily, at far higher stakes.

Black Friday: Rubber Meets the Road

Would proof that poker is a game of skill make any difference in the current cases? To get to first base, the defendants will have to convince Judge Kaplan to take a step back from his previously stated initial inclination to view poker as gambling — as a matter of law. In this regard, online poker sites were apparently at far more peril than any of the online companies considered—and more peril in the state of New York, than most anywhere else in the United States.

Be that as it may, many legal efforts to push the skill argument in the US have been made in state courts over the past five years in one way or another and to almost no avail in the upper courts. At present, one case could become timely in Judge Kaplan’s courtroom; Town of Mt. Pleasant v. Chimento. A mid-level appellate court in South Carolina ruled poker to be a game of skill in a bizarre case where a raided home game led to the arrest of 20 poker players. The State Attorney General has appealed to the South Carolina Supreme Court which heard arguments in the fall of 2010 but has yet to report a decision.

Several gaming lawyers queried for this article say but for the charges of bank fraud and money laundering that emerged as part of the online poker cases, it is questionable as to whether the Government would have proceeded. They cite the motion before the Court as predictable and of enough potential significance to have caused the Government pause.

Circling Back to Bennett Liebman

Bennett Liebman may have the clearest vision of all. His Fordham Law Journal article explained not only how and why the online poker sites could get into such sticky wickets in their gambling business, but more importantly, his last words may soon help lead the way out of such trouble for both online and live action poker players who have turned one of America’s favorite pastimes into hardworking livelihoods.

Mr. Bennett concluded in 2006, while at Albany School, “New York now has the potential to make Fields’ view of poker the correct one.” Now as a senior advisor to the Governor in gaming matters, could Mr. Liebman actually be in a position to influence needed change?

In the Government’s April 15, 2011 indictment, the US Attorney for the Southern District of New York finally honed in on the former “Big Three” online poker companies — Poker Stars, Full Tilt Poker, and Absolute Poker/Ultimate Bet — in a bid to end online poker in the United States and put key executives of these companies in jail.
The Government trumpeted its penetrating years-long strip search and invasion of the most private parts of their operations. Poker Stars was the largest and most popular online poker site when the Government tore into the industry and remains the only one of the three online poker companies attacked currently operational.

Basic Results of Research
It should come as no surprise to Poker Stars that broad segments of the poker world are fascinated by the company beyond the carefully spun historical perspective found in the 10th Anniversary brochure of the 2012 Poker Stars Caribbean Adventure. Not uncharacteristically, Poker Stars customers have developed an insatiable appetite for details about the inner workings and the operations of a company that has made a few of their corporate officials fabulously rich.

Reports from current and former employees, consultants, business partners, Team Pro players, and media brought many verified vignettes that highlight the secretiveness of the company. The various accounts share a common theme; they all indicate a core value of camouflage that permeates so many of the company’s significant initiatives. For the uninitiated, here are a few eye-openers into the enigmatic world of Poker Stars operations and management.

Isai Scheinberg controls the presentation of Poker Stars’ image
While Poker Stars is officially overseen by several senior executives, Isai Scheinberg, the company’s founder is the boss of bosses, ever present at the top of the food chain. Generally affable and low key among colleagues, he is also known to have a stubborn streak on points that matter to him, be they large or small.

As the chief architect of their image, Mr. Scheinberg promotes the company’s mantra as a “players are first” type of organization. He also promotes the concept of business partnerships where meeting the spirit of a contract is as important as the letter of the agreement. One company consultant kids, “Isai Scheinberg’s last name might as well be Poker Stars!”

Corporate Communications
When it comes to communication between Poker Stars and the media, Scheinberg has always been reserved, but since Black Friday, PokerStars’ position toward media is clear: the best press coverage is none. This past spring the company brought in public relations specialist Eric Hollreiser; he serves as communications director. He brings extensive public relations experience to Poker Stars, including stints at Guitar Hero, Microsoft, and Disney during the past decade.

