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US versus the Three Poker Rooms

Discussion in 'Casino Industry Discussion' started by onlineprime08, May 3, 2011.

    May 3, 2011
  1. onlineprime08

    onlineprime08 Dormant account

    Occupation:
    plumber
    Location:
    USA
    We all know what happened just a few weeks/days ago, when US federal government made indictments against the three poker rooms, PokerStars, FullTilt and Absolute Poker.

    After a few days, PokerStars have decide to make a separate domain in Europe so that it won't be affected by the closure of its domains in the US. They have also agreed to give back the US players money that has not yet been withdrawn from their accounts.

    But Absolute Poker refuses what the US wanted, instead, they have said that what the US government did was illegal. They have found support with Antigua and Barbuda, well-known licensee of online gambling websites.

    In you opinion, do you think Absolute Poker did the right thing?
     
  2. May 3, 2011
  3. vinylweatherman

    vinylweatherman You type well loads CAG MM

    Occupation:
    STILL At Leisure
    Location:
    United Kingdom
    They stood up to the bully, so in a sense did the right thing. It is possible that the DoJ have made secret demands in return for permitting the return of US players' money, and any operator that refuses will be publicly castigated for refusing to return the money belonging to US players when they were told they could.

    I recall earlier incidents where the DoJ demanded that processors turn over all their records pertaining to US customers in return for an "easy ride" when it comes to making an orderly exit from the US. Neteller also had to sign an undertaking to stay out of the US market altogether.

    I suspect that the "deal" offered is that the DoJ gets to keep the seized funds, the poker room has to turn over some of it's records, and sign an undertaking not to try to sneak back into the US market. They will then be allowed to refund US players from the proceeds of their worldwide operation.

    When it comes to the mudslinging, maybe the US authorities (or their mouthpieces) will be the ones to sling the first damp sod regarding the decision NOT to immediately start giving US players back their money.

    This is of course blackmail, or "business as usual" for the DoJ when it comes to their war on offshore operators.

    Perhaps if Bin Laden had operated an online sportsbook, casino, and pokerroom, there would have been far more energy put into his eradication, and it would have taken place in 2006, not 2011:rolleyes:

    As pointed out elsewhere, the DoJ didn't shut down Wikileaks by shutting down it's domains without notice, and several terrorist friendly webdomains still operate, and are able to freely spread propaganda for their cause through the internet with little sign of the US security services acting to directly shut them down.

    Either terrorism is less important than offshore gambling, or gambling operators made a huge mistake in how they set up their domain structure, and left themselves exposed to a simple procedure to shut them down, such as using an AMERICAN based registrar to start with, and never thinking ahead enough to suspect that the DoJ will spot this weakness, and go after it.
     
  4. May 3, 2011
  5. Rhyzz

    Rhyzz Experienced Member

    Occupation:
    Online Gaming
    Location:
    United Kingdom
    I'm interested to see what Alderney thinks about Full Tilt operating in the States considering it's against their policies..
     
  6. May 3, 2011
  7. pokeraddict

    pokeraddict Webmaster

    Occupation:
    Pro Poker Player
    Location:
    Las Vegas
    IMO the reason AP/UB has still operated in the U.S. after the indictments is simply that they are broke. They posted notice US players could not play but never prevented them. My guess is their software cannot ban by country and/or AP/UB know they cannot cover the balances and need to rake the US player balances away.

    When they had their accounts seized the ponzi scheme was discovered. They cannot negotiate their way out because one of the terms is to pay back their US players, something I do not think they can do even if they get their bank accounts back.

    That is just a guess but it cannot be that far off.
     
    1 person likes this.
  8. May 3, 2011
  9. jetset

    jetset Ueber Meister CAG

    Occupation:
    Senior Partner, InfoPowa News Service
    Location:
    Earth
    From Casinomeister News two weeks back:

    Meanwhile, the Alderney Gambling Control Commission, where Full Tilt Poker is licensed, joined the Kahnawake Gaming Commission and the Isle of Man licensing authorities in issuing a statement on the US debacle.

    The Commission's statement comments:

    "[The] AGCC notes that its licensee, trading as Full Tilt Poker, denies all of the allegations [contained in the US federal indictments unsealed last Friday].

    "Upon the grant of its licence Full Tilt Poker identified that it had obtained specific legal advice relating to its proposed activities. AGCC further notes the current public statements made by Full Tilt Poker to its customers and its recent decision to suspend “real money” play in the USA.

    "AGCC is concerned that appropriation of Full Tilt Poker’s dotcom site is hampering and potentially adversely affecting its lawful operation elsewhere in the world."
     
