Serious problems at Purple Lounge

[vinylweatherman]

I don't want to detract from this important Purple Lounge and Media Corp topic, but I believe Viaden's "organisational changes" may be linked to the recent news that Playtech has bought 20 percent of the company.

Now...on with the Purple Lounge show.

If, as the rumours suggest, Media Corp owes money all over the industry, then it is difficult to see how players will be paid from existing resources, which are clearly limited.

In the absence of any sort of communication whatsoever (other than stalling for more time) Media Corp will increasingly become the subject of speculation as owed players and other interested parties try to figure out where this mess is headed.

Perhaps Drummond is trying to raise more capital, but it appears from the info regarding Gaming Media Group and Devilfish (see the earlier posts here) that his preferred course of action is making some sort of deal that releases him from resposnibility for PL.

One can only hope that whoever he manages to clinch a deal with insists that players be paid as part of the package.

With the poker side looking like it's going to Devilfish, the most likely destinations for casino players seem to be Casino Rewards or Palace Group, which in the past has meant players' funds have been preserved, albeit with a significant delay.

My point regarding Viaden was that time and time again players are lied to with the "technical problems" excuse, so much so that when a casino GENUINELY suffers an unusual technical problem it is going to be assumed that again it is a lie to cover an impending crisis. Club World could be suffering the same fate now, with their current long delays in paying withdrawals scaring off depositing players, which can turn a problem into a crisis.
Another point about Viaden is that even if Playtech take a 20% stake, what the hell does this have to do with a licensee's ability to continue operating

Regulators can't be trusted to ensure players' funds are protected, as apart from serial failures at the LGA, even Alderney didn't spot the crisis at Full Tilt until players' funds were gone, and it needed a rescue deal to get them paid.

The PL crisis is now clear, yet even now the LGA have said nothing, and refuse to comment when asked about it.

Despite this, Media Corp are still trading it seems, only the shares have been suspended. If they are insolvent, they are breaking the law by continuing to trade in ANY of it's businesses, and we could see a criminal investigation later this year. It appears that between February and closure last month PL took players' deposits when they were unable to pay many withdrawals due to lack of funds. This is almost certain to lead to an investigation, and possible criminal charges against some directors. The company could also be kicked off the stockmarket.

 

[$97 All in.]

Has anyone heard anything?

They are late & overdue on their update as to why they aren't going to pay out.

 

[The Dude]

Has anyone heard anything?

They are late & overdue on their update as to why they aren't going to pay out.

Nothing. No response from PL's CEO (who visits this forum regularly - well, up to last Wednesday). Nothing from the LGA.

Covered in last Friday's Webcast -

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[$97 All in.]

Has the CEO posted before? What's her user name?

 

[specialK]

Thank you for your ongoing patience.

Purple Lounge is working hard on a resolution to our current situation and we hope to give you further news by the end of the week. We are anticipating a relaunch of the gaming services in the very near future.

Many thanks,
The Purple Lounge Team

 

[mattsgame]

Thank you for your ongoing patience.

Purple Lounge is working hard on a resolution to our current situation and we hope to give you further news by the end of the week. We are anticipating a relaunch of the gaming services in the very near future.

Many thanks,
The Purple Lounge Team

Is this a joke? a relaunch anyone who touches anything to with anyone from PL now has rocks in there head.

 

[The Don]

As if anyone cares if the services are relaunched. The only thing they should be talking about is if they're going to pay what they owe.

 

[trebord]

Dear Robert,

Thank you for your ongoing patience.

Purple Lounge is working hard on a resolution to our current situation and we hope to give you further news by the end of the week. We are anticipating a relaunch of the gaming services in the very near future.

Many thanks,
The Purple Lounge Team


same email here too.... :/

 

[nikantw]

As if anyone cares if the services are relaunched. The only thing they should be talking about is if they're going to pay what they owe.

Yes, but if you have money in them (like I do), anything is better than this.

 

[jetset]

This looks like yet another stalling tactic - it's the third time players have been fobbed off without even an attempt at an excuse, and perhaps Drummond and his people are battling to sell off the company, given its apparently parlous state and the growing negative publicity.

These people really are beyond the pale....and their credibility has shrunk to zero in my eyes.

 

[KasinoKing]

These people really are beyond the pale....and their credibility has shrunk to zero in my eyes.

Your eyes are not alone!

KK

 

[$97 All in.]