A personal comment about the appointment of Hollreiser as Communications Director: Following publication of an article in Poker Player Newspaper not to the company’s liking, Hollreiser emailed me in a manner that plainly suggested internal pressure from the very top. Demands for deletion of copy were summarily dismissed. Lawyers who reviewed the email cringed at its imprudence. Although I have not heard further from Hollreiser, there has been limited communication between Scheinberg and me since then.

Mr. Hollreiser’s experience was decidedly less stressful with a high profile reporter in the mainstream press who calls him professional and helpful. He gets mixed reviews, however from upper level employees of Poker Stars; a barrage of calls to this reporter came in from Poker Stars personnel shortly after they were directed not to talk to Poker Player Newspaper.

Legal Affairs
These days PokerStars legal affairs are complex. The in-house legal department is led by Paul Telford as General Counsel. He was previously at Party Gaming. One lawyer who has known him since his earlier career at a big English law firm says, “Paul brought high value as an independent thinker.” He observes, “In recent years, Paul seems more focused on his boss’ directional signals.” One Poker Stars executive comments that Telford keeps a steady gaze on the activities of competitors and beats the drums for Scheinberg, making him the ultimate loyalist but a less fierce consigliere. As an example of this latter issue, an outside lawyer who has done work for Poker Stars says, “The five legal opinions obtained by Poker Stars supporting the company’s continued US-facing operations might have benefitted from a tougher, more independent in-house final review than they apparently got.”

Poker Stars’ mounting legal problems — failure to get the North American Poker Tour firmly off the ground, repetitively seized funds from its payment processors, public warnings from the FBI and leaks of a grand jury convening in New York to consider online gambling matters — never resulted in any lawyer convincing Scheinberg to take a step back until the DOJ pounced. To the end, the public message was all’s well for online poker in the US even if no concrete progress was made in passing favorable legislation in the Congress.

PPA is beneficiary of PokerStars Funds via the IGC
PokerStars’ fascination with politics and the political maelstrom in Washington and elsewhere has never waned. The company has persistently put forward various political initiatives and fund raising activities that some of the lobbyists surrounding Poker Stars understood to reflect strictly corporate, not player, objectives. Few poker players are sophisticated politicos, even among those active in the Poker Players Alliance. Indeed, very few of the million plus members are believed to have any clue as to how they became enrolled.

The PPA was set up by the founders of Party Gaming to avoid legislation adverse to their online poker business around the end of 2005. Over time, Poker Stars and Full Tilt Poker became equal partners in contributions made to the PPA through the Interactive Gaming Council. The IGC earmarked their contributions for that purpose and transferred them over to the PPA accordingly, explains a well-informed member of the IGC. The funds that were sidetracked did not go unnoticed for long. In no other part of PokerStars activities have their intended secrets been more compromised.

Members of Congress and their staffs were never in the dark about how PPA’s membership grew, or who called the shots — but the poker world has been mostly left in the dark. Much was made of the election of Alphonse D’Amato as the Chairman of the PPA, but wiser folks later confirmed Senator D’Amato cut his deal with Sheinberg.
The PPA was long on secrecy and short on transparency for years. The online sites that controlled the organization used to conduct free roll tournaments that provided players with free memberships, ostensibly to create the appearance of a wildly swelling grass roots movement. Those efforts have more recently paid off, as poker players are far more interested in the PPA today than they were before Black Friday.

More Mixed Messages
The skill vs. chance argument swirled around in the hallways of the US Congress and went nowhere. Now, in Europe however, there could be a disaster in the making for live tournament players and PokerStars casino partners. While former American customers still rave about Poker Stars’ fast refunds to their player accounts after Black Friday, French players are beginning to bristle over new income taxes on poker tournament winnings.

The Company has been cozying up to French regulators, arguing for poker as a game of skill rather than one of chance. In doing so, winning windfalls may be taken out of a tax free category and instead considered as ordinary income as is the case for other professionals.

Will Poker Stars seek to reduce the Company’s taxes in return for great advice provided to European regulators on how to extract more from online poker, at player expense?