    2 people like this.
  10. May 3, 2011
  11. Rhyzz

    Rhyzz Experienced Member

    Occupation:
    Online Gaming
    Location:
    United Kingdom
    Seems Alderney were happy with the legal advice given to FTP then if they knew of their intentions before granting the license
     
  12. May 3, 2011
  13. 3mptyseat

    3mptyseat Quit Gambling PABnonaccred

    Occupation:
    Pressing Buttons
    Location:
    California de Norte
    I concur... They are on their third ownership group since the 2007 superuser scandal, and one thing remains crystal clear to me: Different Umbrella, Same old Crooks trying to stay dry...
     
  14. May 3, 2011
  15. lots0

    lots0 Banned User - troll posts - flaming PABnonaccred

    Occupation:
    I do nothing productive
    Location:
    Hell on Earth
    Crooks is crooks...

    The folks behind AP/UB have always been the same people, no matter who held the title "Owner" and they have always been ethically challenged.
    If I was associated with AP/UB, especially as an investor, I would be looking over my shoulder for the guys with badges. :eek2:



    Full Tilt... Interesting turn of events.
    But the simple fact is that the US ignores the international rules that it does not like... Anyone remember the WTO gambling complaints after the UGIEA? and what happened to the WTO complaints... nothing.

    I have a very strong feeling that IOM, Alderney, Kahnawake and any other similar complaints, will simply be ignored by the US.
     
  16. May 3, 2011
  17. Diane

    Diane Ueber Meister PABnoaccred

    Occupation:
    Consultant - HR
    Location:
    WI
    KUDOS to Pokerstars for processing withdrawals to their US players

    I had the huge sum of $13.00 in my Pokerstars account, but got it paid within 2 days of request late last week.

    I don't have funds owed at the other sites, but am wondering if the other site Full Tilt and UB, AP etc have paid their players yet?

    Diane
     
  18. May 3, 2011
  19. lottethedog

    lottethedog Newbie member

    Occupation:
    Inbetween
    Location:
    Europe
    Yes I bet that bit them in the ass!

    They knew all along, they gave them the license!
     
  20. May 5, 2011
  21. pokeraddict

    pokeraddict Webmaster

    Occupation:
    Pro Poker Player
    Location:
    Las Vegas
    I got my PokerStars money in 3 business days, it was a bit more than $13.

    As for AP/UB they have not paid US players anything. In fact it appears they are bankrupt as they laid off their entire staff and vacated their offices in Costa Rica. Some non US players received $250 but for the most part there is no cash left.

    Full Tilt has paid some non US players but they still have not paid any US players. They first said an announcement would be this week but that got bumped to next week.
     
    1 person likes this.
  22. May 5, 2011
  23. PlexRep

    PlexRep Dormant account

    Occupation:
    Marketing
    Location:
    Malta
    Absolute Bankruptcy or not?

    I cant tell if it's bankrupcy or not. First I read this a couple of days ago:

    Earlier today the parent company, Blanca Gaming, of the Cereus Network which owns Absolute Poker and UB sent out and email to their shareholders letting them know that they will most likely be filing for bankruptcy. Absolute Poker and UB ran their operations from a four story building in Costa Rica that as of this moment is closed and empty. Everything was removed and 95% of their workforce was let go.

    Then I saw an update:
    Absolute Poker and UB have ceased all US operations and will focus on non US players. A company spokesperson said: “We regret that we have been compelled to take these actions. We have worked tirelessly to create a truly amazing company that is filled with extraordinary people. We have always been and still remain fully committed to our employees and players. At the same time, we are confident that this restructuring will strengthen the company and its future.”

    So whats exactly happening. Is it bankruptcy or just 'pulling out' of America?
     
  24. May 5, 2011
  25. vinylweatherman

    vinylweatherman You type well loads CAG MM

    Occupation:
    STILL At Leisure
    Location:
    United Kingdom
    I suspect the former, and the latter is to buy them time.

    The problem is that they have stopped paying EVERYONE, not just the US players. Limiting payments to $250 per week, and then stopping even this after just one week, is hardly "focussing on the non-US player".

    They have also cleared their offices, removed all the equipment, and shed 95% of the workers. Just WHO is left to look after the non-US operations?

    If they feel they can effectively run non-US operations with 5% of the original workforce, and the loss of their main office & equipment, they clearly had such MASSIVE exposure to the US market that the seizure must have virtually finished them off.

    There are also questions about the "firewall" structure, and what the original investors were up to. Maybe they were taking loads of money out of the company, and based the assumption that the company could suffer this on the US market. Maybe the seizure and loss of further US deposits has left them with no money with which to dig themselves out of the hole, and they are clearly considering bankruptcy, and have thus warned their shareholders. For more general public consumption, they have released the statement about them focussing on non-US markets, and the resultant strengthening of the company.

    I bet they are living on hope, don't scare away the non-US players in the hope that income from them will be enough, and fast enough, to dig themselves out of this hole they are in. They have no interest in making things worse by using what little liquidity they have left to pay the US players, who are not going to provide them with any further revenue. They can use the legal situation to buy time, and argue that it is external matters (the DoJ) that are holding up the swift return of US players' funds.

