Full Tilt Poker Finally Gets Dealt
Black Friday seems like so long ago now. April 15, 2011. That’s a year and four months, roughly. It’s also a very long time for all of the players whose funds at Full Tilt Poker have been up in the air.
Poker Stars, the conquering king.
It’s never really been a matter of Full Tilt being able to pay them. Full Tilt was already insolvent, and already was several hundred million dollars in the hole due to both money already seized or lost, before Black Friday. So once the Black Friday massive seizures hit them, they were down not only for the count, as Poker Stars was, they were down on the mat for good.
Poker Stars, on the other hand, quickly rose up, and in fact ended up dominating the poker world like never before. They are now over 10 times bigger than the next biggest poker operation, and also bigger than the rest of the poker sites in the world combined. They wanted more though.
So now, through a deal that was brokered in part by the same U.S. authorities that helped take Full Tilt Poker down for good, the U.S, has agreed to absolve both Poker Stars and Full Tilt Poker from liability in exchange for a massive payment of $547 million over three years from Poker Stars, as well as Poker Stars paying out the $184 million owed by Full Tilt to non-U.S. players.
So How Does This All Make Sense?
So why would Poker Stars even consider spending over $700 million that it clearly didn’t have to, in order to acquire a very damaged brand that some may wonder whether it is even worth taking over for free?
In essence, while they didn’t get it for free, they did get it for simply agreeing to pay out the $185 million that was owed to non U.S. players. The bigger sum, the $547 million, goes directly to the U.S. government as a penalty for Poker Stars allegedly operating illegally in the United States.
So this payment does absolve both Poker Stars and Full Tilt from further liability to them, something that really had to be decided on Full Tilt’s part before anyone would take them over. The big bully down the street had already beat them to a pulp and stole all of their money before, and they have to promise to never do so again, which they did.
Of note though is that both Poker Stars and Full Tilt were allowed to maintain their stance, and the correct stance, that they did nothing illegal in offering online poker to Americans at any point. Ironically, their legal view has since been supported by the U.S. Department of Justice themselves, who after many years of disputing their own court’s ruling that the wire act did not apply to online poker, they finally had to admit that this was true when their stance started to interfere with state lotteries.
So Is All This Money Worth It?
So in a real sense, the $547 million is token payment, where the DOJ, on the face of things, can be seen to save face, although anyone with much of an understanding of what’s going on here is going to see this as what it is, which is just a payoff. In a sense, it can be seen as extortive, given that they had no real interest in this sale other than the potential to harass, which they allowed themselves to be bought out of.
However, neither company now operates in the U.S., and the U.S. government has already done its worst, and although this was enough to bring down Full Tilt Poker like a house of cards, Poker Stars not only survived, but gained prosperity when it was all settled.
So people have speculated that the driving force behind all of this isn’t to simply appease the DOJ, it is looking to set the table for Poker Stars getting back into the U.S. market at some point down the road.
This is the only way to make sense of any of this in fact, and in spite of Poker Stars’ dominant role in online poker today, having a pending case against the DOJ would have proved to be an obstacle that would first have to be eliminated prior to having a shot at that brass ring.
We’ll have to see how that pans out, but it’s clear that Poker Stars is the 800 pound gorilla in the room and wants to throw its massive weight around state side as well. So this massive payment puts them in much better shape, and they will have two brands to promote there now.
How Will This Affect Us As Affiliates?
The biggest thing for us here has nothing to do with either Poker Stars of Full Tilt in fact. There’s over $300 million of poker money out there that has been sitting in limbo, and we know that over half of this is going to be paid out by Poker Stars themselves, so that’s a pretty nice addition to the overall amount of money invested in online poker right there.
It remains to be seen how much of this money will remain in the online poker realm, especially since it will be a year and a half or so since it was lost. It’s even more speculative what will happen to the around $150 million owed by Full Tilt to U.S. players, which according to Poker Stars will be paid out in time by the people who actually hold their money, with is the DOJ.
In any case, there’s no doubt that this will provide a big infusion of poker money into the scene, and at least in theory allow the U.S. market to grow significantly from where it is now. So all of this adds up to more money for us, and it’s just a matter of how much more, which we will have to wait on and see.
Some affiliates have speculated on whether or not they will be able to recover money owed to them by FTP. I honestly am still very skeptical that we’ll ever see any of this, but I guess anything is possible. I wouldn’t hold my breath for this though.
In the end, this still can only be a good thing for everyone, for affiliates, for players, for the U.S. government, for FTP, and for Poker Stars. Everyone seems to win here.