Poker Stars casino partners may also be in for a rude awakening, if this skill argument persists. The ideal scenario for Poker Stars would be to prevail on the “poker as a game of skill” argument, thus taking poker out of the legal class as a gambling activity. That would disengage these casinos as necessary partners so that Poker Stars could put on tournaments in hotel ballrooms of their choosing instead of in licensed gambling halls or elsewhere under a casino partner’s license, where the casino makes money on the buy-ins. Imagine the entire European Union following in the footsteps of Poker Star’s French regulatory connection.

Mandate for Media
The three pronged takeaway from recent research: Poker Stars’ mastery of the art and science of camouflage is at the heart of its unfathomable success; the use of such tactics may be at the heart of the DOJ’s charges and continuing investigation of online poker.

For the time being, media is more dependent than ever on cultivating reliable insider sources—and digging deeper each time a nugget is unearthed. If the media persists and perseveres, walls of secrecy inevitably come tumbling down.

Ms. Eolis, CEO of Eolis International Group, once called called the plan “one of the most creative business deals ever — if it works; now she comments on the bizarre chain of events that have turned  the proposed deal into “a cliffhanger” – at best. This breaking story appears at Poker Player Newspaper.

Two of the well-known players who owe significant monies are in negotiations with GBT in apparent good faith efforts to to resolve their debt, according to Dayanim. He has not made these names available for publication, at this time.

Mr. Dayanim also acknowledges the existence of additional hurdles, but for today, he is more focused on the players that the Company finds uncooperative in turning over monies due to Full Tilt. These monies had been treated in the deal as real and viable assets. Unpaid, they are assets that Tapie would have to make part of enforcement proceedings. Tapie is said to have little appetite for that scenario.

According to numerous sources, some of the indebted players are also now known among their peers as being in deep financial trouble and are not expected to pay back these monies which were loans to them, any time soon. The company is presumed to have made the loans from corporate accounts that co-mingled player funds.

More information is coming in on additional hurdles that threaten to topple the deal. Look for further PPN updates.

A lawyer close to one purported investor says, “The deal should get done.” He estimates the time table for a relaunch of the FTP site as before the end of the first quarter.” Another lawyer, with strong ties in the current Full Tilt brouhaha says; “The die is cast; Full Tilt is effectively out of control; the deal is now unstoppable unless Tapie fails to deliver the necessary checks to the Court.”

Still there are plenty of Doubting Thomases who say the proverbial fat lady will not ever sing as part of a harmonized Tapie – Full Tilt DOJ chorus. The cynics point to the fact that no additional investors have yet been identified, publicly. And they remind us, as if we didn’t know – the process by which American based customers will have to seek compensation is yet to be resolved.

We do know through one source with direct knowledge that “At the end of the day, reimbursement of player funds is an issue for the Department of Justice in Washington, not the US Attorney in New York.”

“The Government does care about players who have been victimized by Full Tilt’s insolvency, says one very well connected former federal prosecutor. He adds, “To the extent they are owed monies and there are monies that can be made available for reimbursing them, I fully expect the DOJ  to do the right thing, here.”

Unless there is a deal, Full Tilt customers could be completely out of luck. With a deal, the smart money is betting large that the Justice Department is prepared to pay out proven claims, at least up to the 80 million dollars it receives from the “sale” of Full Tilt.

Updated (01/20/2012)

The Parade of Unsung Departures

In a personal email to this reporter one day after publication of the breaking news,  PokerStars founder Isai Scheinberg confirmed “Gabi’s (Campos) departure.” Hours after Poker Player Newspaper broke the story, PokerStars gave an exclusive statement to Poker News, attributed to “top officials” of the Company:

“PokerStars announced today that Gabi Campos has decided to step down from his position as Chief Executive Officer, effective February 1, 2012, to pursue other opportunities. The company thanks Gabi for his hard work and commitment and wishes him the best in all his future endeavors. A search for Gabi’s replacement is under way.”

PokerStars’ Public Relations Strategy

Now that the cat is officially out of the bag, it is worth noting that PokerStars was provided more than a reasonable opportunity to get out in front on this story. The Company was provided substantial notice prior to publication of the breaking news by PPN; initially by a call, then by a bullet point outline of the subject matter with invitation to discuss/comment and – one more time, with a draft copy for last-minute fact checking, comments, or any quotes it might wish to present. PokerStars remained silent until after the PPN report of January 17th.