    If they don't quickly restore normal levels of payments to non-US players, it is because they CANT.
     
  26. May 5, 2011
  27. Rhyzz

    Rhyzz Experienced Member

    Occupation:
    Online Gaming
    Location:
    United Kingdom
    Sounds like funds weren't ring fenced which again, is a stipulation of the better licensing jurisdictions. It's things like this that continue to destroy the image of online gaming and makes people wonder what is the point in licensing if it's not going to protect people's funds
     
    1 person likes this.
  28. May 6, 2011
  29. pokeraddict

    pokeraddict Webmaster

    Occupation:
    Pro Poker Player
    Location:
    Las Vegas
    Cereus today denied the bankruptcy rumors but there are some obvious issues:

    1. They defaulted on their loan with Exscapa which is why they created UB.com and Blanca Games

    2. They have told the Madeira Fjord debt holders they will not be getting paid anything ever again

    3. They laid off virtually their entire workforce

    4. They seem to have cleaned out their offices

    5. They still have not settled with DOJ. People with inside info say that is because the DOJ wants more money (the example I saw was $500 million) than Cereus has

    6. U.S. players have not seen a dime but are still allowed to play

    7. Non U.S. players were held to a $250 max cashout request. Some received it in a few days, others have been waiting 2 weeks for it. Even after (if) they receive the $250 they have to wait 7 days to make the next request.

    8. They announced today non U.S. player cashouts would go up to $500 ($1000 for those few that can cashout by Visa) but yet countless players still have not received their first $250. I don't think anyone has reported getting paid in May at all and nobody seems to have received a 2nd cashout. Maybe they have but it has not hit the forums.

    9. It appears they were suppose to hold back $2.5 million+ to cover the layoff packages to Costa Rican employees. Internal memos lead one to believe they failed to do so.

    10. They had not paid affiliates dating back to before Black Friday showing there were already cash issues before the busts.

    Even though they deny going bankrupt they have defaulted on two major loans and can't pay cashouts and it appears employees either. They certainly do not look like a financially healthy company.
     
  30. May 6, 2011
  31. vinylweatherman

    vinylweatherman You type well loads CAG MM

    Occupation:
    STILL At Leisure
    Location:
    United Kingdom
    If they have defaulted on major loans, they may not have a choice, because the debtholders could apply to have them wound up.

    Maybe the bankruptcy notice was a ploy to force the DoJ's hand in the hope that the DoJ would accept less rather than face being held responsible for US players not getting their money back.
    If they can't even pay their employees, they could face being thrown out of Costa Rica, which would be VERY bad for any shred of reputation they manage to salvage.

    They have probably relocated to Panama on the quiet, and WILL bail on their obligations in Costa Rica for now, only settling up if they have to.

    If they want to avoid certain bankruptcy, they will have to start "business as usual" for non-US players, who currently fear their money isn't safe. There is no point playing poker if you can never withdraw your money, so I expect non-US players are withdrawing all the can, and switching to a different network.

    For those that DO still play, they will steadily move money away from US players who cannot be paid, to non-US players who expect to be paid. The rake generated is unlikely to cover money won from US players by non-US players.
     
  32. May 7, 2011
  33. jetset

    jetset Ueber Meister CAG

    Occupation:
    Senior Partner, InfoPowa News Service
    Location:
    Earth
    A LIVELY FRIDAY FOR ONLINE POKER FIRMS IN COSTA RICA

    But what was the local equivalent of the FBI looking for?

    The newswires and online media sites were buzzing late Friday with the news that the offices of online poker companies in Costa Rica had been visited by the local equivalent of the FBI, the Organismo de Investigaciones Judiciale.

    Pokerstars, Absolute Poker and UBPoker offices were all named in the reports.

    The fact that the various premises visited were all associated in some way with companies named in the Black Friday indictments encouraged speculation that the two enforcement actions were in some way connected, but several sources suggested that securing the monies due to axed employees was the more likely motivation in the case of Absolute Poker and UBPoker.

    In the BetonSports case some years ago, for example, similar reasoning was applied (see previous InfoPowa reports).

    Absolute Poker and UBPoker have already announced that their Costa Rica operations are being drastically downsized, with 80 percent of a staff complement of 300 being laid off.

    Other reports speculated that the OIJ teams were looking for individuals named in the US federal indictments, and yet others surmised that the 'reviews' were being used as an excuse to access company information for passing on to the US authorities.

    Whatever the reason, OIJ teams suddenly appeared at the offices around midday local time, with subsequent television coverage from Channel 7 showing them in one case battering down a door to gain entry, and 'visiting' a company called Innovative Data Solutions (IDS), believed to be associated with Absolute Poker.

