New Class Action Lawsuit Filed Against Full Tilt Poker In California

The drama for the former number two online poker site in the industry, Full Tilt Poker, continues to mount as yet another lawsuit against the site has been filed in the courts of California.

A story in the Los Angeles Times this morning details out the latest legal case to befall the embattled online poker site. Two familiar names in the history of Full Tilt Poker, Lary Kennedy and Greg Omotoy, have filed the suit against many of the same entities that comprise the Full Tilt Poker operation. While the usual suspects – alleged owner Ray Bitar and poker professionals Howard Lederer and Chris Ferguson – are part of the list of defendants, other members of “Team Full Tilt” such as Gus Hansen and Phil Ivey are also included, as they allegedly “helped promote the website and attract players,” according to the complaint.

What is different with this suit versus some of the other complaints that have been filed is the compensation request. In previous lawsuits, the top figure has been between $15 million and $150 million. In this California complaint, the plaintiffs are looking to claim up to $900 million because Full Tilt Poker allegedly “misappropriated funds from player accounts and fed it to the defendants,” according to the complaint. There is also an accusation that Full Tilt Poker illegally deducted a rake, although it is unknown how that would work into their complaint.

Finally, the complaint alleges that Full Tilt “did not create financial reserves for amounts held on behalf of players, but instead distributed the money for operational expenses, marketing expenses, fees and losses arising from money laundering … and massive distributions to the individual defendants.”

These are accusations that have arisen in many of the other lawsuits that are currently stacking up the docket in North America. The biggest was the spark of what has become known as “Black Friday,” where the District Attorney for the Southern District of New York, Preet Bharara, introduced the original civil action that took the major players from the American online poker scene – PokerStars, the CEREUS Network’s Absolute Poker and UB, and Full Tilt – out of the U. S. internet scene. Since then, at least three other lawsuits have been filed.

In July, a class action lawsuit was filed against Full Tilt Poker by poker players Steve Segal, Nick Hammer, Robin Hougdahl, and Todd Terry, alleging that the online site violated the RICO statutes usually used against organized crime figures. The suit lists another 100 “John Does” that are a part of the case, which is seeking $150 million in restitution to American players.

In September, a Canadian consumer advocacy group filed a class action suit in Canadian courts against Full Tilt Poker. Consumer Law Group, Inc., and its attorney, Jeff Orenstein, made many of the same accusations against Full Tilt Poker that have been made in the New York and California suits in filing their case for Canadian players. In the Canadian suit, up to $15 million in restitutions are requested.

This month the software company Cardroom International filed suit against not only Full Tilt Poker but also PokerStars, in both New York and Californian courts. In that suit, Cardroom International alleges that the two online sites pushed them out of providing poker room software to several major television network’s through backroom deals that PokerStars and Full Tilt made with the networks that were running programming either paid for by the sites or advertised heavily upon. There are also violations of the RICO Act alleged by Cardroom International, who is seeking restitution up to $30 million from the courts.

Kennedy and Omotoy should be familiar names to those who have followed previous lawsuits against Full Tilt Poker. In 2009, the duo filed a lawsuit against Full Tilt Poker after nearly $80,000 was seized by the site, who claimed that Kennedy and Omotoy were employing “bots” on the site and were multi-accounting, both violations of the Terms of Service of the site. The lawsuit was dismissed by the U. S. District Court in Los Angeles in April 2010 because Judge Margaret Morrow stated that Kennedy and Omotoy could not substantiate their RICO claims – which require a strict time, date, place and manner of each alleged violation – against Full Tilt Poker. Although the door was left open to refile the case, it was not pursued.

What effect this latest lawsuit will have in the continuing song and dance between Full Tilt Poker and its supposed savior, Groupe Bernard Tapie, is unknown at this time. As the plaintiffs line up against Full Tilt Poker in North America, it does make it potentially more difficult for the French investment firm to realistically take over the company and bring it back to prosperity…or at least pay its players.