Black Friday came on April 15, 2011, as Full Tilt, PokerStars, and Cereus were shut out of the U.S. market.
Today, August 31, 2011, Full Tilt Poker has finally emerged with its first official statement on the matter of continued operation, legal hurdles, and especially player reimbursements.
Unfortunately, the statement doesn’t seem too appetizing. It goes on to blame the U.S. Department of Justice for executing the crackdown of poker sites, goes on to blame the ongoing seizure of funds from bank accounts owned by Full Tilt Poker, and blames payment processors for allegedly stiffing them and leaving the site holding losses.
In short, Full Tilt Poker seems to be blaming everybody but itself for its current woes while not offering many possible solutions out of its current predicament. While it has been said that additional statements will follow this week, it does not seem like this statement should do much to assuage players’ and stakeholders’ worries about every getting their investments – or their bankrolls – back.
The full statement is below. Reading through the statement makes it extremely clear that Full Tilt never did any sort of contingency planning for a disaster scenario. PokerStars, on the other hand, forecast and prepared for exactly this sort of situation, and was able to settle with American players in a speedy manner than ensured continued goodwill to the site – even if Americans can’t play there anymore.
Full Tilt will never realize that sort of goodwill again.
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.
What a mess.