This looks like yet another stalling tactic - it's the third time players have been fobbed off without even an attempt at an excuse, and perhaps Drummond and his people are battling to sell off the company, given its apparently parlous state and the growing negative publicity.

These people really are beyond the pale....and their credibility has shrunk to zero in my eyes.

Both Justin Drummond (Executive Chairman) & Sara Vincent (CEO) have left the company this morning.

"Justin Drummond and Sara Vincent have resigned from the Board with immediate effect and have left the Group to pursue other business interests."

That Drummond is finally out on his ear is great news, he was running the company into the ground, had long ago lost the confidence of the shareholders & the City & was regarded as a damaged goods & a severe liability. The new crew in charge certainly can't be any worse.

Casinomeister, perhaps it's time for a new phone call to the new boss to see WTF is going to happen?

All the announcements issued this a.m.

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[rainmaker]

.

As $97 All in reported, the suspension has been lifted and MediaCorp is currently down over 40%

 

[jetset]

Looks like Drummond and Vincent bailing out before it catches up with them...unless of course the Intabet deal required their departure.

I think Gaming Media Group were smart to avoid a deal with Media Corp, which I note is reporting a gross profit decline of 27 percent.

After all this silence, four press releases in a day!

Good riddance imo - the industry does not need this sort of operator.

Financial Highlights for the six months to March 2012

Revenues of £16.7 million (2011: £13.3 million) an increase of 26%

Gross profit of £1.9 million (2011: £2.6 million) a decrease of 27%

Loss before tax of £1.3 million (2011: Loss £437,000).

Cash balances of £0.52 million (March 2011: £1.5. million)

Justin Drummond, Chairman of Media Corp, commented:

"This has been a very difficult period for the Group, though I believe with the acquisition of Intabet Limited together with further financing, announced today, the Group can now look forward. I am stepping down today, following the announcement of the Intabet acquisition and I am confident that in Phil Jackson and Adam Fraser Harris, who are being appointed as Chairman and Interim CEO respectively, the Group is being left in experienced and capable hands.

I remain a major shareholder in Media Corp and believe that with the acquisition, new direction and senior management team the Group has an exciting and, I hope, a prosperous future ahead."

 

[jetset]

There's not a lot in the Intabet release to work with regarding the Purple Lounge player situation:

"With the restructuring of Purple Lounge now underway, the directors believe the acquisition of Intabet will allow the Company to re-establish a newly branded online casino and poker room to run alongside the new betting platform that Intabet provides. The directors are also hopeful that, despite the negative impact Purple Lounge's restructuring has had on the prospects for the Hippodrome deal, the purchase of Intabet may nevertheless allow that deal to proceed."

On the positive side, the new Intabet guys taking over as chairman and CEO at Media Corp appear on paper to be better equipped in a business sense, and they're into Barclays Bank for a GBP 750,000 loan facility, so perhaps players can hope for payments reasonably quickly.

Interesting to note that the PL debacle impacted Media Corp's relationship with the Hippodrome casino.

 

[The Dude]

"With the restructuring of Purple Lounge now underway, the directors believe the acquisition of Intabet will allow the Company to re-establish a newly branded online casino and poker room to run alongside the new betting platform that Intabet provides. The directors are also hopeful that, despite the negative impact Purple Lounge's restructuring has had on the prospects for the Hippodrome deal, the purchase of Intabet may nevertheless allow that deal to proceed."

As if they didn't realize that many of their players would be reading that statement.

And the players continue to wait for word on the status of their accounts - Purple Lounge's website is still claiming players will be notified in seven days. They didn't even have the courtesy (or professionalism) to date the announcement (much less pay or contact their players).

Restructuring of Purple Lounge? How about a press release and email blast to their database so their players know what the hell is going on. Either they are totally incompetent or arrogantly aloof. Intabet should begin their launch with a trip to the Rogue Pit. If this is how their owners treat players, it can only lead to another disaster.

Media Corp should be in the shoe sales business, not the gaming industry.

 

[$97 All in.]

Justin Drummond Finished as Chairman of Loss Making Media Corp.

this fuckwit has pissed away millions.


Old / Expired Link

Following the closure of Purple Lounge online poker room, and today's reported £4,623,000 in cumulative losses over the past 24 months, Justin Drummond has resigned from his position as chariman only three months after resigning from his post as CEO, according to a statement on the company's website, 'Justin Drummond and Sara Vincent have resigned from the Board with immediate effect…'

Additional announcements have indicated that the company had lost £900,000 on its Purple Lounge venture which was recently closed. According to website PokerFuse.com (www.pokerfuse.com) 'The casino and poker room are abruptly taken offline without warning' and 'customers have yet to be told how they can withdraw balances'. There has yet to be comment from their regulators as to potential action against the company or against Drummond himself on behalf of Purple Lounge players.