Gabi Campos in Transit

Last Friday, PokerStars apparently presumed that the impending separation could be kept under wraps until the Company would decide otherwise. Gabi Campos, as he is known throughout the PokerStars family, was keeping himself scarce; his whereabouts were unclear. Mr. Campos — an enigmatic figure with an eclectic personal and professional resume — had crossed the Rubicon to ‘splitsville’ with his bosses — before last Friday. And the buzz of Campos’ anticipated departure which emanated from the Isle of Man offices of PokerStars was a function of more than three people in the know! The buzz quickly became loud and clear.

Campos bears a family name that might be Polish and a surname popular in Portuguese speaking countries. He talks happily about his Argentine connections and speaks fluent Spanish. His LinkedIn account indicates strong ties in Israel, and at one point in his career he worked for a telecommunications company in Basking Ridge, New Jersey. He settled into his role in PokerStars in 2010, a stone’s throw from Isai Scheinberg’s office in the Isle of Man. His next office address is not known.

Management Under Campos

Over the course of his tenure at Poker Stars, Mr. Campos has been known to work long hours, holding conferences and conference calls well into the wee hours of the morning. Colleagues and business partners say he dealt timely with matters he considered crises in the making or immediately consequential. However, from time to time they have also called him disorganized, dismissive, or unresponsive in matters of lesser interest to him.

In the crunch, Mr. Campos was known to assert his acumen and charm and a gutsy determination to get to the finish line of a deal. Although he seemed to treat offline tournament fare as a distraction to his global responsibilities, Campos never hesitated to get into the trenches when the going got tough.

For example, he moved stalled negotiations between PokerStars and Casino Gran Madrid off the dime and onward to a completed deal in a matter of hours. He graciously offered to revise the contract in Spanish and sealed the deal with Poker Stars business partners for EPT’s Season 7 championship — in the nick of time to assure smooth sailing for the grand finale.

Warning Signals

Mr. Campos’ absence at the PokerStars Caribbean Adventure earlier this month was shirked off by Poker Stars event management. However, recalling his presence both at the PCA and at the Casino Gran Madrid last year this reporter was puzzled by Campos’ absence at this recent crown jewel event.

During the PCA festival last January, the rarely exuberant Mr. Campos crowed about his plans to model more PokerStars live events in the image of the PCA – at fun resorts, with increased profitability as much as overall marketing value part of the agenda for these events. It was incongruous that Campos would choose to be a no-show at this venue.

As the early buzz turned to a persistent hum on both sides of the Atlantic, Campos’ rumored exit plans grew legs. Expanded reporting brought more certainty of the story’s validity. Campos’ reign at Poker Stars has lasted less than two years.

Keeping an Eye on the Ball – Not the Flak

Yesterday some poker media took note of Campos’ LinkedIn profile which suggests his current employer is Dragon-fish, the 888 subsidiary where he turned in a sterling performance while employed there prior to joining Poker Stars. Needless to say, his LinkedIn employment profile may simply be dated and should not be read as gospel.

Recap of Earlier Campos Report

The initial report of Campos making a beeline to the exit door was provided Friday, January 13, by a highly reliable insider during the PCA festivities, and corroborated later the same day by an additional proven source; both said the departure was a fait accompli.

The handwriting was on the wall for months, both parties reaffirmed during a fact–checking exercise. Speculation among several generally informed sources is divided as to whose handwriting surfaced first in the exit talks, but shortly after publication of the Poker Player Newspaper story, Poker Stars was reportedly pressed by senior executives for guidance as to what should be said to their minions. The Company turned away from rapt attention on the leaks to face the error of leaving others to announce departure decisions.

Poker Stars PR Issue

Now that Poker Stars has acknowledged Campos’ departure plans are a reality, media and players alike are curious as to the nature of the adios conversations. There has been a parade of recent personnel changes involving four high profile executives – notably, three associated with live event management and the fourth – Campos, who had responsibility to oversee that management. To be clear, there is no evidence of linkage among these parties in the parade except to the extent that they reflect the significant tumult in the management of live events during the past year, and longer.

