Full Tilt online poker players in line for $731m refund
ONLINE POKER players will have $731 million repaid to them as part of a deal that will save the struggling, Irish-based Full Tilt Poker group.
Full Tilt, whose main operating companies, Pocket Kings, are based in Cherrywood in Co Dublin, had its licences suspended last year when a US court accused it of defrauding hundreds of millions of dollars from clients.
Its rival, Isle of Man-based Poker Stars, has agreed to take over the group in return for repaying $731 million to online poker players in the US and around the world.
Under the deal’s terms, it has agreed to pay $547 million to the US government, which will use that to reimburse players in its jurisdiction.
Poker Stars has also agreed to pay a further $184 million to players based outside the US. In return it will acquire Full Tilt’s assets and business, much of which are based in the Republic.
Last month, Full Tilt chief executive Raymond Bitar pleaded not guilty in a New York court to a series of charges alleging that he defrauded the website’s clients of up to $430 million, which was paid to the company’s executives and owners. US attorney Preet Bharara is also taking proceedings against a number of other Full Tilt executives, along with Irish-registered and based Pocket Kings Ltd and Pocket Kings Consulting.
Mr Bharara moved against Full Tilt, Poker Stars and Absolute Poker in April of last year. As a result, Full Tilt lost its licences in autumn, following which it has laid off about 200 of the 700 or so staff who were working in its Dublin offices. According to reports yesterday, the deal with the US government is a settlement of the case against the two poker companies, but neither has admitted any wrongdoing.
Mr Bharara said his office was pleased to announce the settlements by Full Tilt and Poker Stars “which allow us to quickly get significant compensation into the victim players’ hands”.
Last year, the US government indicted the founders of both companies and a third, Absolute Poker, on criminal charges of illegal gambling, bank fraud and money laundering. Prosecutors also brought civil suits to recover $3 billion in profit from the three companies.
The crackdown stems back to a 2006 law that bars US banks from transferring money to offshore gambling websites or online payment services they partner with. Online gambling is legal in the US, but US companies are banned from operating gaming sites.
International companies such as Poker Stars and Full Tilt offered websites in the US, but those were shut down last year when the government accused the companies of using fraudulent means to channel payments from US players in order to evade the 2006 law.
Poker Stars continues to operate outside of the US but Full Tilt became insolvent and lost its UK licence when it was unable to reimburse players the money in their accounts.
Poker Stars will relaunch the Full Tilt brand outside of the US within the next three months, according to its spokesman, Eric Hollreiser. – Additional reporting: The Financial Times Limited 2012