Driving the company forward will be Phil Jackson and Adam Fraser-Harris who have joined the Board of Media Corp as non-executive chairman and interim CEO. Media Corp has also announced its acquisition of Intabet Limited and a secured loan of £750,000.

 

[jetset]

As if they didn't realize that many of their players would be reading that statement.

And the players continue to wait for word on the status of their accounts - Purple Lounge's website is still claiming players will be notified in seven days. They didn't even have the courtesy (or professionalism) to date the announcement (much less pay or contact their players).

Restructuring of Purple Lounge? How about a press release and email blast to their database so their players know what the hell is going on. Either they are totally incompetent or arrogantly aloof. Intabet should begin their launch with a trip to the Rogue Pit. If this is how their owners treat players, it can only lead to another disaster.

Media Corp should be in the shoe sales business, not the gaming industry.

Good point re an immediate advisory to players...that would certainly be my top priority in a situation like this, and from a purely business perspective it just makes sense.

I'm surprised that they were not executing this as Drummond and Vincent walked out (or were pushed out) the door, because during the negotiations and due diligence process they must have become aware of how Media Corp in general and Purple Lounge in particular is being perceived by both shareholders and players.

There's talk in those releases that suggests that Intabet does not yet have a licence, and as the LGA has terminated PL's licence that leaves them without a jurisdiction at present...not that the LGA made any useful contribution in this sorryass affair.

 

[The Dude]

this fuckwit has pissed away millions...

Please do not resort to name-calling. This is inappropriate for this forum.

 

[specialK]

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Four Weeks Since Purple Lounge Closed: The Community Demands Answers
The failure of Purple Lounge will do yet more damage to the perception of online gaming in the eyes of the public. Shareholders, the media and regulators both offshore and in the London Stock Exchange must demand that Media Corp satisfactorily and promptly resolves the issue.

 

[ChopleyIOM]

I'm genuinely not taking the piss here, but how does a reasonably big online casino go bust?

All the games have a house edge, in the case of the slots, quite a generous house edge. The days of bonuses that could be ruinous for the casino are long done, and your average set of T&Cs covers every eventuality (literally every eventually with the catch-all clauses).

Surely they just sit back and watch the money roll in? Seriously, how can you mess that up?

What sort of licensing costs do MG ask for? Are they very hefty?

 

[GrandMaster]

There are costs, for example in processing payments which players don't seem to realise. Then there are employees' salaries, licence fees, marketing costs, ...

 

[Simmo!]

I'm genuinely not taking the piss here, but how does a reasonably big online casino go bust?

All the games have a house edge, in the case of the slots, quite a generous house edge. The days of bonuses that could be ruinous for the casino are long done, and your average set of T&Cs covers every eventuality (literally every eventually with the catch-all clauses).

Surely they just sit back and watch the money roll in? Seriously, how can you mess that up?

What sort of licensing costs do MG ask for? Are they very hefty?

I sat down several years ago with someone from an MG operation to try and get a handle on this because I thought exactly the same as you.

As he talked I jotted down all the costs and I remember walking away thinking that it wasn't nearly as profitable as I thought it was. Now I do remember we factored in a marketing budget and I can't remember what that was but acquisition is an important factor in building a business obviously. Processing costs have risen substantially since then too. Licence fees were significant (plus network progressive contributions) I remember - sorry it was too long ago to remember the numbers.

Bottom line is I guess that no matter how lucrative a market is, a business still requires good management to be successful.

 

[jetset]

Pokerfuse article just up:

When a highly recognizable online gaming brand—owned by a publicly listed, UK-regulated, London-officed media corporation—goes offline, tells their customers nothing about their deposits, and refuses to talk to the media, it speaks volumes:

“Media Corp must immediately announce that player funds are secure and enable players to withdraw these funds.” Not just about the valueless rubber stamps of offshore gaming regulators, but about the false sense of protection a customer has dealing with a publicly-traded company.

More/....

 

[raj]

I sat down several years ago with someone from an MG operation to try and get a handle on this because I thought exactly the same as you.

