Buying Full Tilt Poker
Oct. 9, 2011, Posted by Submission
Why is someone thinking about buying Full Tilt Poker, isn't it just cheaper to start from scratch?
During my daily internet forum troll, I've been seeing this kind of question being asked for months now. With the current progress with the Bernard Tapie Group investment/buyout, now seems a good time to write something a bit more in depth.
FTP still has a fair few assets on the positive side of the balance sheet that give the company worth:
- The Full Tilt Software
- The Pocket Kings staff
- The US Player database
- The Rest of the World (RoW) Database
- "Big Name" Player Contracts
- The FTP Brand
The Full Tilt Software is arguably the best in the business, and has a fair amount of worth just on it's own. As it stands it has the only operating "Rush" style poker, and seemed to have good security and back room operations. I have also heard that further developments were still in production when Black Friday hit.
If this came onto the open market, it would spark a bidding war, and would probably sell for tens of millions of dollars.
The Pocket Kings Staff have a wealth of experience both in dealing with the software above, but also in dealing with some of the pitfalls of online poker, such as bots, collusion and other cheating. Admittedly the timeframes that FTP Customer service worked to were always a bone of contention, and any new owner would want to improve this. We also know that large number of staff have either been made redundant or have left the company, so this diminishes the overall value of the staff. However the back office procedures are in place, and these (apart from the ones involving money) seem to be fairly robust.
The US Player Database still has value, even though the chances of Online Poker regulation in the US is still some time away. These players have proven that they are willing to deposit to play online, and most of them did so when it was a more difficult process. These players would be the core of a new US online boom, and any US facing site would be very happy to market to these players, even if they only got a 20% pick up. The value of this information will only go up the nearer US regulation of this industry seems. US Bricks and Mortar casinos will be the most likely buyers.
The Rest of the World Database has more immediate value. If FTP were to sell this, a site could offer "Transfer Bonuses" to entice players to join a new network. Most of these players will have already joined other sites, but a decent enough bonus could make them think about switching to another site. Probably less valuable than the US data as most of these players have already moved on.
The "Big Name" Player Contracts such as Phil Ivey and Tom "Durrr" Dwan are still valuable. Given their worldwide appeal as the "best in the business" they are a potent marketing tool for any site. Not sure if they have a get out clause in their contracts, or how long they are contracted for, but these players using a resurrected FTP would attract new and old players to the site.
The FTP Brand, while tarnished still has a good market placing. Yes, I really did just type that. Even given all the revelations made since Black Friday about the poor running of the site, and the financial irregularities, the marketing money spent over the past 5 years has placed FTP firmly into the minds of the casual poker playing populace.
In the UK, the actual press coverage of the FTP issues has been pretty poor, and in a non scientific straw poll I've been taking since Black Friday, only a small percentage of these casual players have had any idea of what's been happening, or if they have it's only been the barest information.
For the most part, outside of the online forums, where most of the regular players go, FTP's brand is tarnished, but not irreparably. A marketing campaign promoting the "New FTP" would go a long way to repairing it. The casual fish, who are the lifeblood of any online poker site, haven't really been keeping up with the developments.
So, I still think FTP has value, and it looks Like Bernard and Laurent Tapie do as well. What the true financial value of the company is, I'll leave to the people who have much more information than me. What I do know is that I'd much rather be looking at re-launching FTP than starting a new site from scratch. The costs of launching a site that would gain the market share that a newly re-opened FTP would get would be massive, and would in my opinion be far greater than trying to save FTP. I just hope that The Tapie Group are able to make the numbers stack up for them to take advantage of this.
Rob "Hippy80" King is a recreational poker player and businessman with a history of working in Financial Services. He turned his thoughts to writing about online poker after Black Friday, and has spent much of his recent free time delving into Full Tilt Poker and its legal issues. You Can Follow him on Twitter