Thomas Kremser’s Departure

In recent months, PokerStars live event management has become a fast-paced band playing musical chairs with increasing visibility to live tournament players. First there was Thomas Kremser, EPT’s longtime Tournament Director. He issued a press release noting his decision to leave for greener pastures after deciding to walk away from contract talks for an eighth season. His departure had nothing to do with rumors that were posted on a website affiliated with PokerStars — and PokerStars quickly thereafter made clear, publicly, that Kremser left in good standing. Along with the departure of Kremser came an end to a seasoned, professional, and cohesive PS tournament personnel team under the umbrella of Kremser’s company, TK Poker Events. Some dealers and floor persons previously associated with TK Poker Events now work for Poker Stars’ Global Poker Tours Limited, which has taken over the staffing of PS live tournaments since Kremser’s departure. For their part, several dealers are reporting that Poker Stars has reduced tournament personnel costs at their considerable expense.

John Duthie’s Resignation

Moving along in the parade of departures is John Duthie. He was a Poker Stars team pro and founder of the EPT. At the end of 2011, he also parted ways with Poker Stars. A well respected player, Duthie is even better known as the man who created the most prestigious poker tour in Europe.

Before he cut his deal with Poker Stars, Duthie consulted with Thomas Kremser and considered five online companies that were chomping at the bit to jump on the Duthie bandwagon. The concept of branding a gaming company with televised live poker events was started by the World Poker Tour in the US and refined by Duthie for European consumption. Broad distribution agreements for the televised coverage has given PokerStars massive exposure to new customers and opportunities to enter new countries.

Duthie resigned last month. PokerStars treated his decision as a non-event – sans grand public thank you. Mr. Duthie insured that news of his resignation would spread like wildfire. Shortly after notifying the company, he posted on a popular poker forum his decision not to renew his contract.

Two weeks later PokerStars stepped up with a press release announcing that Duthie and Poker Stars had “parted ways” and offered up a solid thank you.

Jeffrey Haas’ Transfer

During the PCA there was proof of yet another seismic shift in the management of live tournament fare. Jeffrey Haas, the managing director of Global Poker Tours Limited since its beginnings, welcomed the huge crowd of players who knew nothing of his status change. Mr. Haas’ welcome message in the PCA magazine ended with his name and the GPTL company name, but without any title associated with him.

According to two members of the PokerStars personnel team at the PCA, Haas enjoyed a last hurrah at the PCA as part of GPTL. They noted that Campos had revised Haas’ responsibilities months earlier by taking him away from GPTL to concentrate on developing social media initiatives in a job that the company has called “new and important.”

Campos Departure Caps a Parade

As for Gabi Campos, his reign at PokerStars is virtually over, whilst the proverbial fat lady is singing her song. But Isai Scheinberg and Gabi Campos, the almost X-CEO, have yet to complete their final dance.

PokerStars Remains Stand Out Success

While Gabi Campos fades in the PokerStars sky, the Company has its eye out for a replacement and pushes ahead as the largest online poker room in the world.

In the next edition of Poker Player Newspaper, look for a story that expands on the informative history provided in the polished PCA Magazine, that was provided to PokerStars customers at the recent PCA event.

The initial report was provided last Friday during the PokerStars Carribean Adventure and corroborated on the other side of the pond later the same day by another well-informed insider.

Both sources said the departure is a fait accompli. “The handwriting was on the wall for months — on both sides — say the two parties who know the upper echelon of PokerStars management well. Speculation by others queried is divided as to whose handwriting surfaced in the exit talks.

If Mr. Campos’ departure is a reality – and the smart money is betting big on the substantive veracity of the adios conversation – then he is one more person in an expanding list of curious personnel changes. In recent months Poker Stars live event management has become a fast-paced band playing musical chairs with increasing visibility to live tournament players.

First, there was Thomas Kremser, EPT’s longtime Tournament Director. He issued a press release, rather than direct notice to the Company, of his disinclination to continue contract talks for an eighth season. Along with the departure of Kremser came an end to the seasoned and collaborative dealer and floor staff team under the umbrella of TK Poker Events.