As he talked I jotted down all the costs and I remember walking away thinking that it wasn't nearly as profitable as I thought it was. Now I do remember we factored in a marketing budget and I can't remember what that was but acquisition is an important factor in building a business obviously. Processing costs have risen substantially since then too. Licence fees were significant (plus network progressive contributions) I remember - sorry it was too long ago to remember the numbers.

Bottom line is I guess that no matter how lucrative a market is, a business still requires good management to be successful.

Dead right Simmo,

People think running an online gambling site is a licence to print money, but it really isn't. Marketting and advertising, promotional costs, games royalties and jackpot contributions, taxes, transaction fees, chargebacks, affiliate commissions, customer support costs, chat host costs, etc. All have to be taken off , then you have to pay your own staff.
I think many here would be surprised to learn just how little is left at the end of it all
Just typing this makes me want a large scotch

Raj

 

[jetset]

I fear we're starting to veer off-topic here, and imo it's important to stay focused on this major player issue....Purple Lounge, Media Corp and what the new management is doing about the situation players now find themselves in.

It's been a week since the unlamented departure of Justin Drummond and Sara Vincent, yet still no direct player communication from the new CEO or chairman.

These guys have had the entire due diligence process to understand what is happening in this company, and imo it is now appropriate that they issue a firm assurance to players that their balances remain segregated and are safe, and tell players when they will be paid or their funds released for withdrawal.

 

[maxd]

... imo it is now appropriate that they issue a firm assurance to players that their balances remain segregated and are safe ....

I hear what you are saying Brian and I know your heart is in the right place but ...

To me such statements just feel like someone blowing smoke up my arse, 99 times out of 100. It's almost always just corporate double-talk that means pretty much nothing. I encounter this all the time in my work, the PABs. Whenever I corner an "under motivated" casino management person with a list of their f***-ups they almost always say "rest assured that we are doing all that is required to resolve this issue." In my experience that roughly translates into "rest assured that unless you can force the money out of us we're just going to keep sending you these worthless emails in the full expectation that you will piss off and leave us alone". Needless to say I don't.

If I were one of the players with my money stuck in someone else's pocket I'd be demanding a specific and detailed payment schedule not some warm and fuzzy feel-good blah blah from Joe Middle-Manager. And, to be honest, such a statement would hardly be worth much more but if nothing else it would indicate that they're at least trying to pretend that they take the situation seriously. Which obviously they don't.

 

[Mousey]

I do hope players with money trapped in the Purple Lounge void have been pounding the regulator... is it the LGA? ... with polite but firm emails and phone calls regarding their balances and the lack of communication coming from PL.

 

[DiamondGeezer]

These guys have had the entire due diligence process to understand what is happening in this company, and imo it is now appropriate that they issue a firm assurance to players that their balances remain segregated and are safe, and tell players when they will be paid or their funds released for withdrawal.

There can only really be one reason why an online gaming operation gets taken offline by the company and that's lack of working capital. Perhaps they had reached the stage where they were at risk of trading whilst insolvent, a criminal offence I think. Please correct me if I'm wrong but I once read that the idea of balances being segregated is infact not possible due to the rules governing company law. Yes it is possible to physically segregate player funds but the legal position according to what I read is that the owners of the balances are unsecured creditors and if the company was wound up they would be in the queue after the Vat and taxman, the company employee's and so forth. I think it is possible for Austrailian companies to ring fence but the offshore UK one's are not able to do it according to what I read.

If they are a public company it might not be possible under the stock exchange rules for them to make a statement yet if they are negociating the sale of the company to another party. IMO it's highly unlikely the balances are safe for the reason I gave above but if the brand gets sold on the new owner will want to honour the balances and they will be deducted from the price. It was a good brand so I'm sure someone will take it on.

 

[DiamondGeezer]

Just to add to what has already been posted here is a statement from the lawyers who appear to be leading the aquisition. To me it sounds good - Intabet are injecting working capital which will allow PL to re open and the balances repaid.

I don't know the ins and outs of this but maybe they have done the right thing here? Suspending the PL operation has allowed Intabet to do the due dilligence required before they injected fresh capital into Media Corp. Maybe the directors have acted responsibly to a difficult trading situation? It looks very different from Full-Tilt and the lifting of the suspension on the shares is a very good sign. I fully expect PL to open up again in a week or two and everyone will be paid. I doubt the balances were that big anyway in total.

Obviously the lack of communication is very poor and I can't condone that but maybe behind the scenes they are trying to do the right thing?



Michelmores are odds on favourites for gaming acquisition
Exeter lawyer leads legal team on acquisition, equity issue
and change of directors for AIM listed company.

