Microgaming Cancels 5050Poker Contract

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On Monday, the Microgaming Poker Network announced that it has ended its contract with 5050Poker.com. Citing breach of contract by 5050Poker as the reason, Microgaming will no longer allow the site to be a member of its group of over 20 poker rooms.

Microgaming’s problems with 5050Poker were made public on June 15th, when the network released the following statement:

“The Microgaming Poker Network regrets that it has suspended all game play with immediate effect on the poker room of 5050Poker Ltd, for a material breach of its contract. The directors of 5050Poker Ltd have been aware of the breach since 14 June 2012. Game play will be reinstated once the breach is satisfactorily rectified.”

Apparently, 5050Poker never righted its wrong and Microgaming made the decision to jettison the poker room from the network.

“Further to the press statement of Friday 15 June 2012 on the suspension of game play for 5050Poker Ltd, the Microgaming Poker Network regrets to announce that it has terminated its contract with 5050Poker Ltd, with immediate effect,” Monday’s press release read.

“The decision was taken after giving 5050Poker Ltd over a week to redress a material breach of their contract, being the non-payment of monies owed to cure their overdrawn network clearing account. Although 5050Poker Limited was given the opportunity to rectify the breach so that the suspension could be lifted, they have failed to respond. As such the Microgaming Poker Network had no choice but to terminate the contract.”

5050Poker’s side of the story is a bit different. At about the same time Microgaming announced its intentions to implement its new “True Value” system for allocating player rake to its poker room members, 5050Poker issued a press release complaining that Microgaming “with very short notice and in violation of former pretenses to the subsidiary unilaterally changed its network rules.” Apparently, the network restricted 5050Poker’s customers to playing just two tables simultaneously, whereas players across of the poker rooms on the network are allowed to play up to ten.

5050Poker believes that this restriction was put into place because it has a higher percentage of winning players than other operators on the network. In the “True Value” system, which is to be put into place July 1st, operators will be rewarded for having losing players. The poker room believes “the measure is yet another example of several discriminatory measures taken by Microgaming in order to get rid of unwanted gaming operators (whose players mostly belong to the category winning players).”

On June 18th, 5050Poker issued another press release to announce that it was leaving the Microgaming Network. It cited the table caps as one reason for the decision, as well as “unreasonable demands for guarantees (stemming from the June 15th suspension) that directly made it impossible for 5050poker to remain in the network.”

On June 20th, five days before Microgaming announced it was terminating 5050Poker’s contract, 5050Poker said that Microgaming’s actions had hurt the poker room so badly that “the company’s assets and liabilities are likely to be in such an imbalance that the Board has decided to delay further payments and to establish a balance sheet for liquidation purposes.”

5050Poker is also considering turning the tables on Microgaming and demanding payment from the network to make up for damage caused to the poker room.

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