Interesting rumor – Binion to buy in to Full Tilt? [Update: FT loses gaming license]

[2Tone]

Casino executive Jack Binion is in advanced talks with Full Tilt Poker about purchasing a significant stake in the poker site, according to blog site Subject: Poker. Referencing “multiple independent sources”, Binion was apparently in Ireland last week meeting with Full Tilt executives regarding a potential investment in the site, which eGaming Review revealed last month had been seeking up to US$150m from potential investors outside of the financial services sector in order to return funds to US players. Full Tilt has declined to comment to eGR on this potential development at this time.

[Robbie Robb]

Doubt he'll be buying into it now....They lost their license and have been ordered to shut down. They've currently ceased operations on a global level.

[jdiana86]

Don't really find that interesting, JMHO

[Talking Poker]

Yeah, this latest news is unsettling to say the least. I don't even know if this is a good thing or a bad thing (the shutdown, I mean), but it sure doesn't seem good.

Then again, maybe it forces FT's hand... maybe Binion gets a reduced price and bails them out. Maybe all they money they have (globally) is pooled and everyone is paid out on some sort of percentage basis, depending how far short they are.

I wish I had been smart enough to keep less money on there before Black Friday. *sigh*

[sjay2k]

This is amazingly terrible news.

As a recap, Full Tilt now:
* Is under indictment from the US government
* Holds insufficient funds to meet player balances
* Is being sued by its spokesman, probably others
* Has lost its licence
* Is currently offline, losing money by the hour

I think the business is now dead, if it already wasn't.

FTP's equity owners were paid distributions of profit on a monthly basis. Now I am curious if these distributions continued when FTP started experiencing problems receiving deposits from players in the months prior Black Friday, when their financial black hole developed.

If so, the owners were essentially stealing the players' money (rather than withdrawing profits). Legally it would probably be fraud and/or breach of a constructive trust.

What is also pretty sick is that I know the owners of FTP anticipated legal action from the US government, and the owners will be very difficult to pursue. One of the equity owners joked to me that he/she spent all their time plotting his/her escape from the U.S. for when the government came after FTP.

I foresee a messy class action against the individual owners of FTP.

[jdiana86]

Wow I'm a douchebag

[sjay2k]

Subsequent to my post above, the LA Times reported that FTP will be bought out by an unnamed Euro investor.

It sounds like good news, but no deal has been finalised and I'm still not convinced.

Based on the accounts and estimates I've read, it appears that FTP will need an investment of 200 - 400M to continue operating.

Now, put yourself in the shoes of one of the handful of investors who actually has that sort of capital. Why take on FTP's baggage? It's hard to know if FTP can even operate at a profit after losing its American customers and oodles of goodwill (a large percentage of their players will simply withdraw and never come back).

What seems more realistic is that FTP sells their assets (software, patents, physical equiment, databases, etc) and that money is put towards repaying the players. Maybe Ivey convinces the equity owners to all chip in to re-pay the remainder.

I'm not sure how reliable Tony G is as a source, but his tweets today are consistent with my read that this is a trainwreck and everything to date has been in desperation:

TonyGuoga Tony G
@ScottMatusow I dont think you get the drift. I been talking with Howard and I can see where this is going. I want him to sort this out.

TonyGuoga Tony G
The authorities and poker community should not allow the gang powered by Ray and Howard to get away with this fraud.

TonyGuoga Tony G
Facts within has it that FTP is about to roll over this week, Irish lawyers now involved demanding Pocket Kings pay up or declare bankruptcy

TonyGuoga Tony G
The deal on the table is to sell what they can and let the rest go busto. Somebody will pick this up and Howard will be a new part owner.

[sjay2k]

I was reading through the DOJ's .

On pages 41 - 45 the DOJ lists all the deposits and withdrawals made to and from FTP. Everything looks normal up until the deposit dated 14 January 2011. The DOJ made dozens of deposits after this date, and none of them were actually taken from their bank account.

The DOJ made a number of withdrawals after this date-- all of which were successfully processed.

It is unclear at what point FTP stopped receiving bank transfers, as the most recent successful deposit made by the DOJ was on 15 November 2010.

Therefore, for a period of 3 - 5 months, FTP was crediting American accounts with money that they never received. I mean... WTF was going on?