Michelmores Corporate Finance team has advised on AIM Listed Media Corporation plc's latest deal to acquire online odds comparison business Intabet.

The deal sees Media Corp re-listed on AIM with access to further working capital. Former Intabet directors, Adam Fraser-Harris and Phil Jackson have joined the Board of Media Corp as interim CEO and non-executive director respectively, while founder Justin Drummond is one of two directors to leave the business.

Intabet is a new online betting platform providing state-of-the-art odds comparison and allowing customers not only to find the best odds bookmaker, but to execute bets with multiple bookmakers through a single Intabet account.

Exeter based Michelmores partner Richard Cobb has acted for Mediacorp since its inception 12 years ago and has handled a range of deals for the company whilst on the AIM Stock Market, including the acquisition and subsequent sales of gambling.com and casino.co.uk.

Richard led a specialist team of corporate, intellectual property and employment lawyers on the deal, which was completed in Michelmore’s new London offices at 48 Chancery Lane.

Justin Drummond, founder and former CEO of Media Corporation plc commented "Michelmores really helped smooth a complex transaction. Richard Cobb, in particular, has given us fantastic and consistent support during Media Corp’s AIM listing and in a wide range of commercial negotiations for a number of years."

Richard Cobb added: “We were delighted to act in this acquisition which demonstrated Michelmores ability to field a team of specialist lawyers to handle every aspect of a complex deal.”

For more information, please contact [email protected] or 01392 688688.

 

[specialK]

I just received an email. Still nothing...

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[jetset]

For the players' sake I really hope you are right, Diamond Geezer, but I would have prioritised communication with players as soon as the the old management left and I was in control - there's nothing in the rules or governance requirements that stops them at least giving their customers some reassurance on their funds.

Perhaps you would provide a link to your assertion regarding segregated funds - I would like to read that, because it casts doubt on some regulators' claims, for example the Isle of Man, and certainly dilutes the regulator argument that these jurisdictions help protect the player.

I don't think any of us outside Media Corp know how large the amount owing to players is, including yourself... unless you are privy to this information from the new management. The old management certainly revealed very little on any aspect of the company's position regarding Purple Lounge and total player balances afaik.

Regarding the usefulness of corporate commitments to players, I think that really hinges on how honest and professional the management of a company - especially a public company - happens to be. Therefore in the current case, where much player goodwill and corporate reputation has been allowed to erode by the old management, it would be my priority as new management to engage as quickly as possible , assuming my intentions were honourable. These new guys need to look to the future and retaining players, and continuing to ignore them is not the best way to achieve this.

I'm afraid my opinion of the former management of Media Corp and the shocking manner in which this crisis was handled remains unchanged. Their apparent disregard for their customers will be remembered, I'm sure.

Edited to add: For those who believe that this company was operated in a professional manner, perhaps you can gain an alternative perspective by looking through some of the posts and links at posts 146, 195 and 217 in this thread, all of which make interesting reading.

 

[jetset]

I do hope players with money trapped in the Purple Lounge void have been pounding the regulator... is it the LGA? ... with polite but firm emails and phone calls regarding their balances and the lack of communication coming from PL.

Apparently (according to media reports) they did have an LGA licence, which former chairman Justin Drummond (conveniently?) abandoned, although like his expired eCOGRA seal the logo remained on the site.

It's difficult to find out who dumped who, because the LGA simply does not respond to enquiries on the matter...and neither does Drummond or his erstwhile CEO Sara Vincent.

 

[jetset]

LGA RESPONSE ON PURPLE LOUNGE

No assistance from gambling authority

At last the Maltese Lotteries and Gaming Authority (LGA) has responded on the Purple Lounge issue with a brief public statement on its website revealing that Purple Lounge (Malta) Limited requested that the LGA terminate its licenses on April 23, 2012.

The Authority assures readers that it terminated the licenses only after it had confirmed no pending complaints and that the licensee was compliant with its remote gaming regulations.

Offering no solace to players out of pocket, the LGA has washed its hands of the issue saying it cannot address player complaints submitted post-termination of the Purple Lounge (Malta) Limited licenses.

 

[ChopleyIOM]

LGA RESPONSE ON PURPLE LOUNGE

No assistance from gambling authority

At last the Maltese Lotteries and Gaming Authority (LGA) has responded on the Purple Lounge issue with a brief public statement on its website revealing that Purple Lounge (Malta) Limited requested that the LGA terminate its licenses on April 23, 2012.