Next, at the end of 2011 John Duthie, the founder of the Euro Poker Tour, parted ways with PokerStars. Mr. Duthie had been responsible for developing and executing with flair, the concept for a prestigious poker tour in Europe – one that would allow an online company massive exposure through sponsorship of televised live events. Noting his desire to ensure the news went around, Mr. Duthie posted on a popular poker forum his decision not to renew his contract.

During the PCA there was proof of yet another seismic shift in the management of live tournament fare. Jeffrey Haas, the managing director of Global Poker Tours Limited since its beginnings (this is the PokerStars-related company in charge of live events), welcomed the huge crowd of players that descended on Paradise Island for the PokerStars Caribbean Adventure. His welcome message ended with his name and the GPTL company name, but without any title associated with Mr. Haas.

According to two colleagues, Mr. Haas has enjoyed a last hurrah at the PCA, as part of GPTL, but they noted that Mr. Campos had revised Mr. Haas’ responsibilities months earlier – taking him away from GPTL to concentrate on the development of social media initiatives.

As for Gabi Campos, his reign at PokerStars seems to be over – all but for the proverbial fat lady singing her song. PokerStars and Gabi Campos were called separately for comment. Both sides remained silent.

Since the April 15 indictment U.S. v. Scheinberg et al, and the related civil forfeiture actions, the warring protagonists have not been short on words. The media has lapped them up, sometimes with more accuracy, sometimes less.

Do facts matter?

In September, the Wall Street Journal hopped onto a US Department of Justice press release, reporting the DOJ’s amended civil forfeiture action that named additional defendants. The publication missed the nuance and mistakenly referred to the online poker companies referenced in the DOJ’s criminal and civil actions of April 15th as indicted; this was not and is not the case.

After being questioned by Poker Player Newspaper, the Wall Street Journal got their facts straight — but without owning up to the original error.

Other media picked up on the same press release and referred to the newly named defendants in the amended civil forfeiture action — Full Tilt Poker directors Howard Lederer, Chris Ferguson, Rafe Furst, and Ray Bitar — as indicted. The only FTP director indicted thus far is Ray Bitar.

Is the US Attorney gearing up to bring more charges?

Meanwhile, Preet Bharara, US Attorney for the Southern District of New York, continues to hype his ongoing investigation — without elaboration, Mr. Bharara’s now familiar refrain spawns periodic speculation in both the poker world and the legal world. But, according to one former senior federal prosecutor, “The Government cannot expand the current indictment; there would have to be a new grand jury empanelled to proceed down the road of an indictment of additional parties related to the current cases.”

Are “off the record” conversations and anonymous quotes guaranteed?

Careless homework, loosely analyzed speculation treated as fact, and miscommunications between reporters and their sources are always potential trouble. Take the case of CNN in its dealings with legal counsel representing Group Bernard Tapie, the company presently expected to complete a deal to acquire the Full Tilt Poker brand.

In November, CNN, one of the biggest stakeholders in news broadcasting, blew its obligations on an embargoed story. One of its reporters pulled the trigger on an article prematurely and misstated critical facts along the way. In a visible commitment to damage control, CNN took responsibility for the errors and corrected them. But CNN never filled in the blanks as to how and why the story saw the light of day before it was reviewed for accuracy or approved by Tapie’s lawyer, as apparently had been agreed.

Will the media stop misreporting on the anticipated deal among GBT-FTP and DOJ?

Bad reporting invariably leads to sources closing off access. This has never been truer in the poker world than this past month. A big buzz was created by GBT’s decision to share with the public the contents of an agreement with the DOJ that would create a framework for acquisition of FTP’s assets. Since the agreement required dissemination of the details to FTP shareholders for their approval, it may have seemed like a no-brainer to put the company’s lawyer in charge of publicly explaining the document.

But after the CNN misfire, a slew of additional related misstatements by reporters far and wide appeared soon thereafter. According to one source inside the tent, among the faulty assertions was the claim that Full Tilt approved the GBT-DOJ deal, well before the matter was placed on the table for the necessary vote. Similarly, there have been reports of a transfer of assets in progress without a scintilla of public word from any of the parties that would be responsible for such maneuvers.

