Full Tilt Poker – No line on the horizon

Sept. 1, 2011, Posted by Pokerfarm

Forbes.com received an official statement from Full Tilt Poker on the subject of paying back money to their customers.

They (FTP) have addressed issues concerning Black Friday and U.S. government’s involvement in player funds seizure but have failed to tell us anything new or promising. Here’s the statement in full:

“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 let us take a step back in recent history. Full Tilt Poker were warned two years ago that their payment processors were unfit for US deposits. They arrogantly ignored the warning signs and continued to receive countless deposits from a huge number of American customers that simply cannot be “collected” via bank accounts. What actually happened was a bubble situation in which Full Tilt was in fact “lending” the money to players, or to put it more simply, the money shown on their balances was just numbers on the screen. The bubble burst and it was a $128 million one.

That truly outrageous fact is that FTP are labeling Black Friday events as “unprecedented” when they clearly knew what could happen in the worst case scenario. The biggest scandal in the history of online poker is yet to see its true effects and the players involved are certainly determined to get their money back.

Only time will tell how this situation will resolve itself. But time is not on FTP’s side as they are sure to lose a gigantic portion of their market share and their respective customer database. If they are ever to come back, that is.