NEW FULL TILT POKER STATEMENT
Wednesday August 31,2011 : Moribund operator blames $42 million processor theft, US enforcement actions for predicament
The fragmented and at times seemingly uncoordinated Full Tilt Poker public communications system coughed out another statement Tuesday, this time to Forbes business magazine blaming a theft at e-cash processor level and US enforcement for its trials and tribulations.
The company does not appear to have a centrally organised and coherent communications strategy, with lawyers giving ‘exclusive' interviews to selected publications, ad hoc statements to individual publications that say little, and occasionally largely informal forays on to the player internet message boards.
The end result remains the same – players are not being paid, employees are leaving and operations appear to be paralysed.
In the latest statement, issued to Forbes, the company tries to explain why it has not yet paid its players, blaming the Black Friday indictments against two of its top people along with U.S. government cash seizures over many years and a massive theft perpetrated by one of its payment processors – without giving details.
The company admits that it was unprepared for the Justice Department moves on Black Friday, candidly admitting: “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. 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.”
Forbes points out that Full Tilt Poker did reach an agreement in April with the Justice Department that was supposed to help facilitate the return of funds to players who had large cash balances with the company, but the company’s inability to pay money back has infuriated its players and done little to enhance the brand's reputation.
In its statement Full Tilt notes that U.S. Justice Department actions over the last few years against online poker payment processors resulted in the U.S. government seizing $115 million of player funds located in U.S. banks.
The struggling company, which faces a $3 billion DoJ claim in a civil lawsuit on top of the criminal indictments of two executives, additionally claims it was the victim of a massive heist in which one of its key [unidentified] payment processors stole $42 million from the company.
“Until April 15th, Full Tilt Poker had always covered these losses so that no player was ever affected,” the company statement asserted, adding that it experienced “unprecedented issues with some of its third-party processors that greatly contributed to its financial problems.”
Forbes notes that Full Tilt was taking major risks; according to a plea agreement entered into with the U.S. government by one indicted payment processor, Bradley Franzen, the online poker firm was dealing with a $60 million shortfall earlier in 2011 that was created by crediting player accounts despite not being able to debit funds from customers through financial transactions.
And exacerbating the problems, the Alderney Gambling Control Commission suspended Full Tilt’s main e-gambling licenses because of issues that arose as part of a special investigation – a situation still not resolved, with a second public hearing by the AGCC due before September 15 2011.
Full Tilt has been trying to find investors who could put some cash into the business. The latest statement now reveals that six investment groups, including hedge funds and operators of other Internet firms, have visited FTP's Dublin headquarters and that the company has hired an unnamed financial advisor 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.”
With its reputation badly damaged, overwhelming financial and legal troubles, and an apparent reluctance on the part of potential investors to risk capital in the company, the prospect for players being paid looks increasingly remote.
