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Full Tilt Poker Loses Gaming License and Suffers Other Setbacks - Future Uncertain
july 4, 2011

FullTilt Suspended

On April 15th, 2011, known in the online poker community as "Black Friday", the United States Department of Justice indicted the owners and several employees of the three largest poker sites that accepted American players. The indictment coincided with the seizure of funds in bank accounts belonging to the poker sites. Pokerstars, Full Tilt Poker and Cereus Poker all responded by cutting off all American players. Since then, the financial outlook for Full Tilt Poker has gotten progressively bleaker. First, Pokerstars showed up Full Tilt by successfully beginning the process of returning account balances totaling 120 million dollars to players and affiliates within two weeks of Black Friday. Mounting concerns that Full Tilt did not have the cash on hand to return funds (reportedly over 150 million dollars) to American players were exacerbated by press releases consisting of evasive non-answers.

The past week has brought further bad news for Full Tilt Poker and the players that they owe money to. On June 29th, Moneybookers (also known as Skrill) sent a notice to its customers informing them that Moneybookers would no longer be processing deposits to Full Tilt. Moneybookers determined that Full Tilt was disabling withdrawal options for players in an arbitrary fashion to try to prevent a run on the bank. After being unable to resolve the issue with Full Tilt management, Moneybookers decided that they needed to protect customers from depositing funds into what might be a financial black hole. Not only was Full Tilt facing a massive public relations disaster, but now even those still willing to deposit money no longer had one of the most popular deposit options available.

The same day that Moneybookers pulled out, an even more catastrophic event occurred - Full Tilt's gaming license was suspended. The Alderney Gambling Control Commission suspended all play on Full Tilt Poker due to the company "operating contrary to Alderney legislation." The official gambling commission statement provides for a hearing on July 26th to debate the matter. Play on the site quickly came to a halt. The Full Tilt homepage listed the system as being "Under Maintenance" and the official forums were taken offline and have remained unavailable since. Full Tilt now needs to refund all players, not just Americans, and they have no discernible income stream. Prior to the suspension of the license, it seemed painfully clear that Full Tilt did not have enough cash on hand to return funds to the players from the US, but it seemed possible that they could meet their obligations by hoarding the rake from players still legally allowed to play. The suspension of the license seems like a potential death blow for the company barring a reversal during the hearing in late July.

A glimmer of hope appeared the day after, on June 30th, when rumors began spreading on poker websites that unnamed European investors were in talks to rescue the company and pay out players. These initial reports appear to have been confirmed by a Los Angeles Times article stating that a preliminary agreement had been signed with a group of investors who would acquire a majority stake in the Irish parent company, Pocket Kings, and nurse the company through its legal and financial troubles. The details are vague, but there have been rumors that Jack Binion, of Binion's Gambling Hall in Las Vegas, is interested in investing in Full Tilt. As he is an American, it doesn't quite jibe with the LA Times article, and this rumor may not be true. Other whisperings have suggested that another poker network based in Europe purchased the company, but there has yet to be any reliable source naming the new owner. A strong indicator that the deal is legitimate and that the purchasers do in fact intend to bail out Full Tilt is that Phil Ivey voluntarily dismissed the lawsuit he filed against Full Tilt due to the non-payment of players. This means that Phil, a Full Tilt shareholder with inside knowledge, anticipates that players will receive their money.

The future for Full Tilt is still very much up in the air, and even if the site returns in the near future poker players may be wary of trusting the new owners with their money. Furthermore, the state of online poker in the United States is in disarray with the absence of the three biggest players in the market. In the wake of the upheaval, the Merge network has risen to the top of the heap of remaining US facing poker networks and has the most traffic and best game selection of the US poker sites. The most popular skin on Merge is Carbon Poker, as it has been around since 2005 and has a strong reputation with players.

This article was written by our friend Mark over at Poker for Beginners.

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