Information related to the GBT’s proposed acquisition of FTP has come to a virtual standstill since late November. Several lawyers familiar with the ongoing talks say it is not plausible that a deal will be done before the end of January and caution that there could be plenty of tension in the deal before it is resolved one way or another.

It stands to reason that the escalated flow of misinformation is disruptive to the parties involved in trying to make a deal, and increasingly frustrating for FTP customers who have been riding an interminable roller coaster between resignation about substantive losses and high hopes for a speedy recovery of their locked funds.

But this may be the real reason for the DOJ’s decision to remain mum on negotiations in progress — including even the existence of a DOJ-GBT agreement that was confirmed to Poker Player Newspaper by lawyers for Tapie and Full Tilt.

Has the DOJ muzzled the protagonists?

In recent weeks the lawyers surrounding the deal have lost their collective voices, begging off all interviews and queries about the ongoing negotiations. The best one can get from them is that matters are moving along, and that in due course in an orderly way — news will be released, but not necessarily on the media’s preferred timetable.

Lawyers engaged in other parts of the DOJ’s prosecution of online gaming have observed that the US Attorney’s Office — especially the Southern District —does not appreciate others stealing their thunder. One senior partner from the world of “big law” adds, “There will probably be a much tighter lid on communications in general and the poker press will probably feel it more.” Yet it is the mainstream press that has published far more visible little bloopers.

Did the New York Times do justice to the DOJ’s memo on the Wire Act of 1961?

Last week the New York Times let no grass grow under its feet following the DOJ’s curve ball in its release of a startling internal legal opinion memo shifting its longstanding policy toward the Wire Act of 1961.

The New York Times reported that DOJ had called a foul on itself. In doing its homework, the “Old Gray Lady” noted DOJ’s assertion that the 1961 Wire Act’s prohibition of online gambling would be no more. Evidently, DOJ finally concluded this was a half-baked idea that should be tossed to the winds.

DOJ reverted to its original position from back when the legislation was originally passed. The Feds now say the Wire Act is directed at sports events and contests, effectively dismissing it as irrelevant to other forms of gambling – particularly noting lotteries.

Like most of the poker media, the Times heralded the opinion in its headline, “Ruling by Justice Dept. Opens a Door on Online Gambling.” True! Things are looking mighty fine for the prospects of legal intrastate poker. But the incomplete tabloid-like headline gives no hint of critical facts that could present a bundle of thorny issues for online poker — until deep inside the article. In paragraph 18 of the NYT report, the reader first learns, “The new policy merely reverses the Justice Department’s longstanding position that all forms of online gambling are illegal in the United States. It does not necessarily pave the way for national rules governing online gambling.”

Did the New York Times prove itself confused about FTP?

In another lapse, the “newspaper of record” also would have readers believing that Full Tilt Poker was based (licensed) either in Antigua or the Isle of Man. By this time, most of Full Tilt’s customers probably know better and so does most of the media. FTP has roots in California, was incorporated in Aruba, has its headquarters in Dublin, a secondary license with the Mohawk tribe of Kahnawake in Canada, and held its primary license in Alderney until late September.

FTP’s overseers finally sent the Company packing, after obtaining all of its outstanding licensing fees. The Alderney-based regulators got a token Christmas gift from the New York Times—a rare pass on its association with FTP.

Did the New York Times miss the tug boat?

Most press has become increasingly scathing in its criticism of Alderney as the base of operations of FTP’s online gambling business. Many FTP players see Alderney’s oversight — or lack of it — as the primary cause of their troubles. The Former Chairman of the British Gambling Commission, Peter Dean CBE, is presently heading an independent investigation into AGCCs handling of the affair. The AGCC sought out the independent investigator, but at this point, it is of little solace to players who expect to be bogged down with burdensome responsibility in efforts to reclaim their funds.

While the FTP-DOJ-Tapie machinations ripen in the Manhattan US Attorney Office, the DOJ’s legal opinion memo released last week has put the poker world and the legal world into full throttle as the proponents and naysayers in the development of intrastate poker jockey for winning positions.