The Authority assures readers that it terminated the licenses only after it had confirmed no pending complaints and that the licensee was compliant with its remote gaming regulations.

Offering no solace to players out of pocket, the LGA has washed its hands of the issue saying it cannot address player complaints submitted post-termination of the Purple Lounge (Malta) Limited licenses.

Wow, classy!

Those good old Maltese gaming authorities, eh?

 

[Mousey]

LGA RESPONSE ON PURPLE LOUNGE

No assistance from gambling authority

At last the Maltese Lotteries and Gaming Authority (LGA) has responded on the Purple Lounge issue with a brief public statement on its website revealing that Purple Lounge (Malta) Limited requested that the LGA terminate its licenses on April 23, 2012.

The Authority assures readers that it terminated the licenses only after it had confirmed no pending complaints and that the licensee was compliant with its remote gaming regulations.

Offering no solace to players out of pocket, the LGA has washed its hands of the issue saying it cannot address player complaints submitted post-termination of the Purple Lounge (Malta) Limited licenses.

It's so sad.... players being left to stand in the gutter no longer surprises me...

There are players here who had withdrawals prior to April 23 still unpaid. PL casino/website was pretty much a goner PRIOR to April 23....

But everything was just hunky-dory till April 23rd. And whatever happened after April 23... well, by golly the LGA don't know nuttin' about nuttin'.... oh, and if you didn't file a complaint before April 23... you are SOL.

 

[vinylweatherman]

This is a fraud.

PL misinformed the LGA, and made sure that players were lied to prior to the 23rd April in order to prevent there being an unresolved complaint on file with the LGA.

Once PL knew it was about to come unstuck, it simply asked for it's license to be terminated in order that it could breach any LGA requirement it wanted to without any comeback. They also fraudulently represented on their website that they still held a license, even though the site was experiencing "technical problems". This was a further fraud, as they knew full well that this was not the case from the 23rd April onwards.

This shows that the LGA do not regulate at all, as no proper regulator would allow an entity to so easily walk away from an impending implosion. The LGA even have past form, seen in their total failure to protect players when Stryyke went under.

There can be no confidence whatsoever that ANY licensee currently operating with an LGA license will be held to account if they feel like screwing the players to save their own skins. A reopened PL under new management can not be trusted any more than the old if it sticks with the LGA.

Clearly, the UK government did the right thing when they decided this whitelist idea was failing to ensure proper regulation of the industry, and was nothing more than "easy money" for minor jurisdictions prepared to rubber stamp license applications, and more or less trust the operators to police themselves.

This will punish the reputable operators just as much as the rogues, as there is no way to tell the difference, and no amount of assurances of integrity has any value when coming from the owners themselves, or indeed the LGA.

The fact that the LGA kept quiet about this for so long only damns them further, as they must have known what they did was morally wrong, but they kept quiet in order to allow the cover up to last longer, and for PL to distance itself from the mess.

Any new investors will have an uphill struggle rebuilding the brand, if this is even possible. The LGA and the industry as a whole is permanently tainted now, and tinkering with the current system is not going to make much difference. Assurances that players' funds are safe have been proven worthless every time it has mattered. Where players have recovered their money it has had nothing to do with their original funds having been secured, and all to do with a new owner wanting to relaunch the brand afresh, so putting aside their own money to begin the process by making good any lost monies of players passed to them by the old company.

When casino players got their money back after Casino Action went under, it was Casino Rewards that put up the cash, rather than it being recovered from a segregated account. Poker players saw nothing because no deal could be struck.

Full Tilt didn't have the players' funds either, they needed an injection of new capital from a company willing to take over the brand. It has clearly been the same with PL. No money to cover players' balances, even though LGA regulations require this money to be kept separate from company assets. PL simply spent the players' funds, and then handed back their license so that they didn't have to face the music when players began to figure out the money wasn't there.

The next operator to fail will also have no obligation to pay back players. The honest will close whilst they still can, but there is nothing to stop the more dubious from taking a gamble with players' funds, and then "doing a runner" when they find they have lost the gamble, and can neither continue to operate nor close in an orderly manner.

 

[DiamondGeezer]

For the players' sake I really hope you are right, Diamond Geezer, but I would have prioritised communication with players as soon as the the old management left and I was in control - there's nothing in the rules or governance requirements that stops them at least giving their customers some reassurance on their funds.

