July 19, 2012
Day seven of the 2012 World Series of Poker (“WSOP”) started with the final 27 players. Among the finalists, the poker gods favored two women but burst their bubble in the 11th and 10th spots. Before the day began, the most adored marquee names had all disappeared. At the close of the WSOP’s summer season, PokerStars’ pros were out of the hunt. And, word was trickling out that PokerStars’ top brass were occupied with more far reaching matters on the WSOP’s last day of summer play.
Is There A Real Deal In The Cards?
There was still no official announcement on the anticipated deal that would turn over to PokerStars the assets of Full Tilt Poker (“FTP”) and no word on the concrete basis on which to believe that Full Tilt customers were about to see repayment of their locked up funds.
Is There Light At The End Of The Tunnel?
Following months of hot and heavy discussions with the US Department of Justice— after the Government’s civil forfeiture action and indictment in Scheinberg et al April 15, 2011—Poker Stars and FTP are still caught up in the crackdown on online poker. A few short weeks ago, PokerStars and Full Tilt and their key executives seemed poised to breathe easier before the close of the 2012 WSOP— until the US Department of Justice caused more than a few new tremors.
Ray Bitar And Guy Laliberte On Different Stages the Same Day.
On July 2nd, Ray Bitar, the top honcho at FTP’s Dublin headquarters crossed the ocean to face the DOJ, surrendering voluntarily. The FBI swooped into Kennedy Airport for his arrival, greeting him with a superseding indictment. The expanded charges, if proven, could land him behind prison walls through the prime of his life, if not longer. Apparently, Bitar was unaware of the blaring trumpets that awaited him.
The news of Bitar’s arrest came down on day two of the WSOP’s Big One for One Drop, the million dollar buy-in tournament with a huge charitable component; it was the brainchild of Cirque du Soleil founder and high stakes poker player, Guy Laliberte.
Laliberte’s rising chip stacks on day two kept spectators breathless , rooting for the man behind the charity that drew 48 players who anted up for fun, and more fortune– and the opportunity to help quench the thirst of an impoverished population nearing two billion around the world.
But even with all of this WSOP-based fanfare, Bitar’s enlarged troubles were big news in the hallways beyond the Amazon room. The wags got into high gear, debating the future fate for Howard Lederer, Chris Ferguson and Rafe Furst, each of whom were members of the FTP Board of Directors when the DOJ brought the hammer down on online poker.
Poker Stars Was Expected To Take The Stage During The WSOP.
PokerStars, on the other hand, according to the tuned-in chatterers in residence was rumored to be in in far better shape. From the beginning of the WSOP, Caesars personnel, professional players and poker media alike were hearing through multiple grapevines that PokerStars would announce it had acquired the assets of FTP and would take prompt responsibility for paying back the players, in full—thus trumping whatever else might be happening on the grounds of the WSOP.
Shortly before the main event of the WSOP, word began to leak uncontrollably around water coolers on both sides of the pond First there was certainty that day 1A would bring the news. Next came the naysayers explaining that Poker Stars did not want to be inundated with requests for cash outs for main event entries. Next came predictions of an announcement on day 1B, but the most reliable pundits close to PokerStars were saying for days that the company had a definite plan to announce the deal on July 11th , an off-day for half of the WSOP main event Day 2 contenders. One would be hard pressed to argue that PokerStars was looking to steal the WSOP’s thunder. The announcement did not come.
Months Of Progress Is Thwarted.
Early last week, lawyers for PokerStars were working late into the evening, as the WSOP was rounding the bend to its final days of the summer season. PokerStars was still expected to complete the deal, momentarily, and make the formal announcement the poker world craved to hear.
At the 11th hour, however, the DOJ apparently threatened PokerStars’ bid to become the hero in the online poker fiasco of the past year. So, lawyers for the company would have no choice but to shift their attention to the ongoing prosecution. They filed motions to dismiss the civil charges so as to assure their legal rights to do so within filing date requirements. With the same needs, Lederer, Ferguson, and Furst filed similar motions in connection with their cases. The filings created a frenzy of speculation as did the DOJ’s motion to dismiss charges involving Poker Stars and FTP in Kentucky, during the same period—which looked more favorable to the prospects of completing a deal.
According to two lawyers with close ties to the protagonists, the skinny was simple: new issues as well as details related to the ongoing negotiations had developed, raising questions—but no answers– as to whether PokerStars’ plans to take over FTP will come to a close.
While Vanessa Selbst, a top PokerStars player was still heading toward another record finish on day six of the WSOP and her fellow Poker Stars Team Pro, Jan Heitman stepped into place as one of the final 27 players in the poker world’s “Big Dance,” the mood at PokerStars last weekend reportedly turned less than rosy.
A Quick Review is In Order.
Over the past year, it has been difficult, sometimes, to see the forest for the trees among the many players and multi-pronged negotiations in progress. PokerStars, Full Tilt Poker, and key executives indicted in the clampdown by the DOJ have been involved in both combined and conflicting efforts to resolve their legal issues.
A quick review provides perspective on the recent events and non-events that kept the hallways of the 2012 WSOP full of whispers, in the shadows of the richest and most prestigious poker tournament ever staged.
On April 15, 2011, the DOJ effectively brought down online poker in America. On April 20th, the DOJ entered into “domain name agreements” with PS and FTP in which the sites consented to end all US facing operations except for facilitating repayment of player funds locked out by the DOJ’s actions against the online sites. The Government’s press release was forceful, insisting that the players should be made whole—forthwith. But the Government has never been forthcoming as to how it might assure such a result. Today, it is not clear that the DOJ is committed to making a deal that will insure such an outcome.
PokerStars’ History Since Black Friday is Worthy of Applause
PokerStars for its part stepped up to the plate, unequivocally, during the late spring of 2011, responding to the DOJ’s expectations; returning more than 100 million dollars due to its US players within four weeks after the signing of its domain name agreement with the DOJ. Full Tilt, however, began the dance of delay, soon proving itself as a prevaricator with respect to the safety of player funds.
In late June 2011, FTP was shut down by its regulators, the Alderney Gambling Control Commission (“AGCC”). The AGCC’s own conduct as overseers has been alternately defended and challenged in recent months while FTP customers have been left out in the cold, to the tune of more than 300 million dollars, awaiting the DOJ’s further actions.
Since last summer, PokerStars has been well-positioned to show itself more like victims of a misguided DOJ that was riding herd on a favorite American pastime, than as villains taking advantage of their players. PokerStars has acquired many new online poker licenses in Europe, has supported taxation on gambling winnings in the EU in a similar manner to US policies, and has praised tight licensing and regulatory requirements of online poke sites.
PokerStars Proves Itself.
From all reports available, PokerStars is prepared to make payment of a monumental fine estimated to reach over $700 million dollars to the US Government in consideration of a global settlement of its legal troubles. And, apparently, the company stands ready to acquire FTP’s assets in a manner that will result in their customers being repaid their outstanding funds within 90 days thereafter.
Now, one might ask, “Will the players become the victims of a Government bound and determined to show beyond a shadow of a doubt the fullness of its clout? “ PokerStars has shown itself as a highly responsible business in its dealings with poker player funds. It remains to be seen if the Government will show equal concern for players by moving forward with dispatch, to perfect the deal.
In the interim, the WSOP’s plans to complete the 2012 tournament with the final nine is a sure bet from October 28, 2012-October 30th when the 2012 WSOP winner will be crowned.