Over the last few days, rumblings could be heard in the online poker community that Full Tilt Poker was going to make some sort of announcement on May 30th. People’s hopes were raised, thinking that this may mean that Full Tilt was ready to start sending payments out to U.S. customers, who have had their bankrolls locked up in their Full Tilt accounts since Black Friday, which was a month and a half ago. As it turned out, an announcement was made on Monday, but to the dismay of most, it was more of the same.
In an update posted on poker message boards such as Two Plus Two and PocketFives.com, Full Tilt representative “Doug” wrote in response to the big question as to when U.S. players will be paid, “We still do not have a specific timeframe for this. There has been, and remains, no bigger priority than getting US players paid as soon as possible, and we have been working around the clock to get this done.”
The reassurance that the issue is the highest priority comes as little solace to the vast majority of those waiting for their money, as this has been the company line since the whole mess started on April 15th. Adding to the frustration is the fact that PokerStars started processing withdrawals within two weeks of Black Friday and withdrawals that were made via electronic funds transfer were completed, with the money in players’ bank accounts, within 72 hours in most cases.
Full Tilt is fully aware, however, that it has not handled the situation very well. Doug’s official update started with the following:
“We acknowledge that our lack of communication reflects poorly on us, and rightfully so. We have been too optimistic in estimating how long it would take to sort through the issues we have faced since Black Friday. And as frustrating as the delays have been for us, we recognize that it cannot compare to the frustration you have been feeling.
We further recognize that our lack of communication has led to much speculation and many unsubstantiated rumors, which have often been contradictory. With this message, we hope to clear up as much confusion as we can, while at the same time keeping in mind the constraints imposed on us as a result of the cases brought in the Southern District of New York.”
Full Tilt also stated that in attempting to “speed up” payments, it is “raising capital to ensure that the US players are paid out in full as quickly as possible.”
Last week, eGaming Review reported that representatives of Full Tilt co-founder Ray Bitar, one of the men named in the Black Friday indictment, are looking for investors outside of the financial services sector to inject the company with as much as $150 million so that it can repay its customers. One Bank of Ireland account belonging to Full Tilt and Bitar was unfrozen by the U.S. Department of Justice last week, reportedly freeing up more than a third of the money owed to U.S. customers, but that money has not been distributed yet. In all, U.S. players are waiting for somewhere between $100 million and $150 million.
Part of the problem seems to be the timing of the indictments and bank account seizures. At the time of the seizures, Full Tilt was scrambling to to find a payment processor to process transactions between the poker room and U.S. customers’ bank accounts. The company actually had a $60 million shortfall because it had credited players’ Full Tilt Poker accounts with funds that had not actually been transferred yet from the players’ bank accounts to Full Tilt Poker. Crediting accounts with deposit requests before the funds are actually moved isn’t unusual, as the funds are typically debited in short order. In the case of this $60 million, however, payment processor issues resulted in the shortfall lasting longer than expected. Even so, it shouldn’t have been a big issue, but then the indictments were handed down and bank accounts were seized. According to eGaming Review, that resulted in a perfect storm of epic proportions: the bank accounts were seized before Full Tilt even knew about it, so now there was both a shortfall of customer deposits plus seized bank accounts, resulting in Full Tilt staring at over $100 million in funds owed to customers.
Additionally, even accounts that weren’t touched by the Department of Justice have been inaccessible because the banks got scared and voluntarily shut down.
In the past, when there has been payment processor issues or frozen accounts, Full Tilt has pulled money from its own coffers to pay customers while the issues were resolved. In this case, it hasn’t even been able to do that, since its bank accounts were seized. Thus the need to find investors.