Perhaps you would provide a link to your assertion regarding segregated funds - I would like to read that, because it casts doubt on some regulators' claims, for example the Isle of Man, and certainly dilutes the regulator argument that these jurisdictions help protect the player.

I don't think any of us outside Media Corp know how large the amount owing to players is, including yourself... unless you are privy to this information from the new management. The old management certainly revealed very little on any aspect of the company's position regarding Purple Lounge and total player balances afaik.

I suspect they can't give players any reassurances yet until the new funding arrives.

Very sorry but I have no idea where I read about the segregated funds and I wish I had that link too. Personally I don't think segregation ever happens in real life. How would you even do it? For it to be genuine you would have to open a seperate bank a/c for each client. If you just had a general client's a/c then that would fall in the company accounts. It would be more of a bookkeeping exercise than genuine segregation. My take on it is the better regulator's demand the licensee's are better funded in the first place, if you have sufficient working capital you won't need to dip into client's funds. Personally I don't see segregation as a big issue and it is a sort of myth really. It's working capital that is the crucial thing. I mean all these delays loading up Neteller and MB are firms juggling their working capital and paying other bills first.

You are right I have no idea about the amount balances but it can't be that much if PL only lost £900K and Instabet are injecting £750K. I mean this deal and the re listing of the shares can only be good news becasue as unsecured creditors the PL players could go to the High Court and petition for a winding up order if the balances weren't repaid. The LGA is a waste of time we all know that but the AIM listing gives creditors a legal route to recovering funds or you could have them wound up. Once the legal stuff is done then players will get paid. The real losers in this won't be the players but the shareholders.

 

[DiamondGeezer]

The next operator to fail will also have no obligation to pay back players. The honest will close whilst they still can, but there is nothing to stop the more dubious from taking a gamble with players' funds, and then "doing a runner" when they find they have lost the gamble, and can neither continue to operate nor close in an orderly manner.

It's always been this way really though. Plenty have failed and will do so again in the future. But I'd rather have it this way than over fussy regulators restricting the industry to just a handful of big players because there would be far less competition for our custom.

Personally I don't see Media Corp as a fraud as such but a company that ran out of cash. Can happen to the best of us!

 

[jetset]

That is your opinion; mine is the opposite, and we must agree to differ.

I would suggest that this affair warrants somewhat more than an offhand "they just ran out of cash," because it appears from media reports, directorate resignations, business results, shareholder outrage and simply the manner in which this affair has been (mis)handled that the manner in which Media Corp was run leaves much to be desired.

Hopefully the new owners can turn that around, and a good start would be to engage immediately with the players.

Broking firms have been using the segregated accounts practice for decades to ensure that shareholder deposits are protected in the event of failure, and the practice, approved by financial regulators internationally and practical if basic rules are adhered to, is well developed and can be, and is in some jurisdictions, applied in the industry.

 

[specialK]

LGA RESPONSE ON PURPLE LOUNGE

No assistance from gambling authority

At last the Maltese Lotteries and Gaming Authority (LGA) has responded on the Purple Lounge issue with a brief public statement on its website revealing that Purple Lounge (Malta) Limited requested that the LGA terminate its licenses on April 23, 2012.

The Authority assures readers that it terminated the licenses only after it had confirmed no pending complaints and that the licensee was compliant with its remote gaming regulations.

Offering no solace to players out of pocket, the LGA has washed its hands of the issue saying it cannot address player complaints submitted post-termination of the Purple Lounge (Malta) Limited licenses.

They are saying true probably. Player who sent them complaints, he receieved his money.

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[jetset]

Glad they were paid, but note how long it took, and one has to ask how many players actually complained to the LGA?

Short answer - we don't know. The LGA doesn't communicate.

The players on your links do not say whether the LGA actually contacted them to tell them that their complaints had been settled as legitimate - judging by the posts the money appeared to have just arrived.

Perhaps that indicates that those players who complained were paid - presumably so that the LGA could claim that there were no unpaid complainants as far as it was concerned.

But how many unpaid players have not complained, and is it now too late for them to do so?

It would be interesting to know whether the LGA had the professionalism and courtesy to write to each complainant confirming that his/her complaint was legitimate and that it had ruled that he/she was to be paid.

 

[Nifty29]

LGA = Lazy Greedy A**holes

 

[DiamondGeezer]

That is your opinion; mine is the opposite, and we must agree to differ.