    Although Pokerstars is headquartered on the Isle of Man, the company reportedly has a large presence in Costa Rica, employing some two hundred or more people.

    Pokerstars' Isle of Man offices subsequently released a statement late Friday night GMT confirming that its Costa Rica operations had been visited by enforcement agents, and the company had cooperated in this "review of operations,” emphasising that its business operations were continuing.

    The statement revealed that the OIJ had sent staff home, but that they would be able to return "in a few hours". A Pokerstars spokesman subsequently posted on the twoplustwo message board that the agents had left, and that employees were back at work.

    The raids apparently involved six premises in all, some of them private residences, according to Costa Rica media sources, which noted that disgruntled employees impacted by the Absolute Poker and UBPoker lay-offs had complained to local employment authorities, alleging severance irregularities.

    Local media outlet Teletica claimed that enforcement teams had visited the homes of persons associated with allegedly senior managers of IDS, including Scott Tom and Brent Beckley, both of whom are named in the US federal indictments. It is not known what the results of those visits were.

    The enforcement actions triggered a slew of related message board rumour and speculation, with various posters claiming that FBI agents had been 'undercover' on the raids; that valuable computer and other records had been seized; that AP/UB has $16 million in available funds but will favour non-US rather than US players in any refunds; that the police raid on the Pokerstars offices had been made in error; and that Blanca Games has rebuffed an approach by investors seeking to buy the non-US Cereus Network business.

    None of these reports was supported by corroborative evidence.
     
    3 people like this.
  34. May 7, 2011
  35. rainmaker

    rainmaker I'm not a penguin CAG webmeister

    Occupation:
    -
    Location:
    -
    The biggest financial newspaper in Norway have a case about Absolute Poker on their front page today. The article is quite large, and only available in paper print. But another newspaper presents a smaller summary. The summary is in Norwegian, but I translated with Google Translate. Google Translate are not very good, but you will probably understand it :)


    Article

    (Dagbladet) -The Norwegian holding company Madeira Fjord has quietly been operated one of the world's largest poker network - Absolute Poker- and are now being investigated by the FBI, Dagens Næringsliv (DN).

    The newspaper should have been given access to internal documents and investigation material after several poker sites - Absolute Poker, among them - were closed by the FBI on charges of gambling activities and extensive money laundering.

    Complex networks
    The Norwegian holding company should have had control of the Absolute Poker through a complicated network of holding companies and subsidiaries in different countries, according to DN.

    Large sums of money have been hidden from Norwegian government and U.S. investigators.

    The holding company was created in 2007 by lawyer Lars Jorstad Francke with Grette colleague Jacob Sverdrup Bjønnes-Jacobsen, both of which are listed as directors of the company.

    Tax haven
    Before the company was established in 2007, according to DN, it was added an advanced plan for how Norway should be used as a tax haven for U.S. companies. U.S. tax experts and lawyers Grettir should have assisted in these plans.

    But auditors and several of its shareholders have suspicions that something was wrong, and the Oslo District Court received in March this year a review petition.

    Now working according to the newspaper attorney Bjorn Blix in the law firm Bull & Co. with a plan - code-named "Out of Dodge" - to move operations from Norway without the IRS starts asking questions about the real values ​​- valued at 250 million dollars.

    - The statements suggest that I and the Bull & Co. have contributed to the unlawful conduct, and is very harmful for my and Bull & Co's reputation. The statements are untrue, the DN is made ​​aware on several occasions. I mean we always have related to Norwegian law, good legal practice, and the Bar Association and its own policies, answer Bjorn Blix in Bull & Co. to the newspaper's disclosure.
     
    1 person likes this.
  36. May 7, 2011
  37. jetset

    jetset Ueber Meister CAG

    Occupation:
    Senior Partner, InfoPowa News Service
    Location:
    Earth
    There's clearly a difference between legitimately minimising a company's tax liabilities through legal international tax strategies, and criminal tax evasion, and I think that is what the authorities will be examining here.

    This sounds as if whoever really owns AB and UBP used the legal services and advice of tax lawyers and accountants in setting up Madeira Fjord, so the question is whether that advice will now stand the test of investigation...or whether the owners misled their professional advisors regarding matters of material fact, imo.

    The third possibility is that the advisors are in on the illegal activity, if that is what it is.

    But much of this seems to confirm the general content in that interesting article on Madeira Fjord that pokeraddict directed us to earlier.

    I have to say that the "code" Out of Dodge is not very imaginative or effective LOL!
     
    1 person likes this.
  38. May 7, 2011
  39. jetset

    jetset Ueber Meister CAG

    Occupation:
    Senior Partner, InfoPowa News Service
    Location:
    Earth
    Latest statement from Blanca Games out today deals with the Costa Rica raids and the allegedly nefarious doings of the IDS chief:

    You must register/login in order to see the link.
     

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