Tuesday, May 31, 2011

Full Tilt Poker “Raising Capital,” Players Raising Hell

Full Tilt Poker Raising CapitalYesterday the mysterious “FTPDoug” once again passed along a missive from the higher-ups at Full Tilt Poker. Don’t ask me who FTPDoug really is. I’ve heard his name isn’t really Doug -- that he’s actually the new guy who has replaced the old guy who was named Doug.

Hell, don’t ask me who the higher-ups are, either. Not that it matters, I suppose.

Kind of symbolic, really, of the less-than-direct communication the embattled online poker site has had with its players ever since “Black Friday.” Rather than get a direct email from Full Tilt Poker, we get a post published to a poker forum in which an anonymous messenger delivers an unsigned note without any other explanation than “Here is a brief official update.”

The last message passed along by FTPDoug came on May 15th. That’s when we were told Full Tilt Poker was continuing to work “tirelessly” to address the “numerous hurdles and challenges” that were preventing the site from allowing its American customers to cash out. There was nothing more specific about when or how the cashing out was going to commence, however. Rather, we were told that FTP would “update our US players when we have more specific information to provide.”

The May 30th message did contain more specific information, though none of it concerned the procedure by which Americans were going to see our funds. (Incidentally, I am one of those U.S. players still looking to cash out the few hundy I have stuck on the site.) “We still do not have a specific timeframe for this,” says the note. Rather, we are here told that not only does Full Tilt Poker not have the funds available to allow U.S. players to cash out, but it is still an open question when -- or even if -- they will.

In response to questions about Full Tilt Poker being/going bankrupt, that is denied. “FTP’s worldwide business is healthy,” says the note, kind of glossing over the fact that the latest traffic report from PokerScout says the site experienced a 7% drop in activity last week, marking the fourth straight week it has declined.

News over the last week about accounts belonging to Full Tilt Poker having apparently been unfrozen is not addressed in this note. (EDIT [added 7 p.m.]: Apparently those reports of FTP accounts being unfrozen were without basis; see Subject: Poker.) Rather, we learn that Full Tilt Poker is currently “raising capital to ensure that the US players are paid out in full as quickly as possible.”

We kind of knew the site likely faced some sort of liquidity crisis, but it’s still unsettling to see this confirmed. I mean, we all understood to some extent there was risk involved when depositing funds onto any online poker site. But I don’t think any of us who deposited at Full Tilt Poker ever thought that when it came time to withdraw we’d have to wait for FTP to raise the money first.

We have known for some time that unlike PokerStars, Full Tilt Poker did not keep its players’ funds in segregated accounts, instead variously using that money for operation-related expenditures. No one knows for certain how that money was used, but one assumes it helped fund the site’s massive advertising budget (including the sponsoring of shows like “Poker After Dark”). The money might’ve also been used to help pay sponsored pros, including the members of Team Full Tilt at least a few of whom are thought by many to own pieces of the company as well.

All of which means that among those “hurdles and challenges” FTP faces we can list (1) the failure to segregate player funds; (2) the inaccessibility of seized accounts; and (3) the significant percentage (approximately 50%) of American players the site served prior to April 15th. The first two items mean less cash on hand, and the third means less is coming in. Other accounting missteps (e.g., allowing players to deposit and play with funds without having finalized the transfers, some of which were never realized) appear as though they are further contributing to the effed-up nature of things at the moment.

There are likely other “hurdles and challenges” of the legal variety of which we aren’t fully aware. Such is suggested by the statement’s concluding point that the Full Tilt pros have mostly been keeping mum because “they are constrained by the pending legal actions.” That’s understandable.

Team Full TiltBut today the World Series of Poker begins. Many American players who had hoped to participate in the Series this summer won’t be able to do so because of the fact that they cannot access their funds from Full Tilt Poker. Meanwhile, those Full Tilt pros -- particularly those 14 members of Team Full Tilt -- will all likely be buying into events and playing full schedules as usual.

Sort of thing will raise eyebrows, for sure, and perhaps legitimate complaints that in an indirect fashion some of these pros -- who encouraged a lot of players to deposit in order to “learn, chat, and play” with them -- are unfairly benefiting from the very company that has put so many of its customers in such dire straits.

I’m not saying the Team Full Tilters shouldn’t be playing. But I do understand the position that finds something unseemly about these guys high-rolling their way through another Series while so many of the site’s customers are stuck on the other side of the rail.

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Blogger Conan776 said...

That part about needing to raise funds sounds just so much like what someone running a pyramid scheme would say.

5/31/2011 2:40 PM  
Blogger Bill said...

You probably heard the FTPDoug name thing from me. FTPDoug's name is not Doug. But I wrongly stated that the original FTPDoug had left the company a long time ago. I was later informed that there was some miscommunication. I asked a friend of mine who had posted something on 2+2 and he said it was him. It was. But he had sort of "guest posted" those posts I was asking about. FTPDoug had been and still continues to be someone else.

6/01/2011 11:16 AM  

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