I would suggest that this affair warrants somewhat more than an offhand "they just ran out of cash," because it appears from media reports, directorate resignations, business results, shareholder outrage and simply the manner in which this affair has been (mis)handled that the manner in which Media Corp was run leaves much to be desired.

Hopefully the new owners can turn that around, and a good start would be to engage immediately with the players.

Broking firms have been using the segregated accounts practice for decades to ensure that shareholder deposits are protected in the event of failure, and the practice, approved by financial regulators internationally and practical if basic rules are adhered to, is well developed and can be, and is in some jurisdictions, applied in the industry.

That's fine - it's all about opinion's at the end of the day .

You are of course right about it not being a good situation but until the facts come out it's hard to know what has happened at Media Corp. The info on that shares forum is hardly likely to be the full picture since so many there will have an agenda. It's a complex situation since Media Corp seem to have other interests also. I know how bad it all looks but they must be the most desperate of all of us to get PL up and runing again. Have they lost their MG license and will they need to relaunch with new software? If so that will take a bit of time to sort out.

It is odd that they don't just admit what everybody knows and tell the players what is going on. But to focus on the player balances - even if the new working capital is not enough surely they could do a trade sale. It is a good brand and the player base must be quite decent. The elephant in the room will be the size of the player balances. Is there any news from the poker forums about the size of the balances? But I can't see how the shares could possible be unsuspended if there was any problem with the balances. Also if shareholders suspected that then the shares would crash.

 

[specialK]

Glad they were paid, but note how long it took, and one has to ask how many players actually complained to the LGA?

Short answer - we don't know. The LGA doesn't communicate.

The players on your links do not say whether the LGA actually contacted them to tell them that their complaints had been settled as legitimate - judging by the posts the money appeared to have just arrived.

Perhaps that indicates that those players who complained were paid - presumably so that the LGA could claim that there were no unpaid complainants as far as it was concerned.

But how many unpaid players have not complained, and is it now too late for them to do so?

It would be interesting to know whether the LGA had the professionalism and courtesy to write to each complainant confirming that his/her complaint was legitimate and that it had ruled that he/she was to be paid.

Actually it was only one player who wrote about it. I am angry with myself, because I noticed that he sent complaint and was paid. I intented to send it too, even start writing it, but I never send it.

 

[Jasminebed]

Player funds segregation

Very sorry but I have no idea where I read about the segregated funds and I wish I had that link too. Personally I don't think segregation ever happens in real life. How would you even do it? For it to be genuine you would have to open a seperate bank a/c for each client. If you just had a general client's a/c then that would fall in the company accounts. It would be more of a bookkeeping exercise than genuine segregation.

True segregation of player funds could happen if the regulators required it. The Law Society of Upper Canada (Ontario, Canada) requires that client funds be placed in a separate trust fund... all the clients' funds are deposited in the same account, with bookkeeping keeping track of what client has what funds in trust.

If a firm goes belly up, the landlord, employees and other creditors cannot access those funds.

This doesn't mean that no lawyer ever steals from their clients, but it does mean an annual inspection of this trust account, and legal and possibly criminal sanctions if they don't comply with the regulations.

 

[GrandMaster]

There are similar requirements for solicitors in the UK as well. Clients' money is separate from the firm's own money. I don't quite see how this system is meant to work for casinos, since players' balances change continuously.

 

[Nifty29]

There are similar requirements for solicitors in the UK as well. Clients' money is separate from the firm's own money. I don't quite see how this system is meant to work for casinos, since players' balances change continuously.

IIRC, when an operator signs with Microgaming, they have to provide a certain amount upfront as a 'reserve' to cover player payments if they do a runner.

Maybe that is a seperate matter, but it amount to pretty much the same thing. I recall a figure of around $600k from somewhere but I'm not sure. It could perhaps be based on some kind of average over MGS casinos in terms of the amount required.

 

[whatever]

IIRC, when an operator signs with Microgaming, they have to provide a certain amount upfront as a 'reserve' to cover player payments if they do a runner.

This has been proven a myth many times.

Meanwhile, at Mediacorp the new management is just as unresponsive as the old one.

 

[Simmo!]

IIRC, when an operator signs with Microgaming, they have to provide a certain amount upfront as a 'reserve' to cover player payments if they do a runner.

Wasn't that exactly why Casino Action when tits-up? The original owners sold and the "new" owners dipped into the reserve pot, MG revoked their licence and they were forced to close and sell up if I remember rightly.

Is it possible that the MDC owners used some of the reserves, MG revoked PL's licence thus forcing PL to contact the LGA etc?